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Marketing Services

The Support Report

1 Aug, 2008 By: Doug McPherson Response

Experts in teleservices, fulfillment and shipping, and payment processing explain what DR marketers need to know to raise profits, lower headaches and ... much more.

IFS also auctions television and movie props, including items from such shows as "Survivor," "The Contender" and "The Apprentice" on its own online auction system. "While IFS already had the expertise to crate and ship the items, we needed to develop a way to auction online," Arvidson says.

Arvidson offers additional suggestions to boost revenue: "Be creative and innovative to maximize sales in all business channels. Use and test emerging technologies. [Hire] companies that handle all business with a high sense of urgency with a team and creative approach."

Payment Processing That ... Pays

No doubt, consumers are using more forms of media, but they're also transacting in more places and, of course, using more ways to pay for what they buy. Payment processing insiders say DR companies need to ensure they're not leaving money on the table by not offering as many payment options as possible.

"We're seeing more modes of commerce and card-not-present and E-check transactions are growing," says Chris Reinmuth, director of business development at Litle & Co., a Massachusetts-based payment processing company that specializes in payment when a credit card is not present at the transaction.

Another item where DR companies can save potentially millions of dollars is learning how to better manage chargebacks, credit card transactions where refunds are made to unsatisfied customers.

"We've seen some companies lose a million dollars in fees and fines for charge backs in a single month," Reinmuth says. "It's fairly common in nutraceuticals, apparel and diet categories. But chargebacks aren't all that bad — you just need to understand how to manage them."

Payment specialists also say DR marketers need to understand that payment card industry (PCI) compliance is a reality. Sziklai says PCI involves multiple levels of security, from network monitoring to encryption, destruction of card data and other security policies. "You need to ensure that any current vendors are fully PCI compliant," Sziklai says.

Swanson agrees with Sziklai and says if you're not working with a fulfillment company that's certified, "You're running the risk of being unable to process credit cards, not to mention the security and liability risks you will incur by not working with a certified company."

Brian Wood, director of PowerPay Direct, a division of PowerPay, a credit card processing and electronic payment services in Portland, Maine, says a couple of products are emerging on the payment landscape that may help direct marketers reduce processing costs and add operational efficiency. The first is the direct integration of cardholder data capture for card-not-present transactions that eliminates the need for a third party gateway.

"Today, some processors have their own direct interfaces with which to communicate directly between them and the point of sale connection," Wood says. "Depending on how the processor chooses to charge for this capability, if at all, it can save the marketer per item fees they may have previously paid their processor for the gateway connection, or paid the gateway provider directly."

The second product is remote deposit capture (RDC), an electronic check imaging system that allows businesses that receive paper checks as payment from consumers to scan and electronically deposit those checks as electronic items to their bank account. "RDC can be a benefit to direct marketers such as catalogers and direct mail marketers, as well as fulfillment centers, call centers and even Web store infrastructure providers that accept checks on behalf of their clients," Wood says.

Another growing concern is fraud. The Merchant Risk Council (MRC), the retail industry's trade association that promotes secure online payments, has announced results of its 2008 annual merchant fraud survey, which revealed that merchants are losing up to 1.4 percent of revenue due to fraud. And the fraudulent order rate is 0.67 percent for large online merchants and 1.3 percent in the overall sample.

The MRC reported that those merchants who lost less due to fraud consistently incorporate more fraud detection tools and more automation in their order processes.

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