Offering over the phone payments

Discussion in 'Ecommerce Forum' started by D.G Holdings and Procurement, May 22, 2011.

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  1. D.G Holdings and Procurement

    D.G Holdings and Procurement UKBF Newcomer Free Member

    56 3
    Okay,

    My website is now fully operational and has the secure shopping cart linked to paypal.

    I am wondering if it would be beneficial to offer potential customers the opportunity to pay via card but over the phone to offer a personal point of contact.

    Bearing in mind my business is very much in it's infancy at this time i would like to hear the pro's and con's of this from those who are more experienced in this.

    Asnwers appreciated.

    P.S. I do also offer cheque and cash payment methods.
     
    Posted: May 22, 2011 By: D.G Holdings and Procurement Member since: May 15, 2011
    #1
  2. GotHorse

    GotHorse UKBF Newcomer Free Member

    5 1
    Hi,

    Whilst I wouldnt call myself experienced quite yet, any additional way of paying can only help can't it? Paypal do a virtual terminal option which allows you to process over the phone payments. My other other half used to work for an ebay power seller, she said they used to get at least 60 calls a day with people wanting to pay over the phone, which helped because you then avoided the ebay fees.

    One thing to be aware of is PayPal is roughly twice as expensive at processing card payments than the cheapest merchant processor we have found, which is Lloyds TSB Cardnet at 1.8% for CC and 27p Debit. PayPal I believe is 3.4%+20p upto £1500 in transactions, the lowest it drops to is 2.4%+20p.

    Like I said, im not experienced as we are just getting started but it feels like ive researched enough to write a damn book on the subject :)

    take care

    GotHorse
     
    Posted: May 23, 2011 By: GotHorse Member since: May 23, 2011
    #2
  3. Sky Racer

    Sky Racer UKBF Regular Free Member

    125 29
    I would fully recommend it. We started with a website that offered buyers the option of paying online with a credit or debit card but had a lot of customers phone us wanting to pay over the phone as they did not want to enter card details online. Barclaycard merchant services offered us online payment processing that is simple to use and cost effective. We now have about 35 percent of our sales completed over the phone.
     
    Posted: May 23, 2011 By: Sky Racer Member since: Dec 27, 2010
    #3
  4. deniser

    deniser UKBF Legend Free Member

    8,100 1,702
    Our experience has been different:

    1. People ordering by phone were more likely:
    (i) to be lonely and just want a chat and keep you talking for ages
    (ii) to be fraudsters thinking they could get round the extra security you might have online
    (iii) to send stuff back
    (iv) to have their card declined
    (v) to change their minds etc and mess you about

    2. When someone rang to ask if they could order by phone and we said no, not a single one didn't subsequently place an order online, however much they protested, so we didn't lose any sales

    3. We calculated that each telephone order took roughly 15 minutes to process compared to no more than 5 minutes for an online order. If you have nothing else to do then that's fine but for us it would have meant employing an extra person to handle the calls without a corresponding increase in sales.

    4. As we would have to manually decrease the stock levels this also led to mistakes in stock control.

    5. If you enter details in a virtual terminal then you need a higher level of PCI Compliance which we were not willing to pay for

    6. If you enter details in an actual terminal then you don't have the compliance issues but you can't keep the cardholder details meaning that if you need to refund them you need to contact them again plus all the associated hassle.

    Refusing to accept phone orders is one of the best things we ever did.

    If, however, you do not have high volume sales or you are just starting out with time on your hands then not all the above issues will apply.
     
    Posted: May 24, 2011 By: deniser Member since: Jun 3, 2008
    #4
  5. minz

    minz UKBF Newcomer Free Member

    33 3
    I too think it's a great idea, I would prefer to pay over the phone than online, and especially as we are about to lose the use of guaranteed checks its another payment method.
     
    Last edited: May 24, 2011
    Posted: May 24, 2011 By: minz Member since: May 8, 2011
    #5
  6. jamesp34

    jamesp34 UKBF Newcomer Free Member

    31 5
    We take payments over the phone and it is definitely something that I would recommend.

    It may cost around £250 to set up your merchant account, but we have found that taking payments over the phone is very beneficial. A lot of people are still uncertain of paying online so it gives them the option to call you and they feel more at ease when they can actually speak to a person to process their payment.

    Phone orders do take time to process, but once you get a routine then it is easy and well worth doing in my opinion.
     
    Posted: May 24, 2011 By: jamesp34 Member since: May 20, 2011
    #6
  7. OptiRick

    OptiRick UKBF Regular Free Member

    318 48
    Definitely, many like to contact a company they are buying from just to give them the comfort of knowing there is someone actually there, and i'm sure if they get a friendly voice on the other end it will help cement a future relationship.

    Plus with all the talk of ID theft some aren't keen on tapping their details in online.

    As deniser says though, some like a chat which can be nice if you have the time but a real pain if you haven't!
     
    Posted: May 24, 2011 By: OptiRick Member since: Jun 4, 2010
    #7
  8. D.G Holdings and Procurement

    D.G Holdings and Procurement UKBF Newcomer Free Member

    56 3
    Thanks for the replies.

    Our website offers the facility of a customer service contact for any queries that customers may have and to address and concerns also.

    We do also offer customers the opportunity to pay via cheque/cash/postal order but this does take a little longer due to the issuing of invoice to customer and that being sent to us with completed order form.

    I am still considering offering the facility of taking payments over the phone as i work full time nights as a cash services manager, so my days are pretty free during reasonable hours.

    Can anyone suggest some reliable start-up options for me to consider, bearing in mind my business is only in it's infancy and we havent driven hard for sales as yet.
     
    Posted: May 24, 2011 By: D.G Holdings and Procurement Member since: May 15, 2011
    #8
  9. kulture

    kulture UKBF Legend Staff Member

    8,190 2,277
    We offered over the phone payment, no-one took us up on it. We removed the option, conversion rate went up! I guess because the vast majority of our orders are out of business hours, and people who phoned found us out.

    It also would depend on what you are selling and how much. If I was buying a £1,000 coffee machine, I would like to call and talk. If my order was £20 then I checkout online.
     
    Last edited: May 25, 2011
    Posted: May 25, 2011 By: kulture Member since: Aug 11, 2007
    #9
  10. JamieM

    JamieM UKBF Ace Free Member

    2,324 350
    From what I've read on here over time I think telephone orders are on the decline, people are getting more comfortable ordering online.

    Also due to the nature of your business I think you will receive even less than a 'normal' ecommerce business.

    I have read your other thread where you said you expect a turnover of £1,000 in your first year. Assuming you actually meant profit I still don't think a business of this size merits a full time commitment to telephone orders.

    If it was me I wouldn't do it, I don't think you'll get enough orders to justify it.

    However, the only way you will know for sure is to test it. I would recommend outsourcing order handling to a company like www.alldaypa.com and there aren't enough calls to make it worthwhile you can just cancel it. There is no point in tying yourself to the phone needlessly.
     
    Posted: May 25, 2011 By: JamieM Member since: Mar 22, 2006
    #10
  11. smo

    smo UKBF Ace Free Member

    2,094 336
    It really depends on your business, we have been taking phone orders for nearly 19 years and we are primarily a mail order business. Because what we do is highly personalised and everything is a one off customers like to ring us and discuss their order, yes we get the "lonely old dear" but actually its quite nice to connect with your customers and give a really good service.

    An order can take as little as 1min 30 seconds for a straight reorder with card payment, we have had orders take over 15 mins though with muliple products and complex details.

    Its well worth considering in our experience.
     
    Posted: May 25, 2011 By: smo Member since: Apr 3, 2010
    #11
  12. PayPoint net

    PayPoint net UKBF Newcomer Free Member

    389 70
    It might be worthwhile asking your customers if telephone payment is an option they'd like to see - maybe put a poll on your homepage or contacting your existing customer base?
     
    Posted: May 25, 2011 By: PayPoint net Member since: Aug 18, 2008
    #12
  13. D.G Holdings and Procurement

    D.G Holdings and Procurement UKBF Newcomer Free Member

    56 3
    I have posted a question poll via our facebook page so i hope that will allow me to gague the interwst in the option.

    For now i think i will leave things as they are and just see how business goes. If its releatively steady then it may become a possibility but at this time i dont expect to make more than £1000 in the first year inclusive of initial outlay.

    Will keep my eye on it and see.

    Thanks for the help
     
    Posted: May 25, 2011 By: D.G Holdings and Procurement Member since: May 15, 2011
    #13
  14. Virtual Hand

    Virtual Hand UKBF Newcomer Free Member

    1 0
    I agree with Jamie, it is certainly something you could outsource. It is something that I have been asked to do because of the time element involved. After taking the call the invoice, receipt and any other literature can be sent out but again time consuming. So to outsource would definitely save alot of time - but that obviously will cost - so your time or someone else's - who would do it cheaper? On the other hand who would carry out the job without being distracted, fully and following the instructions to the letter.
     
    Posted: May 25, 2011 By: Virtual Hand Member since: May 17, 2011
    #14
  15. bediwin

    bediwin UKBF Newcomer Free Member

    116 24
    I was looking into exactly this today - be warned that you have to be PCI-DSS compliant if you're going to take card payments yourself over the phone.

    I only had a quick glance over the regulations so maybe someone could clarify, but it looks like they expect you to have a pretty sophisticated set of IT processes in place and segregate any equipment you will use for the virtual terminal from the rest of your network - so you can't just use the PC sitting on your desk for it.
     
    Posted: May 26, 2011 By: bediwin Member since: May 3, 2011
    #15
  16. danny156

    danny156 UKBF Regular Free Member

    140 5
    I never knew this - please can someone confirm this ??
     
    Posted: May 27, 2011 By: danny156 Member since: Jan 11, 2011
    #16
  17. D.G Holdings and Procurement

    D.G Holdings and Procurement UKBF Newcomer Free Member

    56 3
    I knew there would be security compliance issues but i thought that a dedicated IT terminal separate from the main operating unit i.e laptop would suffice if protected correclty would it not?
     
    Posted: May 27, 2011 By: D.G Holdings and Procurement Member since: May 15, 2011
    #17
  18. deniser

    deniser UKBF Legend Free Member

    8,100 1,702
    The compliance is pretty stringent which is one reason why we don't take phone orders. But you don't need to get certification if you use a real as opposed to virtual terminal.
     
    Posted: May 27, 2011 By: deniser Member since: Jun 3, 2008
    #18
  19. silvermusic

    silvermusic UKBF Ace Free Member

    2,162 586
    I can't help thinking some people are missing something here. If you're smart then taking phone orders is a great way of upselling to better more expensive alturnatives and additional add-on sales. A friend of mine does this and can easily double the sale value of the item they originally phoned up to pay for. Naturally what you're selling needs to be of a price that makes the time and effort worth it.
     
    Posted: May 28, 2011 By: silvermusic Member since: Nov 22, 2008
    #19
  20. deniser

    deniser UKBF Legend Free Member

    8,100 1,702
    Depending on what you are selling of course.
     
    Posted: May 28, 2011 By: deniser Member since: Jun 3, 2008
    #20
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