eCard Transactions
There are two things I’d like clubs to know about collections:
1. Outsourcing your collections activity can pay big dividends for clubs today. One of the benefits of outsourcing your collections activity to a professional organization is a customized solution that caters to your club’s environment. Customized solutions allow staff to focus on core business tasks such as bringing in new members and keeping existing members engaged. Another benefit to outsourcing is utilizing a payment processor’s intelligent database built directly into their system. Intelligent databases help clubs retain their existing members and can be set up with little or no cost to the club.
2. Changing the mindset of collections from traditional activities such as writing letters and making phone calls, to a more proactive and innovative approach can be beneficial. Traditionally, when members’ dues are returned via EFT, credit or debit card and the member has not made an attempt to contact the club for a couple weeks, traditional collection methods kick in. These methods can be costly and ineffective in the long run. In many cases, the club gives up 15-40 percent of what is collected and the intrusive collection activity has alienated the member from the club altogether.
The technology available today through intelligent databases can allow your club to electronically recover over 80 percent of failed membership drafts within the first several weeks of a return. This is all done without the need of traditional collection activities such as writing letters and making phone calls. Intelligent database systems can also alert the club when members’ payment information has changed. That change typically occurs when the member’s card has been reported lost or stolen and a new card has been issued.
Using intelligent-based systems gives your club the opportunity to increase membership retention, increase your cash flow and increase your staff’s focus on your club’s core business. These systems can be very cost effective to the club by reducing the number of members that need to be sent over to a traditional collections agency.
In today’s world, we are familiar with the issue of corporate data breaches — the most recent affecting over 70 million retail customers. Clubs can avoid this by using the latest technology in payment processing, called Tokenization. Tokenization takes members’ billing information and stores it back at the payment processor level. The processor creates a key that will be unique for each member, that doesn’t hold any of your members’ billing information. This takes the burden off the club to store and keep members’ billing information secured. The club no longer has to worry about being PCI compliant and is no longer at risk of being hacked into and losing creditability with its members.
Craig Millius is the CEO of eCard Transactions. He can be reached at craig@ecashflowusa.com or 402.835.0734.
EZFacility
There are three big billing mistakes clubs commonly make:
One is neglecting to manage staff access to billing information. Owners and managers should strategically select a handful of employees who are privy to financial data and authorized to alter invoices and issue refunds. With club management software (CMS), owners and managers have the option to restrict the level of staff access to stored financial details and billing features. Restricted access decreases the possibility of bookkeeping inaccuracies and lost revenue, while increasing member data security.
Another billing mistake clubs make is neglecting to assign revenue categories (ledger codes) to services, resulting in inaccurate financial reports. A revenue category is a grouping tool that clubs can use to differentiate revenue streams. Most CMS solutions offer the option to assign revenue categories to the various services offered by a club. Categorizing transactions allows for detailed financial reporting, which helps owners and managers determine which revenue streams are the most profitable.
Finally, many owners and managers fail to establish an in-house procedure for efficiently tracking finances. A schedule should be created to dictate the days of the month on which open invoices are reviewed and assessed, payments for recurring packages and monthly memberships are charged, failed transactions are addressed, and the like. It is very easy for a missed payment or open invoice to slip through the cracks if there is no processing structure in place.
Owners and managers of clubs that store, process or transmit credit card data have a responsibility to protect that data. Data is most effectively protected when both the club and its merchant processor comply with PCI (Payment Card Industry) data security standards. These standards were developed to protect credit card information during and after a financial transaction.
There are six main requirements to become and remain PCI compliant and the costs are minimal. These include:
- Building and maintaining a secure network. Installing and using a firewall configuration will help protect access to your clients’ data. Changing all system default passwords to create unique employee user IDs also helps to ensure security.
- Encrypting every credit card number to protect cardholders’ data.
- Maintaining a vulnerability management program to confirm all systems are protected. To do so, install industry standard anti-virus and malware security.
- Implementing strong control measures by restricting network and physical access to cardholder data to a few specific employees.
- Regularly monitoring and testing networks and systems that process and hold cardholder data. This includes participating in PCI compliance audits.
- Maintaining an information security policy.
Remember, consumers are smart. If they discover you are not protecting their data, credit card or personal, they will find another club that does. By not being certified you are risking your business.
Emily Wilensky is the Marketing Manager for EZFacility, Inc. She can be reached at ewilensky@ezfacility.com or 516.336.6536.
