Operations and Management: Small Catalogers, Big-Time Speed

Catalogers that receive tens or hundreds of thousands of orders a day, such as Lands’ End and L.L. Bean, have long had a dedicated Internet connection to their banks for the processing of credit-card orders. But catalogers processing fewer than 10,000 orders a day generally found it unfeasible to shell out $1,000 or more a month for a direct connection to their bank. Instead, they’ve had to use slower, less reliable dial-up modems.

But several payment-processing companies and software system providers, including Salem, NH-based Paymentech and New York-based Plug & Pay, are making it easier and less expensive for even smaller companies to have speedy, direct connections for prcoessing credit-card orders.

Virginia Beach, VA-based cataloger Tape Resources, which sells recording media for camcorders, DVDs, and CDs, has been running Authorize.Net on Totowa, NJ-based Dydacomp’s Mail Order Manager catalog management system for more than a year now. Users have access to a dedicated cable-modem line to their credit-card processors. To keep the Authorize.net line open, catalogers pay $25-$100 a month and an additional $0.05-$0.10 per transaction. To use the service and take advantage of its benefits, catalogers must have a broadband connection, such as DSL or a T-1 line. Catalogers need not have cable Internet access.

The service has made a huge difference for some mailers. “The dial-up service used to take forever,” says Frank Tabino, owner of Coral Springs, FL-based Nutritional Solutions, which mails a 56-page catalog of supplements and vitamins. The worst, Tabino says, was when you’d lose the dial-up connection during a batch load of credit-card orders, “and you’d have to go back and verify which orders were accepted and which got rejected. It just created additional work.” Nutritional Solutions began using Authorize.net in 2002, and verifications now take about 20 seconds each. Authorize.net costs the cataloger about $12 a week.

Authorize.net also has an address verification service (AVS) feature, which verifies the bill-to address fields. This can help users avoid the penalty fees typically levied on merchants who submit incorrect or imcomplete bill-to information. AVS can also minimize credit-card fraud — an important consideration for Tape Resources, says Jeanette Freeman, senior vice president of administration and accounting, now that the cataloger has started selling costlier products, such as $2,000 CD and DVD duplicators.

Savannah, GA-based confections cataloger River Street Sweets appreciates the speed of Authorize.Net, especially during the fourth quarter when its volume increases from a few hundred orders a week to several thousand orders a day, says owner Jennifer Strickland. With the dedicated cable line, the cataloger can process thousands of card transactions a day, which prevents fulfillment delays.

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