Phone Cards: One Answer To Ringing Up Add-On Sales

Say you're a small VAR with six employees. You're doing more than $2 million a year in sales selling point of sale (POS) terminals. You would love to land a mid-sized, growing, retail chain store account – preferrably one with 60 or more stores, with additional stores opening every year. How do you do that?

If you are CRSI, you do two things – concentrate on vertical markets and work closely with your vendor. To make the account pay off even more, you add a new twist to your POS installations – prepaid phone cards.

CRSI (Cash Register Staging and Implementation), based in Collinsville, IL, is a division of ARS PC-POS Solutions. The company grossed more than $2 million in sales for 1999. ARS PC-POS began in 1996 as a POS ribbons and supplies business. CRSI, as the name implies, is the company division that installs, services, and supports POS hardware and software.

CRSI President Mary Lou Berry and her husband, Daniel, technical service manager, concentrate on selling to the retail, grocery, and fast food markets. A partnership with POS terminal manufacturer Datasym (Brantford, Ontario) led to CRSI's installations at more than 60 Odd-Job Trading stores throughout CT, NJ, NY, and PA.

The Odd-Job Trading stores specialize in closeouts, offering discounted merchandise that has been overproduced, overstocked, or discontinued. The stores sell everything from housewares and beauty aids to food and electronics. Odd-Job Trading is owned and operated by Mazel Stores, Inc. (Solon, OH), which reported 1999 sales of more than $237 million.

Call On A Familiar Company
"We value personal relationships when it comes to business," says Mary Lou Berry. "That is important to us. For example, we don't want our customers leaving messages in voice mail. When customers call us with problems, we want to offer an immediate response and a quick turnaround." Berry says she prefers to work closely with vendors, as well. A good working relationship with Datasym was instrumental when it came to CRSI and the Odd-Job Trading stores account.

"We did a large installation for the Salvation Army stores with CRSI and worked well with them," notes Brad Jarrett, national sales manager for Datasym. Jarrett sold the Odd-Job Trading stores on the Datasym terminals. CRSI supplied the training and support of the Datasym terminals. CRSI supplied Odd-Job Trading stores with Datasym 6000 terminals, DataTran payment processing terminals, and Metrologic scanners. While the Odd-Job Trading stores installations were fairly routine, CRSI's Berry says adding the prepaid phone card sales and multi-payment terminals made the account noteworthy. "The prepaid phone cards, similar to the magnetic stripe gift cards used in department stores, became popular during the 1996 Olympic games in Atlanta," says Berry.

Tap Into A Growing Market
The market for prepaid phone cards is growing. According to an industry profile on www.wallstreetnewscast.com, more than 500 companies are selling over 300 million phone cards. By 2003, the prepaid phone card market will be a $10 billion business. Forecasters predict that more than 652 million prepaid cards will be sold in that same year. So, how do VARs capitalize on this booming market? "Sell your customers on the value and ease of adding the prepaid phone cards to their existing business," advises Berry. Because the cards can be personalized with a company's logo and message, they double as an advertising medium. "The Olympic phone cards became collectors' items," adds Berry.

Selling the prepaid phone cards to the Odd-Job Trading stores benefited both the Odd-Job Trading stores and CRSI. "The stores have projected more than $1 million worth of phone cards will be sold through the end of 1999," says Berry, noting that the Odd-Job Trading stores purchase the actual cards from another third party. "The cards are sold and then activated by the stores using a DataTran terminal from Datacap Systems (Chalfont, PA). Cards are typically sold in $10 or $20 denominations. Cards that are either not used, or under used, mean profit to the stores."

CRSI expects to capitalize on prepaid card sales in two ways. It can sell the prepaid card idea to customers purchasing the payment terminal. Or, CRSI can sell the card idea to its customers already using the payment terminal. "Our business has grown roughly 20% to 30% since we started selling payment terminals," says Berry.

No Hang Ups With Payment Processing
The payment processing terminal is key to integrating the POS system and the phone card applications. "The Odd-Job Trading stores want to accept as many forms of payment as possible," says Datasym's Jarrett. "The payment forms include cash, checks, and debit and credit cards. To accept credit cards, retailers must work with various processing companies. Theoretically, each processor could require stores to use a stand-alone processing terminal at each POS station. The DataTran device simplifies that process."

Each store requires only one DataTran device, regardless of how many lanes the store operates. Datasym's software interfaces with the DataTran device. The DataTran device, in turn, communicates with the various payment processors. "Payment transactions using credit or debit cards can be completed in seconds," notes Jarrett. "The DataTran device is also used to activate the prepaid phone cards, activating them with a specified dollar amount." Datacap Systems customized the DataTran devices, enabling the system to accept phone cards.

CRSI's Berry says the sale of phone cards and payment processing terminals in the Odd-Job Trading stores installation can be duplicated in other markets. "Golf courses can sell smart cards or magnetic stripe cards in their pro shops pre-loaded with payment for greens fees, for example," says Berry. "Convenience stores, grocery stores, and even restaurants can sell prepaid phone or merchandise cards and use them as advertisements."

Now that you know how prepaid cards can benefit your customers, isn't time you gave them a call?

Questions about this article? E-mail the author at lisak@corrypub.com.