Christian Menard, the marketing manager at Jonas Fitness, shares why an Account Updater is the no. 1 club investment to improve cash flow.
In today’s business environment, club owners always want to increase collections. Still, member credit cards are declining at ever-higher rates due to fraud alerts, lost or stolen cards and account changes.
If you’ve ever had a member’s credit card payment returned due to outdated billing information, you understand the frustration and the unfortunate loss of potential cash flow. To make matters worse, if you’ve ever had to contact a member to get their updated card information, not only did you risk waking that sleeper member, but you’ve also wasted countless hours of your employee’s time. This time could have been saved with a simple automated service guaranteed to improve cash flow and collection rates.
Sleeper members are not your club’s only clientele at risk of being affected. Missing payments from regular members can cause interruptions to their active membership and force your merchant to add late return fees. Now, you’ve managed to take the risk of waking that sleeper member and upset the critical demographic of your club, usually your most fervent supporters. But what if it didn’t have to be that way? Your payment processor or CMS provider — if you use them for billing — offers an Account Updater service that enables you to ensure continuity in your recurring billing operations and increases your collection rate. Unfortunately, most club operators may not know what an Account Updater service is and how it operates.
So, let’s define some key terms. First, what is this Account Updater? It’s an automated service provided by Visa and MasterCard — or your billing CMS provider — that retrieves updated billing information when a card has been replaced, reported lost, stolen or has a new expiration date. This information can include an updated cardholder name, expiration date and account number, eliminating potential future declines caused by invalid card numbers.
Sounds great! But how exactly does this work?
All Visa and MasterCard credit cards used at your club during a specific period are sent from your CMS or billing provider’s payment engine to the Visa/MasterCard Account Updater system. All card numbers are then scanned and cross-referenced to see if updated card numbers and information exist. If updates are present, that latest information is provided to the payment engine and the updated information is then used during your next billing period.
OK, so how will I benefit from Account Updater?
On average, clients using Account Updater have seen at least a 14% response rate based on cards submitted each month, which puts money back in their pocket with improved collectability. If you use a club management software vendor for your club’s billing, you should be able to access and run reports detailing which member accounts have been automatically updated with this service.
Account Updater provides a straightforward means of staying current with your member’s accounts, saves you time and assures you continue receiving uninterrupted payments. The benefits are compounded when Account Updater is coupled with a well-rounded member-managed billing service regimen and the power of a full-featured CMS. If you’re interested in utilizing Account Updater, contact your CMS or billing provider and ask them for further information on whether it suits your club and your billing infrastructure.