There are a number of ways customers could pay for goods in your retail business. Some of the most common options you may offer are:
- Cash – cash remains one of the most popular forms of payment in retail. It is most commonly used for low-value day-to-day transactions.
- Debit or credit card – offering card payments is convenient for customers and they will expect to be able to pay this way. You will need to have equipment and systems in place to take card payments.
Less common forms of payment include:
- Cheques – with the rise of card payment technology, which is faster and more secure and convenient, cheques are being used less frequently in retail.
- Bank transfer – direct bank transfers (also known as electronic funds transfers) such as Bacs, Faster Payments and CHAPS can be used for retail transactions over the phone or online. They are less secure than card payments, and used less frequently.
Other potential forms of payment include pre-paid cards, traveller cheques, mobile money, loyalty points and vouchers.
Some retail businesses choose to offer credit to their customers. This allows customers to purchase goods and pay for them at a later date. This may take the form of:
- store credit cards
- hire purchase and other kinds of leasing
- shopping accounts (buy now, pay off later in instalments)
If you do decide to offer consumer credit, there are a number of rules you must follow. You must provide certain information about credit agreements and carry out credit checks.
Choose the right payment options
When deciding which types of payment your business will accept, you should strike a balance between:
- what is convenient for your customers
- what is cost effective and manageable for your business
For example, if you run a market stall, you may choose to accept cash only. Grocery shops may wish to offer customers the convenience of card payments. If you sell high-value items such as white goods or computer equipment, you might choose to offer some form of credit.