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Table of Contents

Lead Story

Getting a jump on the holiday season


Industry Update

PCI SSC releases new encryption requirements

Data security an ongoing concern

Google Wallet rollout generates questions

PayPal staking claim in mobile payments sphere

Trade Association News


Seven steps to merchant success in recurring payments

Research Rundown

Meet The Expert: Andrew Altschuler

Selling Prepaid

Prepaid in brief

Nexon expands game card concept with Karma

Western Union enhances options at the POS


Kick complacency out the door

Brandes Elitch
CrossCheck Inc.


Street SmartsSM:
The ABCs of SAQs

Bill Pirtle
MPCT Publishing Co.

Reinvigorating the merchant club

Steve Norell
US Merchant Services Inc.

Trust in transparency

Jeff Fortney
Clearent LLC

Inspiration for women in payments

Peggy Bekavac Olson
Strategic Marketing

U.S. EMV implementation

Tim Cranny
Panoptic Security Inc.

Company Profile

First Annapolis Consulting Inc.

New Products

Look, Mom and Pop, no paperwork

CB App Express
Merchant Warehouse

An automation tool for walk-in payments

US Dataworks Inc.


Claim the podium


2011 Calendar of events



Resource Guide


A Bigger Thing

The Green Sheet Online Edition

October 10, 2011  •  Issue 11:10:01

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Reinvigorating the merchant club

By Steve Norell

It occurred to me while reading a competitor's statement recently that you just don't see a fee for a merchant club as much as you once did. In the past, it was almost a given that there would be a $4.95 to $6.95 monthly fee for the merchant club.

And as members of the club, merchants would receive free paper and ribbon and possibly free replacement of damaged terminals.

Well, ribbons are a thing of the past, and no one is going to replace POS systems or provide paper to POS systems, which have become increasingly commonplace over the years. So my thought was to ask why the merchant club has almost disappeared from today's landscape and how it could be brought back.

A club in need of improvement

Some years ago I represented a Super ISO that came up with what I thought was an outstanding merchant club. However, I later determined everything about it was done wrong. For starters, the fee was $9.95 per month, and the merchant level salesperson would add to that amount to make a small profit.

For that amount, the merchant received free paper and ribbon, warranty on the terminal, free electronic check presentment and the ability to obtain some type of health insurance.

All merchants were automatically enrolled and offered the program for free for a short time, after which they would have to pay the monthly fee if they did not opt out. On the surface, this looked like a pretty good deal until time and experience proved otherwise.

The merchants were livid because they were enrolled in a program they either did not want or knew nothing about. Truth be told, they were informed, but the problem was that club details were communicated in the statement in very small print. And we all know that merchants always read the messages in the statement, right?

Another thing that occurred was the ISO managing the club decided a year after the club was formed that only certain terminals would be covered by the warranty even though all club members were paying the monthly fee.

The thing that sealed the club's fate was that the health insurance was immensely flawed, and some merchants actually sued the ISO to get their money back. In short, the club was grossly over priced, and there was never any perceived value to the merchant.

Benefits that excite merchants

My company has a merchant club, and for the most part it is fair for the cost. But I was still looking for something that would make merchants go, "Wow!"

And then it came to me. A bank in my area was purchased by a much larger bank, so it no longer exists. But it offered something to its account holders that I knew I could copy and improve upon.

The bank printed a small pamphlet containing the names of its merchant customers who offered discounts to anyone banking with this bank. I thought it was brilliant on the bank's part: free advertising and a value-added service to the bank's clients.

So, as I write this, my colleagues and I are developing this piece to add to our merchant club. Technology has improved since the bank offered its program, so we are going to offer to all our merchants the opportunity to list themselves on a section of our website - as long as they offer a discount.

The listing will only be available to our active merchants. Merchant club members who want to receive goods or services from another merchant club member will be required to log in with their merchant identification number.

Once they pick the merchant providing the service, they will receive an automatic online-generated coupon to give to the merchant, which will prove they are a member of our club. What a great way to drive business to your merchants.

Tips for a better merchant club

I still feel there is a merchant club out there waiting to be offered that is a win-win for everyone. So after much thought over a drink, and with a cigar in hand, I am offering my points for the better merchant club

  1. For starters, only make merchants pay once a year. Seeing that dollar amount every month makes merchants feel like they are being nickel-and-dimed to death.

  2. Paper is one thing that merchants feel makes it worth being a member of the club, so make sure you explain that free paper is only for the general desktop terminals and not POS systems.

  3. Make the club affordable.

  4. Don't try to slip club membership past merchants using automatic enrollment or opt-out billing methods. That practice comes across as sneaky.

  5. Make sure the club offers benefits merchants will perceive as valuable.

  6. Include something that helps drive business to your merchants' doors.

Time will tell, but as merchant clubs go, I am hoping that these steps will make mine superior.

Steve Norell is Director of Sales at US Merchant Services Inc. Based in Port St. Lucie, Fla., he oversees the USMS sales force and maintains the company's bank and processor relationships. You can reach him by email at or by phone at 772-220-7515.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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