STORES Magazine - September 2008 - (Page 47)

cation on how to run the system and have those employees tied up imaging checks rather than selling merchandise. With the SPIN system, retailers pay a transaction fee. Norstrand declines to reveal the exact cost, but says it is easily made up in the fee and funds-availability savings. “Retailers should be able to save between 50 percent and 70 percent of the cost of handling paper checks when you combine the funds-availability benefits with the lower fees,” he says. Walgreen estimated that it could save $3 million in bank fees annually using this approach, according to Michelle Vandiver, the company’s manager of bank reconciliation. Funds availability, speed of returns Funds availability is another big advantage. With SPIN, retailers get funds the next morning. “Sometimes it is two to four days later before we get the paper checks, but they’ve already got their money,” Norstrand says. With paper checks, retailers typically don’t receive the funds for several days. Another advantage of BOC is that retailers get notified about bad checks an average of five days earlier than with paper checks, which increases their chances of collecting the related funds. “Some retailers have justified BOC solely on the speed of returns,” Norstrand says. “It helps them stop fraud.” And even on checks from good cusWWW.STORES.ORG tomers who are simply overdrawn, the sooner the check can be represented, the more likely (and sooner) it is that the retailer will collect the funds. Solutran continues to offer traditional BOC, but mostly to smaller specialty retailers. “Where you have a more controlled environment and checks are consolidated in one place, traditional BOC works great,” Norstrand says. “But for retailers with a lot of outlets, SPIN is a better alternative.” For those retailers, setting up a traditional BOC solution is not as easy as it sounds. “Not all PCs are the same, and some retailers have had trouble integrating the scanners into their existing backoffice operations,” Norstrand says. This can require overriding firewalls, which retailers don’t like to do. No capital expenditures Walgreen expects to roll out SPIN to all 6,200 stores within six months; it began with 1,200 stores in April, and is scheduled to be completed at the end of this month. “We experienced substantial cost savings already with no capital expenditures and minimal impact to our stores,” Vandiver says. Walgreen considered a point-of-purchase solution in which paper checks were converted to electronic images at POS and the check handed back to the customer. It opted against this approach, however, because the chain did not want to make changes to any existing POS equipment or to the current checkout procedure – especially, Vandiver says, if those changes might potentially increase the amount of time required to check out customers. Solutran is targeting SPIN to the 200 largest U.S. retailers (Kohl’s recently announced it will use the service). “SPIN fits a broad spectrum of retailer types,” Norstrand says, “but it works best with large merchants that have a big check problem to solve and those that have armored carriers that can be used to ship StORES the checks to us.” Lauri Giesen is a Libertyville, Ill.based business writer with extensive experience in covering payment and finance issues. STORES / SEPTEMBER 2008 47 http://WWW.STORES.ORG

Table of Contents Feed for the Digital Edition of STORES Magazine - September 2008

STORES Magazine - September 2008 Contents Executive Editor's Page President's Page Office Depot Unveils First Green Store Dunkin’ Donuts Debuts DDSMART What Shoppers Think 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Are You a Facebook Fan? RFID Concept2Watch E-commerce Supply Chain Marketing ERP Credit Web Optimization LP Vantage Point Newsbeat Cover Story LP Program Building Biometrics Industry Perspective Customer Service Site Selection E-Commerce LOEB Retail Letter Arts Update Point of View NRF News Retail Crossword Retail Industry Calendar Last Laugh

STORES Magazine - September 2008

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