Those of you who have read some of my past writing here already know that adding new technology, software or hardware, to my life is not my idea of fun. As the tech world changes, a little too rapidly for my taste, I am frequently forced into changes that I will kindly call “challenging.” For me to voluntarily make a change to my way of doing things, there must be a benefit that far outweighs the frustration I anticipate. This week I not only made such a change, but was astounded at how smoothly it went. I’m sure I’ve learned some things over the years that lessened the challenge, but I’m also sure that most of the credit goes to the people at the software company whose “user-friendly” product actually lived up to its billing.
The motivator, one of the best in the world, was money. Credit card processing is a necessary expense for a retail business, but one that seems to grow much faster than the associated revenue. Most consumers are aware that a percentage of the sale amount is paid to the processing company, and that the percentage is higher for some card types (e.g., Amex). Most of my customers understood why I didn’t take Amex cards; the percentage is more than double the standard rate. That variable is only the beginning. The standard rate charged is usually 1.5% to 1.8%. Not bad. But there are ever increasing rate levels on “rewards” cards, up to and exceeding the previously mentioned high-rate premium card. In chatting with customers I realize that most people think that they are getting airline miles, cashback, or points toward other goods and services through the generosity of the financial institution issuing the card. Few realize that the merchant is the ultimate reward giver. And cards without rewards, at the standard rate to the retailer, are becoming scarcer every day. Incidentally, the agreement binding retailers to their processing company forbids refusing cards; if you take Visa, you have to take every Visa. It’s impossible to know the “rate” anyway, until the statement comes. It is permissible to forgo an entire card brand, e.g., Amex. But more on that!
So – those of you who go out of your way to support small businesses (not just bookstores), might want to follow my lead. I keep a non-rewards Visa for shopping the “little guys.” Actually, I try to use cash, but when the purchase is large or I haven’t been to the ATM, I try to keep the hit to a minimum. When shopping at large national retailers, I use the rewards card. It’s not that I dislike them. I suspect that they have the market power to negotiate better rates for credit card processing, unlike those of us who have to live with what’s offered.
Ah, yes! What’s offered. Not a day goes by that I don’t receive a phone call from some company that “has a representative in the area” who would like to see my processing statement and guarantees to save me money. I have actually changed companies twice over the last ten years, though not as a result of these calls. The pattern is this: cheap rates, followed by increases. First an additional ten cents per transaction for “security” (yes, there is a transaction charge, varying from fifteen to twenty-five cents, in every system). Then an additional nine dollars a month for security “mandated by recent banking law changes.” And on and on. The last straw for me was one of those “opt-out” traps. My company would do me the honor of allowing me to take Amex cards without any further paperwork, for only $25 a month (in addition to the transaction fee and “discount” percentage). I could opt out by a certain date; otherwise, as soon as I processed an Amex card, the fee would be imposed monthly. Needless to say, I lost track of time and missed the opt-out date. A few months went by, and we were careful. Then one day I was dealing with several customers at once, and inadvertently took the wrong card. In the past, of course, it would I have been rejected, but under the new system, I was now an Amex processor. Even if I never accepted another Amex card, I had to pay $25 each month.
I have been using the Square Register system for credit cards on my iPad and then iPhone over the last two years, whenever I had occasion to be selling books away from my shop (signings at the local library, community events, etc.) Their newer device, the “Square Stand” is designed for small retailers. An iPad is inserted, and the Square App allows credit card processing and a host of other features. The fee is 2.75%, but that is the only fee. When I compared the cost of my current system, including the ever-increasing number of monthly fees, Square is a bargain. Still, I hesitated. A new piece of hardware; a dedicated iPad; new software; a new receipt printer for those stubborn ones who refuse e-mail or text receipts.. The initial investment seemed high until I remembered that I would need to purchase new credit card equipment later this year, at a cost of about $400, to handle the new “chip and pin” technology. I decided to accept the frustration that would ensue, run my systems parallel (not double charging, but keeping the old as backup for a “comfort” period), and earlier this week placed the fateful order. I thought “standard shipping” would give me until next week to face the monster.
Friday morning UPS delivered the printer. Friday afternoon, FedEx brought “The Stand.” During the midafternoon lull, I took a deep breath and began unpacking. My plan was to proceed to the usual point, where I wanted to throw one of the devices out the window, and then stop for a day or two until I could face it again. An hour and a half later, I was up and running. My only challenge was where to store the tiny screwdriver needed to secure the iPad to the Stand, in case I ever wanted to separate the two again.
Friday evening was busy because of a Flag Day concert on Main Street. The new system worked flawlessly. Granted, I was familiar with the App from my earlier usage, and all my accounts were set up; adding a device was simple. For me, though, this scenario was nothing short of miraculous. When Dani, my associate, arrived this morning, we began playing with other features and realized how this new toy is going to simplify our lives. I never really had a “point of sale” system; as the business has grown from a small “paperback book swap” to a full service shop, I added on procedures as needed. Excuse me if I’m gloating over something that is probably basic to others, but for the first time I feel like technology is serving me, not the reverse. I’m at this moment charging up a Bluetooth speaker. My attempts to play music in the shop have been less than successful, but now I have a dedicated iPad, and the courage to connect it to a speaker or two. And Monday morning – Farewell to the credit card extortionists.