Sponsored by Sage

By Rieva Lesonsky

Is your small business ready for the holiday shopping season? You’ve got your inventory ordered, your sales strategy in place and your promotions planned. Don’t forget to think about how you will handle payments. Here are five steps every small retailer must take before the holiday race begins.

  1. Install an EMV card POS system. If you haven’t already prepared for the EMV (Europay, MasterCard and Visa) conversion (the deadline was actually October 1, 2015), don’t delay any further. EMV credit and debit cards use a chip instead of a magnetic strip to encode customers’ payment information. The technology protects consumers by lessening the risk of fraud. However, if your business doesn’t upgrade to EMV technology and payment card fraud occurs at your business, you will be liable for the fraud. That’s a significant risk — one you don’t want to take. Your current POS system may already be compatible with EMV technology; if not, contact a payment processing provider to learn more.
  2. Offer gift cards and/or or loyalty cards. Last year, gift cards were the most-requested gift item, according to the National Retail Federation. There’s still time to institute a gift card program for your retail business. Gift cards not only drive sales, studies show the majority of gift card recipients spend more than the amount on the card when they visit your business. The holidays are also a great time to institute a loyalty/rewards program. Encourage new customers to sign up for your loyalty program, then offer incentives and rewards that bring them back to shop with you again and again. For your already-loyal customers, offering a higher level of rewards will help boost their spending as well.
  3. Go mobile. Help cut down on wait times at your retail store by offering a mobile payment option. Equip your sales associates with smart phones or tablets they can use to take payments from customers anywhere in the store. You can set up a variety of payment stations, have sales clerks roam the store offering to ring customers up, or have sales clerks handle customers while they wait in line to speed things up. Setting up mobile payment processing is simple.
  4. Protect yourself during card-not-present sales. Online retail is expected to grow 9 percent in November and December 2015. “Growing online sales during the holiday season increases the risk of card-not-present-fraud activity, which research firm Javelin Strategy and Research predicts will double POS fraud by 2018,” says Paul Bridgewater, CEO of Sage Payment Solutions.

During ecommerce and phone orders, the customer’s card is not visible to you at the time of the transaction, which is why they are called card-not-present transactions. “Small businesses need to be alert to scenarios that could indicate fraudulent card-not-present transactions,” says Bridgewater.

According to Bridgewater, warning signs of possible card-not-present fraud include:

  • A customer placing an order that is larger than normal
  • An order that includes multiples of the same item
  • Items being shipped to an international address
  • Multiple transactions including similar account numbers
  • Transactions placed by one customer using multiple credit cards
  • Multiple transactions placed on one credit card during a short time period
  • Sales processed through the Deaf Relay System
  • Cardholder asks for Wires or funds through a money transfer service, such as Western Union
  • The amount of sale seems “too good to be true,” such as a customer purchasing thousands of dollars worth of items when your average transaction is typically under $100
  1. Train and prepare your sales associates. New technology takes time to learn. Start now to train your sales clerks in how to use the new technology, as well as how to be alert to the warning signs of possible card-not-present fraud. Customers themselves may need training in how to use EMV card POS systems, so make sure your employees are ready to show them the ropes.

By taking the steps above, you will enter the holiday retail season well prepared to maximize sales, minimize risk and enhance customer satisfaction and confidence in your business.