You’ve just spent 45 minutes helping a new customer pick the perfect gift for his special someone. But when you go to process the purchase, the consumer finance application is denied – and you’re stuck with a lost sale. You wonder, “Why do so many applications like this get declined?” The customer is local, has a steady job, and seems stable. Why? The answer may surprise you because it comes from the pages of history.
It has been 10 years since the financial crisis of 2008. It was the worst financial setback since the Great Depression. For many of those who were impacted with the loss of jobs, businesses, homes, etc., the financial setback that occurred then still plagues them today. Derogatory credit has a reporting timeline of 7-10 years depending on whether it’s a late payment to bankruptcy.
While we might understand our credit, some merchants aren’t as familiar with FICO scores and how they place consumers into credit tiers. The tiers are tied to one’s FICO score, which is so-named because of the name of the data analytics company that originally came up with it: Fair, Isaac & Company. The FICO score determines your creditworthiness, and its factors are generally tied to credit lines open, balances, repayment frequency, derogatory reporting, etc.
A consumer’s lending history will generally place them into one of the below tiers.
Most retailers have a consumer finance contract with one lender that will lend to “Primary” borrowers. However, the problem can be that many of those customers who apply for consumer finance accounts fall outside of the Prime lending tiers. Prime borrowers typically have the financial means to pay whether they use cash or high-value affinity credit cards with sufficient credit limits. They oftentimes prefer to use such cards for the mileage, vacation points, cashback rewards they offer.
When I hear that majority of consumer finance applications are declined, it tells me that the customers’ credit ratings align them to the near-prime (sub-prime) or no credit history tiers. As a result, it becomes critical to have a credit initiation platform that supports the tiers and provides immediate decisions. For example, within the automotive industry, dealerships for over three decades could offer financing to customers in all of the credit tiers discussed. It has helped dealers convert the sales and deliver cars within a single visit by the customer.
To help jewelers be able to offer consumer financing for customers whether they are Prime, Sub-Prime or No Credit history, 1 Step Technologies in conjunction with Versatile has implemented Credit Cascade. It’s a consumer finance application system, accessed by either web browser or one of our mobile device solutions. The consumer’s information is securely taken with the credit amount requested, and within Credit Cascade, we have lenders in all three tiers. Once the application is submitted electronically, it routes to our tier 1 lenders in seconds. If approved, you have an instant sale. If declined, the application routes to tier 2 and then tier 3, if necessary. If approved at any level, the lender provides details including the account number for the newly-approved consumer account. At that point, the jeweler can complete the sale process by charging the purchase to the new consumer account.
The benefits of Credit Cascade to jewelers is significant.
- Application has taken in a secured environment separate from the jeweler’s store environment
- Does not touch any other software systems
- Application is simple and quick to complete
- Credit decisions in seconds
- Immediate account number generated upon approval
- The credit limit can increase sale amount by the customer
- Can charge sale to account number
- Sale is completed
Jewelers who are interested in enrolling can simply click on the following link: https://fs22.formsite.com/klawrenceversatilecom/1steptech/index.html
During the JCK Week, we will be showcasing the complete suite of 1 Step Technologies’ payment acceptance products including Credit Cascade. Please reach out to Ann Glynn -firstname.lastname@example.org for further details.
About 1 Step Technologies – www.1steptech.com, we are a proud member of JHJ and appreciate the recommendations we have received from the community. The number of whom are our clients today. 1 Step Technologies is a payment acceptance solutions provider who specializes in retail and wholesale jewelers. We are integrated into multiple jewelry software management systems and offer what is called an Omni-Channel payments acceptance environment, see below. The Omni-Channel solution offers all the below tied to one merchant account for a jeweler.
- 1 Step Tech – Omni-Channel:
- CounterPoint of Purchase
- Mobile – in-store or outside – iOS and Android devices supported
- Websites – E-commerce is fully enabled
- Layaways or In-Store Financing – recurring payments capability
- Back office – managed to a bill (wholesale)
- Consumer Finance – as explained above
- ACH payments capability
Turn the declines into approvals. More approvals equate to more sales. Streamline your jewelry store, reach out to us. We understand the business and can help. Look forward to seeing many of you in Las Vegas.
Joe Radest started his career in card payments over 2 decades ago, working for the industry giant First Data. Since FDC, Joe has worked with other notable processors – TSYS, Global Payments, and Chase Paymentech. Over 7 years ago, Joe branched out on his own, providing complete payment acceptance technology solutions, affording business clients the ability to securely transact payments without having sensitive data touching their environment. In addition to 1 Step Technologies (www.1steptech.com), Joe is an equity partner in two other payments companies – Payix Holdings and Fortress Payments Technologies and serves on two boards. He lives in Atlanta with his family. He can be reached by phone at 770-731-0414 or by email at email@example.com.