RETAILERS MUST SURVIVE CYBER SHOPPING TRENDS

By Art Lieberman

Now that 2016’s Black Friday, Small Business Saturday, and Cyber Monday have past, there is irrefutable proof that retail businesses, regardless of size, need to realize the need for an effective website to market their goods.

Since businesses started to promote themselves via computer websites, there has been a huge boost in Internet marketing. Perhaps it started with Amazon and eBay, but holiday shoppers have clearly demonstrated that they are moving toward doing the lion’s share of purchasing what they want on the Internet.

The statistics from this past holiday weekend are in, and they are impressive. On Thanksgiving Day, consumers spent $19.3 billion, an increase of nearly 12 percent from the previous year’s start of the shopping weekend. Although shoppers used their mobile devices more than desktop computers to locate the items they wanted, by a 57 percent to 43 percent margin, when it came to the actual purchase, more than 60 percent relied on their desktop computers to actually buy the items.

On Black Friday, consumers went digital to shop, spending more than $3.4 billion on the Internet. That also represents a huge increase over the 2015 totals, and $1.2 billion of that was on mobile phones. Once again, sales on buyers’ desktop computers did exceed sales on mobile devices.

Cyber Monday topped the figures from the previous weekend for Internet shopping, but not by much – adding up to $3.45 billion in sales. All in all, Internet shopping accounted for $12.8 billion in sales for the entire weekend, an increase of 15 percent over the 2015 totals.

My reason to cite these statistics is to speak to retailers who are currently using their Internet sites merely to describe their stores. They are missing out on what could be a huge source of new income.

To further demonstrate this, reliable statistics from national sales groups inform us that in 2015, total U.S. Internet sales reached $347 trillion dollars. So far this year, including much of this past weekend, but not including the rest of 2016, Internet sales are already approaching the $400 trillion mark, an increase of more than 20 percent.

The reasons shoppers who were surveyed gave as factors for buying online are: less taxes, 30 percent; gas, 40 percent; lower prices, 55 percent; no crowds, 58 percent; greater variety of items and more information about items, 67 percent; and, not surprisingly, less time spent, 73 percent.

Most people went online rather than making phone calls to order goods or services, and major concerns for shoppers were making sure that the items arrived before the holidays, and that shipping was free.

Another important fact is that 90 percent of people who own an Internet-enabled device, such as a cell phone, a computer, or a tablet have purchased goods or services online, and they also now include older citizens, who have always been slow to become part of the technological generation. Cell phones are greatly responsible for that change.

So what is a retailer to do? The answer seems obvious. If they do not already have a website for their store or business, they should have one built, and, if they do have one, they should make sure that it is used for direct marketing rather than being merely an informational source.

What is required to make that happen is to turn the website into a direct sales tool by actually placing items for sale on the site, along with prices for the items. It will be necessary for the retailer to have control of the website so that prices and sale items may be changed as rapidly as necessary. The site will also need a “shopping cart” into which consumers can place their goods, and a checkout page where buyers can fill in delivery information and specific consumer details. On this page the terms and conditions of the sale must be listed and a payment arrangement, usually by credit card, should be present. Almost any webmaster who has worked with retail sites will be able to create such a page.

Finally, realize that creating such a sales website will not come without some expense. It is almost as if retailers would be opening another store – another source for marketing their goods. The better and clearer the site, the better the view of each of the items for sale and the description of them, the more likely it will be that the website succeeds. I would suggest that retailers seek local website designers. Your local Chamber of Commerce might be a good source for that. Remember that, in a sense, the website engineer is becoming a guide to your customers’ shopping experiences.

(Art Lieberman is President of MCPS of Central Pennsylvania, a credit card provider for businesses in the Central Susquehanna Valley. Art also owns MCPS for Campgrounds, the RV campground industry’s largest credit card company. He has been in the industry for more than 18 years and conducts free webinars online and seminars on credit cards for local retailers. He can be contacted at 877-858-9010 or at mcpsofcentralpa@yahoo.com.)

CELL PHONE PROCESSING - HOW'S YOUR DONGLE?

By Art Lieberman

In the past few years a new method of processing credit card transactions has burst upon the scene. Because it was first with the technology, a company called “The Square” seems to have cornered the market on transactions performed through cell phones. The Square is actually a “dongle,” which the dictionary defines as “a small hardware device that, when plugged into a computer or other device, enables a specific copy-protected program to run.”

Users insert the device into the earphone jack of an Android or iPhone cell phone, then download an app into the phone, and it’s ready to go. Processing credit cards this way has several advantages. First, you now can process credit cards where there is no telephone line, Internet connection, or even electricity. That’s a huge advantage to people conducting outdoor sales, or at a flea market where no facilities are present. It is also ideal for small businesses that don’t want to buy a terminal and want a simple solution for processing low-volume or seasonal transactions.

Almost more importantly, it allows SWIPE transactions rather than key entries, and since swiping a card results in less expensive rates, this is also – supposedly – a less-expensive method of accepting credit cards. Purchasers can actually sign your cell phone to complete the transaction.

The Square offers a flat rate of 2.75 percent on transactions – without any other charges – which seems to be a huge advantage over other methods of processing that carry with them additional fees such as transaction fees, statement or maintenance fees, and PCI compliance fees. So the Square seems a simple solution to so many processing problems: no equipment to buy, no contract term, no additional fees, and, so long as you have a good cell phone signal, no problems with person-to-person transactions. It might even be a good solution indoors where there IS electricity and a phone. Plus, you don’t need a sales representative or a credit card processor to help you get started.

Wow, I guess that takes care of my business! Time to retire . . . but WAIT. . . .

There are several MAJOR problems. If you conduct your business as swipe transactions, 2.75 percent as a rate is really horrible. There are debit card transactions that can process at less than half that rate and most credit card swipe transactions are lower than 2.75 percent. Most are under 2 percent. If you process more than $4,000 a month, the Square is actually more expensive – and very few campgrounds do less than that.

As an example if you process $4,000 using the Square, at 2.75 percent it will cost you $110. Doing those same swipe transactions for debit and credit cards, at an average of 1.75 percent and adding on a 10-cent transaction fee and, in our case, $18.95 a month for PCI compliance and maintenance fees and a website to do your PCI Compliance on (with a $100,000 indemnification in the event of a data breach), and even adding on $2 in transaction fees (for 20 transactions), it would have cost you $90.95. At only $4,000 in processing you would have saved $20; PLUS you’d be PCI Compliant with indemnification. For each $4,000 more in transactions the savings would increase by nearly $40, since the $18.95 would be already included.

Secondly, the Square claims to be PCI-compliant – and we have no information to the contrary – but YOU probably aren’t compliant, using the Square. PCI regulations require EVERY merchant who processes credit cards to complete a PCI Questionnaire and Attestation of Compliance once a year. Somehow, you’d have to do that on your own.

In truth, however, most campgrounds rely somewhat on NON-SWIPE transactions like reservations taken from their website, over the phone, or through a reservation company. This is not what the Square was designed for. With the Square there is no paper trail that would be necessary to insure security.

Oh, and by the way, the rest of us also have dongles that act like the Square and we charge rates that, as you can see, tend to be less expensive for businesses like campgrounds.

I guess it’s not time for me to retire. I’ll just keep working.

Art Lieberman is President of MCPS for Campground. He has been in the industry for more than 18 years and has been conducting free webinars online and seminars on credit cards for many State and Regional Association Conventions. He can be contacted at 877-858-9010 or at rvcreditcards@yahoo.com.)

TRUMP'S A COMPUTER DUMMY

By Art Lieberman

It has become obvious to most of us with half a brain that Donald Trump does NOT know anything about a computer. Like parenting and caring about anyone’s circumstances other than his own, the nature of a computer is a detail he doesn’t want to get involved with. I’m sure he leaves it to a lackey.

Why, you ask, is it obvious that he isn’t computer literate? There are two reasons. One reason has been prevalent during his entire campaign. Trump cares nothing about facts, There is an infinite amount of factual information available on computers. I understand that in Trumpland, one man’s facts are another’s opinions, which you don’t have to believe. Even if there is empirical evidence that something is real, you can still contest it – like climate change. But there is video of Trump actually saying something LIVE, that no thinking person can ignore. Many times during these past agonizing months of listening to Trump’s lies, he has denied that he has said something that was video-recorded; or he claims Hillary said something that she did not – and both can be verified by looking at a computer.

And now, Trump has claimed something about computers that is so wrong it further demonstrates his ignorance. Sunday, FBI Director James Comey told lawmakers that the agency, after a review of new emails, hasn't changed its opinion that Hillary Clinton shouldn’t face criminal charges. Comey explained that the FBI had reviewed 600,000 e-mails from the computer of Anthony Weiner, the estranged husband of Hillary aide Huma Abedin. So computer expert Trump told people at a rally, "You can't review 650,000 new emails in eight days. You can't do it, folks."

Well of course you CAN, and anyone with an e-mail account knows you can. Every e-mail account has a search mode. Here’s how you do it, Donald. You start by searching the e-mails for ones from Hillary. Finding those (let’s suppose there are 33,000 – Trump’s favorite number), you then search those e-mails that have a security rating from Confidential to Top Secret. Let’s assume there are 50, so you see which ones are not already in the hands of the FBI, because those have already exonerated Hillary from any charges.

So how many – if any – are left? And what do they reveal? Apparently, according to Director Comey, nothing that will make him change his initial opinion back in August that Hillary had not violated any laws. Too bad. Trump had only last week, praised Comey for continuing to find new “evidence” to convict “crooked Hillary.” But don’t worry, Trump will deny saying it even though YOU and I can hear him say it on our computers.

However, there is something that is not kosher in this whole affair. Why did Comey make the announcement of the discovery of those e-mails in the first place and make them sound so ominous? Perhaps even more interesting is that it appears that the information was leaked by members of the FBI to the Trump campaign even before Comey’s announcement. Former New York Mayor Rudolph Giuliani had made the announcement prior to Comey’s on Sean Hannity’s show on FOX-TV, and the smirk on his face was nauseating.

But think about it: After November 8 there is a distinct possibility that Trump’s face will disappear into the sunset and put an end to the careers of many of the supporters of this angry miserable old man, until his own trials begin for his Trump University and perhaps for the many instances of his sexual misconduct.

CREDIT CARD COMPANIES BOMBARDED AGAIN WITH LAWSUITS

By Art Lieberman We have been reporting to our industry that credit card companies have been embattled for several years in class-action suits claiming that the companies have conspired to set prices on credit card rates in violation of antitrust laws. The suit, we noted recently, although thought to be settled, was overturned by the U.S. Court of Appeals and is, once again, still pending. But now, retailers are after the card companies for that horrendous roll-out of the chip card and the required EMV terminals that retailers need to process chip cards. The suits center on the “arbitrary” October 1, 2015, deadline that the companies set to complete the conversion to chip card technology. A suit, initially brought in Federal District Court by two small Florida businesses – B & R Supermarket and Grove Liquors – in March, has now been joined by Los Angeles gourmet food chain Monsieur Marcel and Fine Fare, a New York City food chain. U.S. District Court Judge William Alsup of the Northern District Court of Southern California has allowed the case to move forward against Visa, MasterCard, Discover Financial Services, and American Express. The suit alleges that there was a conspiracy by the card companies to create an artificial deadline to shift responsibility for fraudulent transactions to retailers who haven’t upgraded from the old magnetic strip reader to the newer chip card reader. Lawyers for the plaintiffs have said that a class action suit may well involve as many as 8 million retailers, mostly small businesses. The action seeks to recover costs of the upgrade to the new equipment and/or software which is estimated at $6 billion. But others estimate damages could be as much as $40 billion. The judge’s decision to proceed with the action against the credit card companies relies on the fact that the rollout of the chip card deviates from the rollout in Europe. The judge concluded that . . . “the deviation from prior rollouts points the finger at plausible suspicion and tends to show the lock-step rollout in the U.S. flowed from a conspiracy . . . .” Judge Alsup continued by explaining that in Europe the networks “offered certain accommodations to other countries by reducing interchange fees, implementing gradual rollouts, and providing additional time to install terminals.” Visa CEO Charlie Sharf told analysts that Visa had actually informed retailers, banks, and other credit card companies of the conversion in 2014. But the judge said that just because merchants were present on that occasion didn’t actually render the idea of a conspiracy implausible. Judge Alsup pointed out that “run-of-the-mill merchants like the plaintiffs did not take part in those discussions.” After the lawsuit was filed the credit card companies tried to make the transactions faster and have forgiven chargebacks of less than $25 as a result of the lack of pin non-compliance. Meanwhile, ironically, Walmart and Home Depot have brought a separate action against the credit card companies related to the contention that the new chip card transactions rely on “chip and signature’” rather than the more secure “chip and pin” for which they were designed. And the beat goes on… MCPS is a credit card processor sponsored by Woodforest Bank NA. Company President Art Lieberman has been in the industry for over 18 years and has been conducting free webinars online and seminars on credit cards in many State and Regional Association Conventions. He can be contacted at 877-858-9010 or at rvcreditcards@yahoo.com.)

NEW DEBIT CARD REWARDS PROGRAM HURTS MERCHANTS

By Art Lieberman For those readers of my many articles on the costs of processing credit cards, you are already aware of the penalties put on merchants by banks for accepting rewards cards. Banks that issue credit cards to consumers have been offering rewards on credit cards for years. It might have started with American Express, which offered its premiere cards with rewards for many years. Of course there were certain qualifications for a consumer to get these reward cards. First, their credit had to be outstanding and, perhaps even more important, they could not carry a balance. All transaction made during a month had to be paid for, in full, after they received their monthly invoice. In effect, as a cardholder you were getting 30 days’ worth of credit. But on the other end of that transaction, the merchant paid for those rewards because the rates for American Express Cards were almost double the rates of a Visa or MasterCard. Discover cards also offered rewards, but their cardholders could pay out the credit with interest over months. Their rates also were higher to merchants, but since Discover was making interest from cardholders, their rates weren’t that high. Like American Express, Discover also billed merchants separately for accepting their cards. Then, several years ago, it all started to change. American Express offered a BLUE Card, which didn’t require a very high credit standing from their cardholders and they could pay off the credit charges over several months. Discover changed from Novus to its present form and they became part of the standard package of credit cards offered by processors. They also reduced their rates to merchants and they are now compatible with Visa and MasterCard in Interchange rates. American Express also reduced their rates a few years ago and now, although just a little higher, their “Opt Blue” rates are very similar to the other card rates. Now let’s be clear. We have been discussing CREDIT CARDS. Debit cards have been a different matter since their inception. Unquestionably, when a merchant accepts a debit card WITH A PIN-PAD, the rates on the Interchange are the lowest rates available from the card companies. On the Interchange chart, the lists of different debit card transaction fees are very inexpensive. Of course, by the time the actual rate reaches the merchant, those rates have been increased by the banks and sales reps. But, nevertheless, pin debit transactions don’t make processing banks much money – and merchants can just accept a debit card like a credit card and pay higher rates. No pin-pad required. But now, perhaps because banks are starting to realize that the new chip cards transactions are eventually intended to be chip and pin, not chip and signature, they are offering debit card holders REWARDS if they do not use their pin number on a debit card transaction, but rather do a chip and signature transaction instead. That way, they can charge the merchant more – THAT’S YOU! Issuing banks have started to send out notices to debit card holder, which is basically almost all people who have a checking account, that they will receive rewards if they “…sign the receipt. Purchases made using your PIN number do NOT qualify” The notice goes on to say, “Make just 3 signature-based purchases totaling $500 or more on or before December 31, 2016 to earn your award” The rewards are monetary and listed in the notice. This is just wonderful for the banks, who can now charge the higher Interchange rates on the transactions, fabulous for the consumer who can earn cash rewards and terrible, of course for you, since YOU pay the reward. But there is one other implication that should bother you as it bothers me. Signature based transactions are LESS SECURE than PIN debit transactions. It is part of the reason for this entire chip – EMV terminal debacle which continues to baffle us all. Security was the name of this game. Greed is the name of the Debit Rewards program! MCPS is a credit card processor sponsored by Woodforest Bank NA. Company President, Art Lieberman has been in the industry for over 18 years and has been conducting free webinars online and seminars on credit cards in many State and Regional Association Conventions. He can be contacted at 877-858-9010 or at rvcreditcards@yahoo.com.)

IS THERE STILL CONFUSION ABOUT RATES?

Since 2007 we have been involved in the campground industry marketing credit card services. Dozens of articles have tracked the changing rate structure currently offered to merchants of all kinds and we have seen the changes from “tiered rates” to “interchange plus” rates and, still, it is apparent that there are campground owners who have NO IDEA of what rates they are paying.

Today, one of our new associates was told by a prospective customer that they were paying 1.69% on credit cards. That is either impossible, a miracle or someone who understands nothing about what they are actually being charged by their processor.

So let’s look at all there possibilities. If this prospective customer (a nice lady) meant that her overall rate was 1.69%, that is impossible. The credit card companies, by which I mean Visa, MasterCard, Discover and American Express charge processing banks rate that are higher than that. Those banks, generally raise the rates before handing them off to an Independent Sales Organization (an ISO in Bankese) and they raise the rates before giving them to an agent who sells them to a merchants, after increasing those rates once more.

Remember now, we are talking about interchange rates. Those are the rates set on INDIVIDUAL CARD TYPES by the card companies. For instance, there are as many as NINE different debit cards, several different credit cards, many different REWARDS CARDS, lots of corporate cards, gasoline cards, branded cards like airlines or department stores, ad nauseum. Each card type has its own rate. There are debit cards as inexpensive as .61% and commercial cards which can cost 2.79% and those rates are before the several increases mentioned in the previous paragraph. Most credit card transactions range in the mid-1.xx% range – unless they are NOT SWIPED. Non-swiped transactions such as those done over the phone, or by computer such as reservations or purchases performed in that manner have an extra cost – as much as 1% more.

To these rates, the ISO adds other fees such as transaction fees, service fees, batch fees, PCI compliance fees, annual fees, and a host of other fees which may or may not be added to the monthly billing.

So if that lady thought her OVERALL rate was 1.69% she was just plain wrong. What she might have believed was that she was still on TIERED RATES. 1.69% was a decent rate for a swiped credit card that wasn’t a corporate card. Of course if it were a debit card, processed with a pin-pad her rate might have been cheaper – or if it were a rewards card or commercial card it would have been quite a bit more expensive. That still doesn’t account for those add-on fees we mentioned above. No, 1.69% is just about impossible.

You can figure your rates several ways. First do the simple math. If you did $10,000 this month in credit cards and paid $300, your overall rate is 3%. That rate is a bit high even if you have a mixture of swiped and non-swiped transactions. However if you ONLY swipe transactions that rate is very high, and if you use a pin-pad for debit card, that rate is exceptionally high.

As a processor, interested in saving our customers money we find if we are allowed to review the current credit card processor’s statement from a campground, we can determine HOW to save the customer money.

Then it’s all up to WHAT is charged for the PLUS in Interchange Plus. Therein is the secret of the success of any credit card processor worth its salt!

LOYALTY VS. THE STATUS QUO

As a company that markets a service our most important objective is to keep a customer happy AFTER the sale. The word all sales companies use is RETENTION, Our particular service has an expiration date, usually referred to as the “term of the agreement”. Our Agreement actually expires within a few years and the customer has the option of renewing the term of the agreement or moving on to another processor.

We are particularly proud of our retention rate. This rate is produced by two of the most important factors that all companies strive for: The cost of our service MUST be exceptionally competitive and our customer service MUST be impeccable. This is accomplished simply by treating each business as an individually owned business.

If you can accomplish this, you can develop a LOYAL customer. Simple, isn’t it?

Then why do so many marketing businesses fail? Or, for that matter, looking at our current political situation, why is there such angst among voters? The answer is simple. Voters are extremely interested in various aspects of life that affect them and do not impact on the lives of other people. They are all diverse individuals. Some people are devoted to one party or the other while others do not care to hold with one group. Some want change, while others are fearful of change and want to remain with the status quo.

There IS a certain comfort with the status quo. There is a feeling of comfort when you get accustomed to by doing things one way or by working with only one company (or one party).

But sometimes that company fails you. They have changed the rates or their customer service (or their candidate). Now you start looking to change, to go elsewhere to shop or to use another service (or to elect someone new and different). But in doing so, you have to rely on their promises that they will be cheaper, or better or their service will be smoother.

Voters are now making choices that we, in marketing, face every day. Sometimes we speak to a campground owner and he or she is ready for a change. Their rates have risen, their service has declined or their processor is nonresponsive. This owner is just the kind of person we are seeking. We KNOW we can help him or her.

Then there is the campground owner who seems to be satisfied with his or her processor.  He feels his rates are OK, his service fine and hasn’t had to call anyone involved in credit cards for some time. This person is our challenge. This is what makes our business fun. We have to convince this person, satisfied with the status quo, that we offer something better. Usually it comes down to savings, but there are other factors such as communication.

The true marketing person enters this conversation (if there is one) feeling like a bullfighter with mustard on his sword. He is full of confidence about how he can help this prospective customer. His experience with the industry, his knowledge of his customers and the pride in his company are his “weapons of mass construction”. He wants to help - to save the customers money, to offer superior service, to establish the long-lasting relationship.

He has rules. He won’t lie. He will treat each business as an individual business although they are members of an industry and most importantly, he will not lose focus on the BIG goal, to establish a lasting relationship – one that inspires a new mutual loyalty.

Let the business begin!

 (Art Lieberman is President of MCPS for Campgrounds, MCPS is a credit card processor sponsored by Woodforest Bank NA.  Art has been in the industry for over 18 years and has been conducting free webinars online and seminars on credit cards in many State and Regional Association Conventions.  He can be contacted at 877-858-9010 or at rvcreditcards@yahoo.com.)

ACCEPTING CREDIT CARDS REALLY MAKES SENSE

The benefits of accepting credit and debit cards far outweigh the cost. Various studies show that when people are given more payment options (beyond cash) they are more likely to make impulse purchases, join loyalty programs, and spend more per purchase – and that can only help your business to grow.

Credit and debit cards are almost as common as cash. Nearly everyone in the USA has at least one in their wallet, including business owners. But data show that 55 percent of the nation's 27 million small businesses don’t accept credit cards.

Sixty-six percent of all point-of-sales (POS) transactions are done with plastic – credit, debit, or gift cards. That is a lot of sales for millions of businesses to miss out on. Only 27 percent of purchases are made with cash. In fact, it’s estimated that cash sales will drop to only 23 percent by 2017.

Technology is making it easier for any business to accept and manage credit card transactions. Gone are the days of complicated machinery via dedicated dial-up lines. PayPal, Square, Intuit's GoPayment, WePay, and a host of others are making it simple and relatively affordable to accept cards.

So why do many merchants refuse to accept cards? The common reason is the fees. The argument I hear from most merchants is that it is too expensive to accept credit cards. But with $127 billion being added to the economy between 2008 and 2012 through the use of plastic cards, merchants everywhere are starting to pay attention to accepting credit cards.

In a survey conducted by WePay, which offers an online payment mechanism to accept credit cards (not dramatically different from PayPal), it found that 58 percent of small businesses are regularly asked by their customers to accept credit cards. So that tells me that many are still missing out on potential revenue by not accepting credit cards. Sure, there are fees, but you can account for them in your pricing. Customers seem to understand that the cost of processing plastic is greater than cash and most seem willing to accept that cost from smaller merchants.

Moreover, our company – handling more that $75 million in credit card transactions every year – actually minimizes those costs by giving our customers the absolutely lowest credit card rates. You can check that out by calling us at (570) 966-0080.