Revenue Generator: Internal Charge Accounts
Employees Can Contribute to Your Profit Margins
These days, internal charge accounts such as payroll deduction, declining balance and gift cards can be a very big piece of the pie when it comes to retail management, and for good reason. Capturing the business of employees and other groups can be a revenue jackpot. This can ultimately lead to a smoother, more cohesive retail environment as well. The idea behind internal accounts is customer retention. Since they have an account with your organization, they are likely to come back to you instead of a competitor. At lunchtime, customers are often spoiled for choice when deciding where to go for lunch. Suppose now, one of those customers has a $2.00 balance on their declining balance account within your organization. Assuming their lunch would cost around $5.00, they can spend $5.00 today at one establishment, or spend $3.00 today at your location for the same meal.
Gift Cards are another key account type, and the kind of internal account type that most people are familiar with. Many, many retailers and restaurants use gift cards. People love them too. If someone has a favorite retailer and receives gift cards for that retailer, that person now has a reason to go there and do business with them. Anyone who holds a gift card to a certain company has an incentive to purchase from them. Most often, they will want to make purchases over and above the value of the gift card, which translates to higher revenues for the company above the purchase price of the card. The biggest reason retailers have for using gift cards though is to keep people coming to their locations instead of their competitors.
Keep in Mind How to Manage Internal Charge Accounts
One of the downsides of using internal accounts can be managing it. It can be a lot of additional work to just maintain all these accounts. Depending on the size of your facility you might have thousands or even tens of thousands of accounts. This number can be ballooned by accounts that may no longer be in use because the employee no longer works there, or whose name was changed. For Payroll accounts, it’s important to touch base with account holders on a regular basis in order to keep them engaged, active account holders. One possible option to help mitigate this issue is to do an annual enrollment process that can help identify the employees who plan to participate in the program, and remove those who do not wish to participate. Luckily, most payroll processing companies already have a personnel file process in place that can help you ensure that only active employees are being imported into your system. Point-of-sale (POS) programs can automatically set any abandoned, inactive, or simply unused accounts to inactive so they do not clutter your account list. Typically, the process of keeping accounts up to date can be automated for ease of use by both your payroll company and POS vendor. It might be a big job to maintain an accurate, quality account system, but as account management systems mature, this process will become easier and easier.
Article by: Tom Blackmer - SuitePoint! Point-of-Sale Product Manager; Fusion, 1st Quarter, 2017