Obtaining merchant status, which allows you to accept credit-card payments, might seem like an unnecessary hassle--especially considering that most people can pay by cash or check. But by not accepting credit-card payments, you lose sales, says Larry Schwartz, president of the National Association of Credit Card Merchants in Boca Raton, Florida. This is especially true if yours is a mail order business.
"Up to 70 percent of people never mail the check," Schwartz says, so accepting credit cards is especially crucial for mail order companies. When the customer places an order, he's excited and eager to buy. Faced with the prospect of sending a check, waiting for it to clear and then awaiting shipment, his interest is likely to wane. In the meantime, you lose sales.
Reyne Hogan, owner of Reyne Hogan Antiques, a mail order antique shop run from her Cincinnati home, has accepted only 13 credit-card orders since obtaining merchant status six months ago. But she believes she made the right decision.
"The 13 people were thrilled that I could take credit cards so they could get their merchandise faster."
Because Hogan's business sells rare antique glass made by such well-known companies as Tiffany, Daum and Galle, she can sell a single antique for $30,000 or more. So, although 13 orders may not sound like much, they added up to a great deal of money for Hogan. Also, by taking credit cards, Hogan offers her customers an important convenience she hopes will keep them coming back.