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newsletternewsletter 317
Credit Cards. No Signature Required. Credit Cards. No Signature Required. Walgreens and various other retail stores and restaurants no longer require signatures on many face to face in-store credit card purchases. Depending on the type of industry, MasterCard and Visa allow merchants to process credit cards without a signature for purchases under a specified amount. For example, convenience stores can process purchases under $25 without a signature. Parking garages and service stations have a $50 limit. The limit is $35 for drug stores. Before you stop getting signatures, you should check out all the facts with your credit card company. The big advantage to Walgreens and especially gas stations is speed of the transactions. Getting a credit card approved takes a couple of seconds. Getting a credit card signed could take a minute or two depending on the availability of a pen, the speed of the signer, and the speed of your handwriting analyst who confirms the validity of the signature. Merchants who don’t require credit card signatures either purchase an insurance policy for fraudulent transactions or self-insure such transactions. I was unable to find any good data on the cost of insurance, but I would suspect that self-insuring may be more cost effective. Consumers are protected from transactions on a lost or stolen credit card as long as the credit card is reported missing when known to the consumer and within a reasonable period of time. I hate to give advice because I am not walking in your shoes. I do speak to hundreds of business owners and I believe that I would check with my credit card company and then eliminate signature requirements on at least all sales under $25. My guess is that after a couple of months, you will see the benefit of signatureless credit card transactions. I do not believe that the lack of a signature will cost your business any money. I do not believe that a signature on these smaller transactions helps reduce fraud or will have any effect on the number of chargebacks you receive. Look at it this way; stores like Walgreens, Starbucks and McDonald’s have reduced transaction time by about 1 minute per customer. Read more about the topic at: http://www.bankrate.com/brm/news/cc/20060828a1can.asp Cash Register Express and Restaurant Pro Express have an option to print a single receipt with or without a credit card signature line. McDonald’s McCafe
But, McDonald’s offers so much for all types of retailers and restaurants to learn from. I should also add that I don’t drink coffee, but McDonald’s new changes and advertising campaign are impressive. McDonald’s is going right after Starbuck’s success and adding McCafes to their stores. According to their new advertising campaign, “All the taste and quality of a coffee house with the convenience and price of McDonald’s. We harness only the finest, fully-ripened beans in Central America and South America, as well as the mountainous regions of Indonesia.” McDonald’s will be using state-of-the-art espresso machines to freshly grind your coffee in-store. According to McDonald’s, prices will be 85 cents less per coffee than the equivalent Starbucks coffee. Here is what I like about the McDonald’s campaign. They are going after the thrifty crowd by offering an expensive cup of coffee. At the same time, they are going after those people who are willing to spend more money on a cup of coffee by offering a high quality drink for less money. In a previous newsletter, we discussed McDonald’s inexpensive value meal plus the addition of a more expensive Black Angus Burger. The lesson to be learned is that McDonald’s is hitting the market from both sides. It is offering a less expensive, high quality product as well as a more expensive, even higher quality alternative. Own a clothing store, you can offer a $15 high quality dress shirt on one shelf and offer a top quality name brand cost effective shirt on a nearby shelf. ...and if you are really into marketing, you can have a separate website focused on some of your new products. McDonald’s now has Mymccafe.com. See it at: Read more about their marketing campaign at: Another Tale of Two Stores I never get it and keep repeating this and similar stories in our newsletter. This week, I needed to purchase some vitamins at Walgreens. Ooops. There were 5 people on line. I don’t have any line waiting patience. I would drive 20 miles to avoid a 15 minute traffic jam and prefer to go without vitamins instead of waiting on line. As soon as I got on line, the checkout person called the manager and another checkout counter was opened in less than 60 seconds. I don’t think it was because of me. This particular Walgreens manager believes in short lines and good customer service. The line of 5 people was split in half with the people in front given first choice to use the alternate cash register. Since credit card signatures were not required, the line went even faster. Good job Walgreens. This week, I made a purchase in a gas station convenience store. Oh what an unfriendly clerk. I purchased about $12 worth of stuff. It would have cost about $10 in a supermarket, but I wanted the convenience of the convenience store (no lines). The clerk sneered at me. How dare you make a purchase. He rang up the sale without saying a word and waited for me to take out my money. He didn’t even bother to tell me how much it cost since the total was already on the pole display. I paid for my purchase and then had to request a bag. He gave me a plastic bag (but didn’t pack it for me). If you own this convenience store, fire this guy. Every employee in every type of business needs to greet a customer, say hello and say thank you. As the boss, it’s your job to make sure that all of your employees get with the system.
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I
am well aware that I have been mentioning McDonald’s too many times
within this newsletter. I rarely eat at McDonald’s. When I am
looking for fast food, I go to The Dog House (a local hamburger and
hotdog place) or Patricia’s Pizza (another local non-franchised fast
food establishment).
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