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Rebuttal of RIAA Opinion

SOPA: Rebuttal of RIAA Opinion Pt. 1

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The RIAA just won’t quit. They’re taken up the crusade to push for anti-piracy legislation once again, as seen in this New York Times Op-Ed piece titled “What Wikipedia Won’t Tell You” written by Cary H. Sherman,chief executive of the Recording Industry Association of America, which represents music labels. The content of the piece is incendiary, and that’s being kind. The RIAA is adamant about their stance on piracy and are pressing the issue in every outlet they can. To quote Digital Underground from their Sons of the P album — which currently is not available for legal purchase online due to holes in the DU library in various legit digital music resources — “Like Ice Cube says, Once Again it’s On.”

Everyday They’re Shufflin’

The Stop Online Piracy Act and the Protect Intellectual Property Act were both killed in Congress — shelved because they were too wide open to abuse. The protest against these bills reached a collective crescendo when internet giants Wikipedia and Google and WordPress teamed up with a host of others for an internet blackout. When the largest source of internet information — and grade school kids’ favorite spot for help with their homework — goes dark and the search engine juggernaut that fuels the internet shines its spotlight on your bill, things have finally gotten serious. The U.S. citizens took notice of this blackout, and joined the internet in protest. And Congress heard the people and backed off this poorly written legislation.

But that hasn’t stopped the entertainment lobby. They went back to the drawing board and then returned mere weeks later with a new idea on how to combat online piracy. Unfortunately that new idea was the exact same idea as before. This was seen in the wishlist the International Federation of the Phonographic Industry (IFPI) released. The highlights of this list are essentially that the music industry wants pretty much the exact same things that were in SOPA, the same things that prompted the protest in the first place. A list of seven demands, which include the exact same far reaching calls for search engines and payment processors to police websites individually and be responsible to law enforcement for content they are indirectly connected to.

We’ll get back to this, but for now the point is the music industry felt the need to push for the same stuff that killed SOPA and PIPA. And that came right back to the forefront with Mr. Sherman’s opinion article in the New York Times. Essentially the RIAA wants a do-over and Mr. Sherman is here to tell us why that needs to happen.

Come At Me Bro

So today The Official Merchant Services Blog is going to try to put this issue in its place much like Blake Griffin did to Kendrick Perkins recently. Yes, we are going to Posterize the RIAA. Because the op-ed article indicates the RIAA has soft interior defense and can’t play man to man very well at all. First up we’ll start with the relative hypocrisy of Sherman’s ill-timed article found in this contextual relationship: Suggesting Wikipedia isn’t telling people everything, and then making this comment, “They knew that music sales in the United States are less than half of what they were in 1999, when the file-sharing site Napster emerged, and that direct employment in the industry had fallen by more than half since then, to less than 10,000.”

This is hypocritical because Mr. Sherman is leaving out some very pertinent information — which his employees were just recently bragging about on twitter. As we reported on January 31, the RIAA was excited about the IFPI wishlist because it had a series of statistics that showed the music industry is doing well with digital sales. The music industry claims Wikipedia is being deceptive and then suggests that they are still reeling from Napster, which was effectively scuttled back in 2002. They’re making a play for sympathy from an issue that happened almost a full decade ago, and yet they just got finished gloating about how successful they were this year!

Jonathan Lamy, senior VP of Communications for the RIAA, tweeted that paid subscription services rose 65 percent to 13.4 million in 2011. This tweet was in response to figures released by the IFPI which Lamy was excited to read. Lamy also tweeted that paid digital music services are active in 58 countries, generating $5.2 billion in revenues.

And then Cara Duckworth. The VP of Communications for the RIAA also cited the IFPI figures and then said: “W/more than half of all music sales coming from digital services, we know how Internet works. “Music=Innovation. Declare THAT. #CES #SOPA.”

What the RIAA isn’t telling you is far worse than what Wikipedia isn’t telling you. But Mr. Sherman isn’t about to concede facts when the agenda needs to continue to be pushed. The music industry is finally getting the hang of the digital market. Their own people brag that they know how the internet works. Declare that! But Sherman’s still waving the Napster suit in your face trying to claim that Wikipedia is obfuscating the issue.

It gets worse.

Born This Way

Sherman writes, “While no legislation is perfect, the Protect Intellectual Property Act (or PIPA) was carefully devised, with nearly unanimous bipartisan support in the Senate, and its House counterpart, the Stop Online Piracy Act (or SOPA), was based on existing statutes and Supreme Court precedents.”

The only thing in that statement that is rooted in the reality of what happened with SOPA and PIPA is that there was a lot of bipartisan work. Unfortunately, the work was bipartisan unity on finding problems with the so-called carefully devised legislation. Tech industry experts on both sides of party lines found the problems and holes in the legislation. As we reported on December 27, 2011, SOPA sparked unity in the federal government. And as we’ve written in our in-depth analysis, the bill was not very carefully devised at all. In that analysis we lean heavily on discussion from Congresswoman Zoe Lofgren [D-CA], an expert in the tech industry. We’ll highlight just a bit of Lofgren’s criticism of this bill, with questions raised: “Section 103 also allows a “portion of” a website to be deemed “dedicated to the theft of U.S. property,” regardless of the culpability of the website as a whole. Like many important terms throughout H.R. 3261, the precise meaning of these words is ambiguous, and will require years of expensive litigation to clarify. However, the plain meaning of the words seems to indicate that any large website could face a risk of termination by payment and advertising providers based solely upon infringing material contained in a single web page. ”

This is not carefully devised legislation. And as we eventually reported, the bill’s own sponsor admitted he did not fully understand the technical aspect of the bill and he backed off of it. Bill sponsor Lamar Smith is quoted in various media sources as saying:  “I have heard from the critics and I take seriously their concerns regarding proposed legislation to address the problem of online piracy. It is clear that we need to revisit the approach on how best to address the problem of foreign thieves that steal and sell American inventions and products.”

To Be Continued

Durbin Amendment Back In the News [2023 Update]

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The Official Merchant Services Blog returns to a topic that it covered thoroughly throughout 2011: The Durbin Amendment. With the Stop Online Piracy Act getting most of the headlines lately, Durbin Amendment’s continued impact on the payment processing industry has gone into stealth mode. Until today that is. Stick with us as we offer a whirlwind roundup of all things Durbin related.

Bank of America Took a Beating

We’ll start off our tour Durbin tidbits with this article by ABC News. Apparently Bank of America took a substantial hit from their plan to charge $5 per month to use debit cards. According to the article: “Bank of America’s failed plan to impose a $5 monthly debit card fee led to a 20 percent increase in closed accounts in the last three months of 2011 and a public relations headache.”

The article quotes Bank of America CEO Brian Moynihan as saying, “yes, we had some impact from the $5 debit fee. That’s why we made a decision to reverse it.”

It wasn’t all bad news for Bank of America though, as the bank reported earnings of $2 billion in the last three months of 2011, up from a net loss of $1.2 billion in the same period a year ago, boosted in part from a one-time gain on the sale of China Construction Bank.

Small Lenders Strike it Big

The next little bit of Durbin aftermath comes from this article by NACS online. As was seen in the Host Merchant Services in-depth analysis of the legislation, The Durbin Amendment only applies to lending institutions with assets over $10 billion. Smaller banks and credit unions are exempt from the Durbin Amendment. As a result of being exempt, a Wall Street Journal report cited by the NACS article states that these institutions have been “collecting fees that are often three times those imposed on cards by large banks.” 

For comparison, the article says: “The WSJ notes that a $100 sweater purchased with a debit card would incur a fee of 95 cents on a card issued by a smaller bank and only 26 cents for those issued by big banks. “

The article also suggests that banks face further uncertainty by April 1, 2012, when “all U.S. banks and credit unions must offer retailers more choices of companies used to process debit card transactions, a move that is expected to lower interchange fees further.”

New Target: Credit Card Swipe Fees

Time Magazine Online Feature Moneyland reports something that Host Merchant Services has already touched on before in The Official Merchant Services Blog — that Credit Card Swipe Fees may be the next target of legislators and financial reform. From the Time article: “There’s another interchange fee fight in the offing — this time over credit cards. According to CNBC, equity analysts who cover the financial sector have expressed worry that ongoing litigation involving several major banks could lead to a cap of 0.5% on credit interchange fees — one-fourth of what’s currently charged — potentially dragging down bank earnings. If that happens, consumers who are used to generous credit card rewards programs complete with double miles, accelerated earnings, and big sign-up bonuses might get a rude awakening.”

The Official Merchant Services Blog on December 13, 2011 covered the topic of a Credit Card Swipe Fee. In that blog we wrote: “the plan would end up working much like the Durbin Amendment has worked. Where the idea of reform would get overshadowed by how banks and credit card companies reacted to the law. There would be some shifting, so in that sense the reform would cause change. But that eventually the burden for paying for any losses that banks and credit card companies get forced into through reform would end up squarely on the shoulders of the consumers.”

The Time article notes something that Host Merchant Services already pointed out regarding a Credit Card version of the Durbin Amendment — Banks would take another huge hit because Durbin has language that freed up banks and merchants to market and promote options to the consumer directly. In short, Durbin’s language freed merchants up to promote credit over debit. And because of that, a lot of merchants did just that as Banks offered new programs to make credit the more attractive choice. Subsequent changes that would now penalize Banks for doing that would create a lot of negative momentum for Banks and added onus for consumers who get stuck with no good choices overall.

New Hampshire Law

This article from credit.com reveals that one state legislature is already making moves to see a Credit Card Swipe Fee Cap become reality. As the article states: “A piece of legislation introduced in the New Hampshire House of Representatives, House Bill 1319, has drawn some attention for the way in which it would drastically alter the credit card landscape between businesses and payment processors. The law will limit the amount banks chartered within the state are able to charge businesses for processing credit card transactions to just 1 percent of the total purchase value.”

The article goes on to state that many businesses pay costs that range from 0.67 percent of the transaction’s value to 4.76 percent and that a MasterCard spokesperson told the Nashua Telegraph that the average 1.75 percent.

Cash Still Rules Everything Around Me

Our last news brief on the topic of the Durbin Amendment and swipe fee caps is a little different. This article from the Huffington Post shows a study that reveals cash is still king. The gist of the article: “More than three-quarters, or 79 percent, of consumers said they made a cash purchase in the last seven days, according to a report released on Tuesday from Javelin Strategy & Research, a market research group for financial services. Compare that to about 65 percent of credit and debit cardholders who say they swiped their plastic in the last week.”

The article suggests that this is a consumer reaction to card swipe fees. The article states that consumers are choosing to pay for items with cash to avoid fees on small, everyday purchases. The convenience of plastic gets overrun by the savings consumers perceive they get from going back to cold, hard cash. The study indicates that cash is replacing debit for small purchases, and credit is replacing debit for big purchases and the Durbin Amendment’s lasting legacy may simply be that it pushes Debit out of the consumer’s arsenal of payment options.

Finding Quality Merchant Services [2023 Update]

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Today The Official Merchant Services Blog is playing a bit of catch up. The story we’re going to highlight and discuss is almost three weeks old. It was intended to run earlier, but technical difficulties with the blog’s production kept it from appearing until now. However, we feel the story is still worth some attention due to the issue it highlights about the payment processing industry.

The story comes to us from a Chicago, IL section of the Better Business Bureau (BBB). This article from the BBB says that the organization has seen a 42% rise in complaints against credit card processing services. The article, which originally was posted by the BBB on December 15 found that complaints were up for the 12 month period in 2011 compared to the previous 12 months. The breakdown was specifically 110 complaints in the recent 12 month period versus  77 complaints in the period prior.

Not Just In Chicago

The complaints aren’t just lodged in Chicago. This article from Fox40.com details similar complaints in Sacramento, CA. The article states: “The Better Business Bureau is warning businesses to beware of sales pitches by credit card processors that don’t reveal key details that could end up costing business owners more than they bargained for.”

And it quotes Caitlin Peterson of the Better Business Bureau of Northern California as saying “We’ve had over 1,700 complaints this year against the merchant processing business.”

What the Problem Is ?

From reading through the two articles — as well as an older BBB article about issues in the St. Louis, MO area — the problems that merchants are encountering are really straightforward. Business owners are being approached by salespeople offering big savings on their payment processing. And then once the merchant signs a contract with that person, they are saddled with hidden fees for services they were not told about. In short, the business owner is led to believe they are getting a great deal but end up having to pay out more because of all the things not mentioned in the deal. So complaints against payment processors rise in select areas.

Pricing and Transparency

This type of behavior is the exact reason Host Merchant Services utilizes its philosophy of Interchange Plus pricing and no hidden fees. These types of issues are why CEO Lou Honick says “Host Merchant Services is about bringing trust to the payment industry.”

“Payment processing is confusing,” says Honick, noting the ease in which merchants can get saddled with the types of issues that have cropped up with the BBB complaints. “The big guys make it difficult to understand exactly what your rate is and what fees are associated with accepting credit cards. We deliver personal service and clarity. Our people care about customer service and will take the time to explain how everything works.”

Honick also cites the process that Host Merchant Services uses to directly counter the problems that business owners encounter with other processors: “We believe that when you get your statement every month, you should understand every item, and it should match what you were promised in the sales process. If you have a question, there is a live person at Host Merchant Services ready to assist you.”

The Details

One of the primary ways Host Merchant Services combats the practices that lead to these complaints is with their pricing structure. Host Merchant Services uses Interchange Plus pricing instead of the more standard tiered pricing format. Interchange Plus makes statements easier to read, customer service easier to provide to merchants, and savings much easier to guarantee. Here’s a small graphic explaining the basics of how Interchange Plus works:

You can review a comparison between Host Merchant Services Interchange Plus pricing — which is simple and transparent — and the tiered pricing plans that other processors use in a two-part blog series that The Official Merchant Services Blog ran in October, 2023.

  • Part One
  • Part Two
  • Follow Up

What the BBB Advises ?

The BBB advises merchants take these steps to avoid getting stuck with the issues that their complainants have encountered:

Ask around.

The BBB suggests getting at least three estimates from different Payment Network Providers and to checkout he BBB Business Review of the merchant processing service. They also suggest asking fellow business leaders for referrals.

Know where to turn.

The BBB advises you check up on the support team that a potential Merchant Services Provider offers you. Can you contact them 24 hours a day? What is their response like outside of typical business hours? And the BBB advises you make sure their technical support can handle your needs as that kind of support is vital to your business’ success.

Try them out.

The BBB says that you should not settle without a trial period. You should make sure that the payment processor you choose has a 100 percent money-back guarantee before selecting them. Make sure their service works for you, and make sure they keep their promises to you.

Don’t get locked in to a long term contract.

The BBB is very clear on this. Never commit to a long term agreement that locks you in. Make the merchant services provider earn your business each and every month.

Get references.

The BBB advises that you get the payment processor to provide you with references. And then suggests you spend some time checking up on those references.

Make sure you know what you’re being charged for.

The BBB says that if you have a question regarding a fee that you were charged, ask the merchant services provider. Don’t let them hide fees on you. Make sure you understand your statement.

How Host Merchant Services Stacks Up 

Host Merchant Services falls in line with what the BBB advises merchants to do. The company places a big emphasis on transparency. Their salespeople will explain a merchant’s statement in detail. One of strengths of the offering from Host Merchant Service is their guarantee to save a merchant money. They achieve this by a statement analysis. Not only will Host Merchant Services explain the details of what your statement and fees are, completely transparent, while you process with them, they’ll also explain where the hidden fees are with your current statement.

Host Merchant Services will provide references. They do not lock you in to a contract. They do not charge you a termination fee. They provide free equipment and free paper for your terminals. And they offer 24-7-365 customer service where they guarantee you will talk to a real person that will help you out with your issues. You can even initiate a live chat with HMS Support right from any page on their web site.

As Host Merchant Services COO Dan Honick says, “You stay with us because you’re happy.”

Merchant Services: Statement Sleuth

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The Official Merchant Services Blog is here to share information with merchants to get them better prepared to understand how the payment processing industry works. This premise stems from Host Merchant Services and its philosophy to bring trust to the industry.

Payment processing can be confusing. And nowhere is that more evident than in a merchant’s processing statement. One of the ways some processors make their money is by hiding fees within the arcane labyrinth of a monthly statement, making the fees and the numbers difficult to understand.

Host Merchant Services believes that when one of its merchants receives their statement every month, that merchant should understand the items on the statement and that the fees should match what was promised in the sales process.

So in an attempt to help everyone understand that process better, The Official Merchant Services Blog is going to shine a spotlight on statements and see what there is to see.

What Is a Merchant Statement?

Every month, you receive a Merchant Statement from the company that processes your transactions. These transactions include Debit and Credit Card Transactions. This statement summarizes your net sales for all the cards that you process. It also provides your monthly transaction volume as well as provides you with an itemized list of your daily transactions. You can also see the majority of your debit and credit card processing fees. This is where we’re going to shine the spotlight, as this is where fees get hidden. Your fees on your statement include:

  • your transaction fee
  • your monthly discount rate for your Credit Cards
  • your monthly terminal fee (if you do not own your credit/debit card machine).
  • your Interchange charges
  • any chargebacks
  • third-party transactions
  • credit adjustments

The tricky part about these fees is that each company assembles their statement in a different way. Each payment processing provider has a unique statement layout structure, so most of the characteristics of the statement are the same but are put there in a different order. It forces merchants –– especially those who have used more than one processor in their time in business –– to do all of the eagle-eyed investigating themselves.

We’ll stick to the basics and then when that’s done, we’ll take a moment to explain why Host Merchant Services might be a little less confusing than other Payment Network Providers.

Card Deposit Summary

It’s pretty common for the Card Deposit Summary to be prominently displayed in a merchant statement. A lot of times it’s the first item a merchant will see on their statement. The phrasing may be a tad different –– perhaps it’s called a fund summary –– but for the most part it’s the opening line on each merchant services provider’s statement. The summary tends to include a laundry list of statement data, such as:

  • Amount of transactions incurred in that month
  • The dollar amount of those transactions
  • What credit cards were used
  • Any discount or coupon usage charges

Often this information is presented as individual daily line items, but some payment processors may combine all the data into one section.

Credit Card Fee Summaries

After the deposit summary information, most statements provide some sort of variation of how much the credit card issuer charged per transaction. This is usually called the Summary of Card Fees. As we explained in a previous blog series, a lot of payment processors offer a tiered pricing plan. And this is the section of the statement where you will see fees being charged for “qualified transactions.” That term specifically relates to your qualified tier in the pricing plan you signed up for. This section should include any fees, discounts and rates applied to transactions made through your merchant count. Most payment processors provide a complete list of card fee categories in this section, since qualified and non-qualified pricing tiers differ. Also included should be a listing for gross sales amounts per credit card and any fees and discounts applied to specific card transactions.

Transaction Fees

This section is an extension of the Summary of Card Fees section. This section lists each fee related to card transactions in dollar amounts. This can be a daunting section to sift through as the terminology used in this section is extensive. There is no shortage of card fee categories, and you’ll see chargebacks and batch header fees and ACH return fees mentioned here. This is why Host Merchant Services says payment processing can be confusing. The statements sometimes overwhelm merchants with tiny fees and cryptic buzzwords. Within that morass, the black hat companies will hide fees that some merchants aren’t aware they are paying or –– even worse –– aren’t aware they don’t even need to pay.

No Hidden Fees Guarantee

Now that some light has been shed upon the statement, and we can see where the fees get hidden and where the confusion takes place, it’s time to take a look at a much simpler way of doing this: Host Merchant Services offers a processing plan with no hidden fees. The company offers its merchants an Interchange Plus pricing plan. So right off the bat, there are no tiered pricing plan issues, so its merchants are not hit with “non-qualified” tier penalties and fees. Host Merchant Services also eschews a long-term contract. So there is no application or set up fee. No annual fee. No Non AVS Adjustment fee. Host Merchant Services does not penalize you with termination fees. Host Merchant Services also does not lock its merchants into contracts for equipment. The company provides free equipment, including free terminal paper. The prices that the company quotes during the application process are grandfathered, and will not increase at all during the lifetime of the business relationship.

It’s a simple and straightforward plan, really. Host Merchant Services shows you exactly what you will be charged on your monthly statement. The company has swept away many of the added charges that other companies hide on statement fees. And then the company sticks to the plan they quoted its merchant. The company will be happy to review your statement and help you find areas where you can save money each month.

Host Merchant Services Click Here Button

For more information contact the company here.

So monthly statements may be extremely confusing –– to the point where one thinks it is being done on purpose. But using some of the guidelines put forth here, or using Host Merchant Services itself, you can find your way through the puzzle that is payment processing.

Merchant Services: Black Friday is Here

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Let the shopping season begin! Black Friday is here, and the traditional marker for holiday shopping is off to an unusual start for 2011. The Official Merchant Services Blog is taking today’s blog entry to give you a bit of a roundup on the event.

It Started Early

The first sign that this year’s Black Friday was going to be different than others was that it got started earlier than ever. Crowds lined up for midnight openings at Best Buy, Target, Kohl’s and Macy’s as retailers angled to get first crack at consumers’ tight holiday budgets. Wal-Mart opened even earlier at 10 p.m. and Toys ‘R’ Us started at 9 p.m. The Holiday Shopping season, as reported by The Official Merchant Services Blog previously, has been adversely affected by online shopping and e-commerce. Statistics show that shoppers — using the convenience of clicks over the late-in-the-year discounts of bricks — had been starting their holiday shopping as early as May and as late as August. The kicker being, Black Friday was potentially going to lose some of its draw. So this year retailers pushed and pushed and pushed, edging the event right into Thanksgving Day — well evening — itself.

Consumers Are Out in Force

Right now there are contradictory reports coming in about how successful this move was for retailers. One article from CNN suggests moving Black Friday into Thanksgiving was a success. The article quotes Tom Julian, president of Tom Julian Group, a retail consultancy in New York as saying: “Taking Black Friday into Thanksgiving Thursday has proven successful.”

The article then goes on to say: “Despite some backlash against such early store openings on Thanksgiving Day, the move seemed to pay off. At some Target stores, lines were more than twice as long as last year, according to the company. Men’s Angry Birds pajamas were one of the biggest sellers, along with televisions, game systems and cameras, spokeswoman Kristy Welker said.”

The article pointed out that lines at Sears, KMart, Macy’s and Toys’R’Us were all longer than previous years and business was ready to boom.

The Impact Might Not Be High

Despite the good numbers and fast start for Black Friday this article from CBSNews and its Early Show says that this year’s holiday shopping season could be a “bit of a bust.” The article takes a look at the big-picture of the economy and tries to see how even with a fast start, 2011’s Holiday Shopping Season could end up being a negative. The article stated: “this year, it might take more than one Black Friday to get retailers – and the U.S. economy – out of the red. Quijano added on ‘The Early Show,’ that while analysts project a 2.8 percent increase in Black Friday sales this year, that’s actually smaller than 2010, which saw a 5.2 percent boost.”

The article suggested consumers are wary and though they may be out in force, their shopping habits are more selective than usual: “In a national survey by the National Retail Federation, more than 50 percent of those who plan on shopping said they will wait to see if this weekend’s bargains are worth getting out and fighting for.”

And the article quoted Marshal Cohen, chief retail analyst of NPD group, a marketing research services firm as saying: “There is no stimulus package, there is no jobs program, there is no tax rebate that the president’s put on the table, so it’s really up to the consumer to go toe the line themselves.”

Black Friday: Is It Worth It?

That brings us to this Digital Trends article, which suggests that Cyber Monday — and overall the convenience and growing popularity of e-commerce itself — is going to really cut into retail shopping and Black Friday in a big way this year and in the coming years. The article states: “Not only have brick-and-mortar retailers felt the push of Cyber Monday sales, but some companies like Amazon and eBay are beating in-store retailers to the punch by opening for business Thanksgiving morning. The lure and ease of the Internet has also evolved e-commerce and altered the shopper’s frame of mind, which all might be heralding the end of Black Friday as we once knew it.”

The article puts it simply that the lines and the hassle of sidewalk and mall shopping on one day of the year doesn’t give enough value to consumers when stacked up against the ease of click shopping online. The deals aren’t big enough compared to what shoppers find online. And there just isn’t any fighting that needs to be done to get to the products. No one shoves you out of the way when you slide your mouse or type in a browser menu bar.

Don’t Forget Groupon

Beyond the convenience factor, there’s also the fact that the deals on Black Friday are not as compelling as they used to be. And that’s because sites like Groupon and Living Social have been consistently blitzing consumers all year long with deep discount savings day in and day out. The Holiday Shopping Season is no exception. And so now consumers have a lot more options than just standing in line at BestBuy at midnight fighting over an item. They can shop around on the web and find something that may save them more and avoid the line entirely.

In Conclusion

It looks like this year’s Holiday Shopping Season has gotten off to a strong start. Black Friday is nowhere near being “dead.” It’s just that the numbers indicate this may be a really good year for shopping overall. Because of that, despite an increase in sales this year Black Friday’s impact might still be getting watered down. In other words, yeah, the numbers will be up for Black Friday, but that could just be a byproduct of all numbers being up this quarter. Holiday Shopping booms all over. And Black Friday numbers benefit. But many still feel that e-commerce is going to continue to grow faster and faster, eating into brick-and-mortar retail numbers. The Bricks vs. Clicks battle still seems to favor the clicks.

Host Merchant Services, payment network provider of both retail processing services and an entire lineup of customizable e-commerce solutions tailor made to a merchant’s specific needs, is able to help you maximize your potential in both areas. We can help you navigate through the busy bustle of holiday shopping and find the transaction processing services that serve you best.

Superior Customer Service

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As we close in on the Holiday Shopping Season, customer service becomes more and more important. That’s not to say customer service was unimportant prior to now; it’s just that most businesses –– e-commerce ventures as well as brick and mortar stores –– see a large increase in consumer activity during the Holiday Shopping Season. Any customer service mistakes that get made in this time period end up being magnified due to the time of year.

As part of its ongoing series about Holiday Shopping, The Official Merchant Services Blog wanted to take a moment to examine customer service.

By The Numbers

It’s important to not let customer service fall to the wayside in favor of more direct methods of obtaining profits. While marketing campaigns and aggressive sales techniques can see quick results in black and white numbers, customer service is the foundation for maintaining a long-term sales relationship. The old adage about how it costs more to acquire a new customer than it does to retain an old one is what’s at work here. A 2010 MediaPost report indicated that U.S. businesses lose approximately $83 billon each year as a result of poor customer service. The report also indicated that 71 percent of U.S. customers have ended a business relationship based on poor customer service. The report also noted that poor customer service has an impact on a business’ competition –– the study cited by MediaPost found that 61 percent of customers surveyed said that they take their business to a competitor when they end a relationship with a company due to poor customer service.

Do Not Panic

While those numbers from that survey are compelling, our first bit of advice is: Do Not Panic. Just like Customer Service is a long-term relationship building tool, it’s also an aspect of your business that you can take your time building. So even if you hit a few customer service snags on Black Friday, or there’s some pitfalls for your e-commerce business’ customer service on Cyber Monday, it’s not time to panic. Take it easy, and keep the focus on the long-term goal of quality customer service.

Anecdotes and Analysis

We’ve all experienced horror stories that back up the numbers cited above. It could be something as simple as walking into a store looking to purchase a specific product and not receiving any assistance. I’ve had this happen to me quite a lot when walking into a specific retail chain near where I live. I’ve gone there multiple times looking to purchase printer cartridges. And each time I have trouble finding the specific type I’m looking for and it seems I can never get an employee to even ask me if I need help. It’s made me stop going there and I now buy my printer supplies online instead.

What horror stories have you experienced? What’s the worst customer service incident you’ve encountered? Has it affected your approach to your own business and the customer service you provide?

Make Good Customer Service a Habit

Host Merchant Services makes customer service a part of their core business philosophy. It’s part of the Payment Network Provider’s overall goal to bring trust to the payment industry. And it’s part of why this merchant services blog exists. The company wants to share information with customers as well as potential customers, and take the time to explain the confusing aspects of the payment processing industry. Customer Service defines the approach to the customer relationship; it’s why Host Merchant Services makes guarantees such as no contracts and no termination fees; it’s the basis for how Host Merchant Services offers free terminals to our merchants.

Merchant Services and Payment Network Providers need quality Customer Service

Defining Good Customer Service

Using that background in customer service focus, Host Merchant Services offers some easy tips to help you enhance your customer service:

Make a Good First Impression

A customer’s first contact with your business should be a positive experience, no matter if that contact is a telephone call, an internet click through or face to face.

Real People Over Automated Responses

Contact between customers and potential customers hinges on interaction between real people. This applies mainly to the way your business takes phone calls or handles internet contact. Try to cut down on phone trees and automated telephone recordings with confusing menus. For your e-commerce businsess, make sure your website is designed well and easy to navigate. Give your visitors a convenient hub to continue to visit. And make sure you clearly mark how to contact you for customer service related issues.

Be honest, Offer Facts

Do not sugarcoat things when dealing with your customers. While it may be uncomfortable to deliver bad news, customers and potential customers prefer honest and factual information. Trying to sugarcoat things makes them feel like you are being manipulative and will have a negative impact.

Get Back To People

Follow up with people who contact you. Delays in returning voicemails, neglecting e-mails, not responding to posts to your twitter, are all negatives in customer service. If someone takes the time to try to contact you, the best thing you can do to maintain good customer service is to get back to them promptly.

Work With Your Customers

When you do interact with your customers via phone calls, e-mails or face to face, remember to work with them –– not against them. Listen to what they are telling you. They contacted you with a concern, so take in their information. Be polite. Most customer service issues revolve around customer complaints. But if you listen to them and are polite with them, you take a huge step forward toward getting their issue resolved. Customers want to be heard, and they want you take action on their behalf. Even if you can’t do exactly what they want, the process is there for you to help them feel like they are valuable to your business.

Stick To Your Plan

That’s the basics of it. It’s really just a process that involves you interacting with your customers on a human level. Getting back to them promptly. Giving them your focused attention. And doing what you can to make them feel like they are valuable to your business. This is all about building a long-term business relationship. So while you may experience an increase in the static you get from irate customers through November and December, if you stick to a plan that focuses on customer service and relationship building, you will navigate through the storm of the Holiday Shopping Season.

We want to hear from you. What does good customer service mean to you? Better yet, what does it mean to your customers? When they define good customer service, does your business immediately come to their minds? What are some tips you would offer for obtaining excellent customer service?