Who doesn’t love a pop-up shop? The quirky, short-term retail stores are on the upswing as of late, keeping neighborhoods vibrant by temporarily filling vacant spaces and giving brands the chance to show off their goods to the public — even if it’s just for two-day sprints.
For customers, pop-up shops deliver an exciting experience and fill them with a sense of urgency to get the latest sales. However, that feeling of excitement could quickly diminish if a they find the shop doesn’t take debit or credit, putting an unexpected hurdle in the way of completing their purchase, and diluting the whole customer experience.
In an age when only 50% of people have cash on them at any given time, it’s essential that pop-up shops give customers the option of paying by card. But since they’re only temporary, pop-up shops undoubtedly have different payment needs. Here are five things you need to look for when shopping for a payment solution:
Experience With Pop-Up Shops
Pop-up shops are pretty atypical. They’re around for just a short amount of time, and during this period, will likely bring in a large wave of revenue. In fact, pop-up shops operate so irregularly that old school payment processors might flag them as illegitimate. Now how’s that for a vibe killer? When looking for a payment processor, it’s essential to find one with experience in the industry. That way, the processor will understand that while your shop does seem like a ‘high risk scenario,’ it is a genuine business.
A payment processor that’s worked with pop-up shops will also get that things don’t always go as planned. A lot of assumptions need to be made in the pop-up shop business. And a payment processor with experience will make it easy for you to change your solution if need be. Realize your customers need printed receipts after all? With a good payment processor, it shouldn’t be a problem to have a printer delivered — even if it isn’t something that was originally agreed on.
In the retail space, pop-up shops usually require a range of payment functions, including the ability to print receipts, scan barcodes and work with inventory or catalog features. However, it’s not just big, bulky POS systems that offer these capabilities. Tablets do too, and for a fraction of the cost — they range from $200 to $1200. With built-in printers, hybrid card readers and the option to go wireless or use ethernet, tablets give you all the flexibility you need to handle sales.
There’s also the option of using mobile readers to accept card payments; these either plug into the headphone jack of a mobile device or use bluetooth. And while they might not always have the same cataloging backend as a tablet — they’re used mostly for accepting payments and emailing receipts — they are on the cheaper side. Payment processors offer non-wireless devices for $30-$70.
Great Rates And No Contracts
Long-term contracts make absolutely no sense for pop-up shops. That’s why a good payment processor won’t require you to sign one. If a processor tries to engage you in a lengthy agreement, it’s time to continue the search for a payment partner that offers more flexible contract options.
Similarly, you need to find a payment solution with fees in line with what you sell. Most payment processors charge a fee that’s a percentage of the transaction, plus a flat rate per transaction. So, if you sell lower ticket items — like coffee and donuts — and the fees are 2.75% + $0.20 for a $2 cup of coffee, your effective rate would be 12.75% for that transaction. All in all, it’s prudent for merchants to do a little math and find a payment processor that gives them a decent effective rate — this should be 2%-3%, depending on the type of business.
Pop-up shops aren’t around for long, so you’ll need to get the word out about your products. You might decide to run a coupon campaign on social media, or ask customers to tweet your poster to get a free item. But whatever the case, you’ll need a payment system that has the ability to track your promotions, and give you a sense of how popular the campaign really was.
One of our clients — a food truck — decided to use Instagram to bring in more traffic. If customers uploaded a picture of the food they bought, the truck promised to give them free chips and salsa upon their next purchase. Once the workers were shown the photos, they created an item in the tablet POS and marked it as free. At the end of the day, our client was able to run a report within the system to see how many items they gave away — and if the customer chose to get an email or text receipt, the food truck was able to retarget them at a later date with more marketing content.
Knowledge About Preventing Fraud
Pop-up shops are supposed to be fun. But getting targeted by fraud can really put a damper on things. It’s essential to partner with a payment processor that has a deep knowledge about how fraud occurs, has a dedicated fraud team, and offers devices in line with fraud prevention regulations. Most importantly, you need to ensure the devices are EMV compatible — this means they must include chip readers.
If the devices aren’t compliant, the stakes are pretty high. After the U.S. Fraud Liability Shift went into effect in October 2015, the merchant is now liable for counterfeit transactions made with chip cards on devices that don’t have an EMV reader. So, in short: once a consumer disputes a ‘mystery’ charge on their bill — called a chargeback — it’ll be the merchant on the hook for paying back the charge, and then some.
With cheaper operational costs and the chance to attract new customers, pop-up shops are a great way to further your business. However, while they may only be temporary, there’s no reason you shouldn’t partner with a payment processor and enable customers to pay by card — after all, it is what they expect. But remember: not all payment processors are created equal, so ensure you take a good look around for one that suits all your pop-up shop’s needs.
Drew Sementa is CEO of Tidal Commerce, a merchant solutions company that focuses on helping small and medium-sized businesses grow. Sementa has years of industry experience in the Merchant Services and Fintech industries and started his business in his own basement back in 2003. Since then he’s grown Tidal Commerce into a leading merchant provider.