Execute sales transactions

Sales transactions include:

• Cash or check• Debit card sales• Credit card sales• Layaway sales • On approval sale • Cash-on-delivery (COD)• PayPal

Cash Or Sales Check Cash is the simplest type of sales transaction.

When a customer writes a check, the salesperson has to verify identity, usually by asking to see picture identification.

A Sales Check is a written record of a sales transaction that includes the date of the transaction, items purchased, purchase price, sales tax, and total amount due.

Debit Card Sales•Customer can choose to pay for purchases

using their debit card.•Customers key in a personal identification

number (PIN) on the merchants keypad.•The terminal dials the customer’s bank to

check the availability of funds.•The customer does not sign a sales receipt.•Funds are immediately withdrawn from the

customer’s bank account.

Advantages of debit card payments include:

•Convenient to customers who cannot get approved for credit cards or do not wish to use credit cards.

•Perfect for customers who do not carry large amounts of cash or a checkbook.

•Merchants prefer debit payments because they can access the funds immediately.

Credit Card Sales

•Businesses that accept credit cards can increase sales by as much as 40%.

•It has been proven that customers spend more when they are able to “charge it”.

•Most businesses accept Visa, MasterCard, American Express, and Discover.

•Credit cards are often used for Internet purchases.

Credit Card Sales• In order for a business to accept credit cards, they

must pay the issuing credit card company a transaction fee for processing the transaction.▫ For example, most credit card companies charge

merchants between 1.79% and 3.25% for each transaction.

• To eliminate fraud, retail stores may set a floor limit, the maximum amount that may be charged by a customer. This helps to protect the business from loses incurred from stolen or fake credit cards.▫ For example, Bill’s Electronics only allows customers to

charge $1,500 in merchandise without approval from the credit card company.

Layaway Sales•Merchandise is removed

from stock and held until the customer pays for it. The customer pays an initial deposit and makes payments over a certain period of time.

On Approval Sale• An agreement that allows the customer to

take the merchandise home, for further consideration.

• This special arrangement is extended to regular customers.

• Credit information is often obtained in the event the customer does not return the item.

Cash-on-delivery (COD)• A customer pays for the merchandise upon

delivery.• CODs are not as efficient as other types of

transactions.• Customer may not be at home at the time of

delivery, and there is the greater chance to commit fraud.

PayPal• An eBay company: allows merchants and

individuals to accept payments on line.

▫ Advantages Cheap and easy to use. Account setup is

complete in minutes. Helps to prevent identity theft. Money can be sent to anyone with an email

address in 55 countries. Merchants can handle credit cards, bank

transfers, and debit cards with transaction fees from 1.9% - 2.9% + $.30.

PayPal•Disadvantages

▫Customers may not want to leave personal information with a company they are unfamiliar with.

▫Customers need to leave your website to complete transactions. This may be viewed as confusing and unprofessional.

▫Unable to handle shipping charges and handle returns.

▫A complaint against PayPal becomes a complaint against you personally

Completing Sales Checks

•Multiply the unit price times the quantity purchased

•Add the totals together to determine the subtotal

•Calculate sales tax•Calculate shipping charges if applicable•Add the subtotal, tax, and shipping

charges to arrive at the total purchase price

How much do I owe?• Multiply unit price times the quantity purchased.• Add the totals together to determine the

subtotal.• Calculate sales tax.• Calculate shipping charges if applicable.• Add the subtotal, tax and shipping charges.

Item Qty. PriceExtensionSocks2 $2.99$5.98T-shirt 1 $7.99$7.99

Subtotal: $ 13.97Tax $1.05 Shipping $2.00TOTAL $17.02

How much does the retailer owe?Debit sales - Merchants are charged a nominal fee

regardless of the amount purchased.For example: Ce’Mour’s Hair Studio processed 32

debit card transactions ranging from $30 to $125. The bank charges $.59 per transaction. Ce’Mour’s was charged $18.88 ($.59 x 32)

Credit sales - Fees charged are based on a sliding scale dependent upon the processing agent and the amount being processed.

For example: Paynet Systems charges retail clients 1.74% + $.24 per transaction, Internet/Mail-Phone order clients 2.30% + $.25 per transaction, and a $10 monthly service charge with no monthly minimum requirement