Check, Please

Nearly one-third of retail purchases are paid for by check! Here's how to safely implement the pay-by-check option.

What do an inflatable rooftop dinosaur, a dancing mascot, and a truckload of monogrammed Frisbees have in common? Things you will find on eBay? Probably, but these are also some of the interesting props businesses use every day to attract new customers. Many of these ideas work, and just as many are quickly abandoned.

Putting your master's degree in small business creative advertising aside, like many other small business owners out there, you still depend on repeat customers. They are, after all, the ones who spend more money, refer more customers, generate larger transactions, and buy a broader range of products and services than one-time shoppers.

One particular way to keep your customers coming back is to have flexible payment options in place. You want to do everything you can to make your in-store experience not only rewarding, but also speedy and hassle free. With all the competition these days, it's all too easy for customers to quickly bounce from one business to the next. Hundreds and even thousands of dollars are spent just bringing customers in the door, and even more of your time, effort and money are spent getting them to actually buy things. If you're strict and inflexible regarding your payment options, you may find your customers out shopping for greener pastures, so to speak.

In just about any business, you're likely to find that many customers would appreciate the option to pay for goods and services using personal checks. Even though cash still accounts for the vast majority of all purchases, paper checks are a close second, accounting for almost one-third of all retail spending. Because of their popularity, businesses cannot afford to lose customers by refusing to accept checks. Checks written for the exact amount of the purchase can sometimes spell the difference between an immediate sale and a return trip with cash.

Three simple reasons why your payment policy should include checks:
  1. Many people use checks simply because they "don't like to charge."
  2. Only one out of four checking account customers hold credit cards with available credit. Not to mention, over 25 million Americans cannot get credit approval.
  3. Accepting checks creates what is called "ticket lift." It is a fact that people spend more money with checks and credit cards than they do with cash.

With that said, there are still risks involved with handling personal checks, especially if you're unprepared. In fact, more than 450 million bad checks are written every year. Often times, the possibility alone of insufficient funds hangs over any large purchase. "NSF," "Account Closed," or "Counterfeit" are words you just don't want to read when you open your mail. There are, however, some basic precautions you can employ at the point of sale to reduce the risks associated with accepting checks. Many basic precautions involve a well-trained eye and good old common sense.

If you intend to accept or continue accepting checks in your business, establishing a detailed check acceptance policy could help minimize the financial losses from bad checks.

Merchant's Choice, a leading provider of check services nationwide, helps small businesses greatly reduce risk with proprietary services such as Merchant's Choice Unlimited. Through this new program, business owners pay a small monthly fee, and in turn receive a guarantee on all checks approved through the point-of-sale. Their check processing technology runs on existing credit card networks as well as functioning seamlessly with most credit card terminals that business owners already use. Because of this, start-up and installation fees are typically waived and the monthly cost is very low. When a check is swiped or keyed-in at the point-of-sale, the software works within seconds to cross reference a nationwide database of bad check writers. This technology is one of the most reliable solutions available on the market for the lowest possible cost. Merchant's Choice Unlimited has been especially rewarding for those business owners who frequently see bad checks, and with this program in place they can continue to accept a high volume of checks while reducing their bottom line.

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