Business can increase revenue in two key ways: making more money and reducing expenses. Both are critical to growing a successful business. After all, it doesn’t matter how much money you make if you spend it just as quickly. Luckily, there are a lot of things that businesses can do to decrease costs and boost profits. For example, every business should find ways to decrease transaction fees.
What Are Business Transaction Fees?
Businesses pay transaction fees each time that they make a sale. It always costs money to process that sale. In particular, when a customer pays with a credit card, the business has to pay a transaction fee to the credit card processing company. Depending on the size of the business, this might mean dozens, hundreds, or even thousands of tiny transaction fees per day. That cost adds up.
In addition to credit card transaction fees, some of the other common fees associated with retail business transactions include:
- Ongoing costs associated with computers and POS systems to process payments
- Customer services costs; paying your employees for the time of the transaction
How to Reduce Transaction Fees
There are several ways that businesses can reduce their transaction fees. Here are three key methods:
1. Negotiate Lower Credit Card Processing Fees
Credit card processing fees are set by the credit card companies as well as the companies that process the transactions. Sometimes you pay both a percentage of the sale and a flat rate for each transaction. If you aren’t careful, these transaction costs can really add up. Therefore, it’s crucial that you shop around to make sure that you’re getting the best deal on your credit card processing.
In other words, you want to be able to easily and affordably process all of your customers’ credit cards. However, you want to do so at the lowest cost per transaction. Review your options and find the safest, most cost-effective service that works for your business.
2. Upgrade to a Better POS System
If you have a retail store, then you have a POS system. As a customer, you’ve probably noticed that every store’s system seems to be a little bit different. For example, some of them take a really long time to process a transaction. Others are faster but perhaps less intuitive for the customer. Still others work well but take up valuable counter space. In order for your business to minimize transaction costs, you want a POS system that works quickly, reliably, and safely without compromising your business design.
You might want to consider a POS system that works not just at the countertop but also on handheld devices. If your employees can process sales in the line, your customers will move through that line more quickly. Therefore, you offer better customer service that’s less time-consuming, improving your overall cost-effectiveness of the sale.
3. Streamline Online and Offline Sales
Many retail stores have both a brick-and-mortar storefront and an online presence. Are you using two separate systems for processing those payments? If so, then chances are that you’re wasting money. Find a POS system that works in both places. Keep transaction fees to a minimum by keeping everything streamlined.
In fact, the more that you can do with one system the better. If the software and gadgets that you use for sales can also handle other tasks (such as employee time-keeping), then you have a system that functions well at a low cost.
Always look for small ways to reduce your transaction fees. Furthermore, look to ways that you can reduce your other overhead costs. The lower your costs, the higher your profits. That’s the bottom line.