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5.04 Execute Sales Transactions

5.04 Execute Sales Transactions. Sales transactions include:. Cash or sales check Debit card sales Credit card sales Layaway sales On approval sale Cash-on-delivery (COD) PayPal. Cash or Sales Check. The simplest type of sales transaction.

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5.04 Execute Sales Transactions

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  1. 5.04 Execute Sales Transactions

  2. Sales transactions include: • Cash or sales check • Debit card sales • Credit card sales • Layaway sales • On approval sale • Cash-on-delivery (COD) • PayPal

  3. Cash or Sales Check • The simplest type of sales transaction. • When a customer writes a check, the salesperson has to verity identity. • Sales check: a written record of a sales transaction that includes the date of the transaction, items purchased, purchase price, sales tax, and total amount due.

  4. 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.

  5. …..continued • 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 • Funds are immediately withdrawn from the customer’s bank account.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.

  6. 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.

  7. …..continued • Credit cards are often used for Internet purchases. • 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.

  8. …..continued • 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.

  9. 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.

  10. On Approval Sale • 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.

  11. COD • 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.

  12. PayPal • PayPal, an eBay company: allows merchants and individuals to accept payments on line.

  13. PayPal 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.

  14. 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.

  15. Sales Check: How much do I owe? • Multiply the unit price times the quantity purchased. For example, Melanie purchased four pairs of socks at $5 each. $5 x 4 = $20. She also purchased two pairs of pants at $26.50 each. $26.50 x 2 = $53.

  16. …..continued • Add the totals together to determine the subtotal. For example, $53 + $20 = $73. • Calculate sales tax. For example: $73 x 7.5% (or .075) = $5.475 or $5.48. • Calculate shipping charges if applicable. For example, shipping on items between $0 – $99 is $3.50

  17. …..continued • Add the subtotal, tax, and shipping charges to arrive at the total purchase price. For example, $73 + $5.48 + $3.50 = $81.98

  18. Debit Sales: How much does the retailer owe? • 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)

  19. 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.

  20. The End Edited by the: Patteson & Porter Team

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