Written by John Nicola, senior VP of merchant sales at First Data
Retailers of all sizes can benefit from new ways to control costs, especially in today's challenging economic times. Having a payments strategy that capitalizes on sales opportunities, reduces overall costs and builds customer loyalty is an important factor for success. Retail decision makers need to build an all-in-one payments strategy to help meet customers' demands and expectations regarding payment choice, convenience and security, while effectively managing costs, operational efficiencies and return on investment.
Here are some tips and tricks payments processor First Data offers to retailers looking to save some money, to retain customers and bring in new ones without taking away from the bottom line.
Upgrade POS Terminals And Systems
Updating POS systems can benefit large and small retailers in many ways. Incorporating the latest POS technology enables retailers to take advantage of all different payment types, newest feature functionality, security at the POS and expanded management functions and controls. With minimal up-front investment, new POS terminals can provide lower infrastructure costs, shorter customer wait times and more reliable/secure transaction processing. In addition, updated systems offer more reliable connections to avoid lost sales.
Don't Buck The Contactless Payments Trend
Retailers are always looking to improve the customer experience, whether it is through coupons and weekly sales, the latest clothes and products and shorter wait times. With an estimated $1.6 trillion expected from self-service transactions by 2013 (according to Lee Holman, IHL Analyst Group), retailers should consider embracing self-checkout options such as wireless or contactless terminals.
There are approximately 19 million contactless payment devices currently in circulation in the U.S. (Aite 2008), and that number is predicted to grow considerably in the near future. This payment method can be added through low-cost deployment or by retrofitting current POS terminals, offering a number of benefits for revenue generation and long-term cost reduction. Most terminals can support PIN-based debit, traditional card swipe and contactless payments while connecting directly to the current terminal.
Other benefits of contactless payments include reduced customer checkout time (up to 30-40 percent on average according to the SmartCard Alliance), increased daily transactions, improved revenue streams through innovative prepaid and loyalty programs and increased competitive differentiation.
Offer Paperless Payroll Options For Employees
As retailers look for ways to reduce expenses, the elimination of paper paychecks presents one such opportunity. While direct deposit is a longstanding solution, millions of American employees remain unbanked or underbanked, lacking the traditional banking relationship needed for typical electronic pay. Prepaid payroll solutions offer the best of both worlds for retail store owners and employees. Employers can save a significant amount of money – about 10 percent of printing and depositing paper paychecks according to First Data– as well as the headache of keeping track of unclaimed wages. Employees can rely on a safe, secure way to manage their money without a bank account. They can write checks and receive additional payroll funds instantly instead of waiting longer for the printed check.
Grow Profitability Through Loyalty
Retailers looking to offer customers convenience, build loyalty and make their business distinct require continuous adaptation to evolving customer demand. There are new solutions that offer customers the convenience of linking a new or existing loyalty membership card with their preferred bank account. This gives customers a better way to pay with real-time rewards tailored to each customer, which helps increase loyalty and membership participation. It also allows smaller retailers stores to create loyalty programs or complement current programs without a huge financial investment. The customer benefits as it lets them shop using one card while offering relevant and timely rewards to encourage repeat business.
Rather than rushing to cut costs on items throughout the store to save money, retailers may not need to look any further than their POS terminals and payment strategy. By finding ways to improve the way retailers accept payments, such as current POS terminals, new technologies, payroll options and loyalty programs, they can begin to see the opportunities available to their businesses. Customers will benefit from the cost savings too, giving them more reasons to come back for more.