Tanning Salons Reduce Credit Card Declines and Easily Recoup EFT Revenue
If you own or operate a tanning salon, you understand that most of your revenue comes from 50-65% recurring members. However, what happens when your payments fail when your draft runs, and how do you reduce declines and collect more EFTs?
For example, imagine you are a salon owner with 100 customers who regularly bill $75 per month. Your business runs and plans based on $7500 per month coming in the door regularly. It took a long time and a lot of work to get to where your business generates that amount of reliable, predictable income. You pay salaries, rent, handle customer service, and manage marketing campaigns ALL around that recurring revenue.
Now imagine that 15% of that revenue, or $1,125 per month, goes uncollected — and not because your clients don’t want to pay you.
What’s the problem?
Credit card decline rates are increasingly becoming a massive challenge for subscription/recurring tanning salons from fraud, reissued cards, EMV (chipped) cards, and lost or stolen cards all contribute to declines in regular payments.
Most tanning salons will spend hours running charges manually or following up on failed payments and manually tracking which members are overdue. If a payment fails, this can ultimately give members a reason to cancel or have an unexpected interruption in service.
Here are the statistics:
- On average, 13-15% of recurring credit card payments are declined (with some industries exceeding 30% decline rates)
- 30% of all credit cards are reissued each year
Start reducing payment declines and recoup failed EFT payments with Tan-Link Software.
“Data shows that a staggering 40-60% of declined payments on average are automatically collected and billing updated through Tan-Link with no interaction required on your part at all.
So if your decline rate is 20%, the combination of card updater, backup billing, and automated collection can drop your effective decline rate to about 6-8%. That means you could be collecting up to 14% more money on each draft that probably remains uncollected, not to mention the poor experience of manual collection for the customer and staff alike.“
If you are a salon owner who wants to collect more EFTs, increase customer retention, improve efficiency, and increase cash flow, then look no further! Tan-Link is built for tanning salons to automate and streamline operations, but most importantly, the ability to efficiently run automatic recurring payments with automated collection processes in place.
Here are a few strategies for your tanning salon can quickly implement withing Tan-Link to recover failed payments automatically:
- Use Credit Card Updater programs from MasterCard and Visa, which allow for the automated updating of expired and reissued cards.
- Automated failed payment text to reach out to members whose payment declined and will enable them to pay directly on their phone and update billing information.
- Strategically rerun drafts with declined cards due to soft decline codes such as insufficient funds.
- Store primary and secondary billing information on members’ profiles.
- Consider adding an ACH payment processing — which can significantly reduce decline rates.
Want to collect more revenue by quickly recovering failed payments and reduce payment declines at your tanning salon?
Try the strategies we have listed above to automate and streamline your salon to start growing your business.