Five steps to take now to capture the most holiday sales
It’s Black Friday, and the crowds are lined up outside your store, just as you’d hoped. They’ve shrugged off the economic worries that dominate the news every day and just for a few days, are ready to spend.
But wait – eager shoppers are now getting frustrated because your checkout line is slow. Or the line has stopped completely because the terminal is out of paper. Or the temporary hire doesn’t know how to process a gift card transaction.
For retailers and restaurants, now’s the time to make sure your checkouts run smoothly and that your point-of-sale system doesn’t cost you sales, says Brian Goudie, senior vice president of revenue sharing alliances with First Data Corp., the Atlanta-based electronic commerce and payment processing solutions provider.
For many merchants, 40% of their annual business is generated between Thanksgiving and New Year’s Day, so planning ahead to make the most of the busy holiday shopping season is critical, according to Goudie.
First Data works with merchants who generate anywhere from $100,000 to $45 million a year in sales, and for most merchants, holiday-related trouble spots are similar, Goudie said.
“I think a lot of the things that Walmart worries about are the things that Johnny’s Pizza is worried about,” he said.
Sageworks, a financial information company, asked Goudie for tips on maximizing holiday sales, and here are First Data’s top five suggestions for things you should do now to maximize holiday sales:
Look at the big picture and inventory your situation. Goudie recommends taking a broad look at what you accept for payment to make sure you’re offering enough options for the current environment. Even if you don’t expand the kinds of cards you accept, do you have enough terminals or should you add another one in a new aisle or lane for processing payments? “You should probably look at your previous year’s deposits and receipts,” he added. That will help as you study the need for additional lanes, equipment or supplies, such as terminal paper.
Anticipate a bigger bill for payment processing. Avoid a big cash flow shock after the holidays by thinking ahead, and planning for a bigger bill in January. “Some people do as much as 40% to 50% of the year’s sales in one month,” Goudie said. If you’re charged 2% of your sales for payment processing, your bill might normally be $200 for a month with $10,000 in sales. Qudarupling your sales is great — but $40,000 in sales means you need to plan for an $800 tab for processing.
Train new hires now. Whether it’s a credit-card terminal, or a point-of-sale system, your seasonal hires need to be comfortable processing various forms of payment quickly. “That’s a big one,” said Goudie. If a worker doesn’t know how to ring up a sale using a gift card, it can really back up the checkout line.
Get gift-card savvy. In addition to training part-time workers on gift card transactions, you need to make sure now that you have plenty of preloaded cards and are taking advantage of social media such as Facebook to leverage gift cards’ marketing benefits. A promotion, for example, giving away 50 gift cards preloaded with $10 each doesn’t cost the merchant anything until the gift cards are redeemed, yet many retailers find shoppers spend even more than the face value of a gift card when they use them. Another suggestion from Goudie to retailers: “They should think about using a gift card as a store credit as opposed to giving money back” for returns.
Protect your customers’ data. Merchants must secure cardholder data to meet payment-card industry rules, and many businesses undergo an annual audit to make sure they meet the standards, Goudie said. First Data also has terminals that can perform “tokenizing,” or creating stand-in values for credit card data, and some systems can kick out or flag certain transactions if, for example, the card has already been issued a refund. But Goudie said business owners can also institute policies, such as requiring manager approval for refunds over a certain amount. And managers should get in the habit of reviewing credit-refund records regularly to ensure multiple refunds aren’t being issued, he said. Do those things now, Goudie said. “If they wait until November 15, they won’t do it; they’re just too busy,” he said.