Merchant Accounts for Magazine Subscription Companies

Americans spend in the billions of dollars each and every year on magazines; whether they are bought off the shelf or have a running annual subscription, the periodical industry is definitely one that is not seeing any slow down due to current economic conditions. Perhaps it is easier and cheaper to dream than it is to buy or actually do. In any case, our homes and offices are stocked full of magazines and newspapers and a lot of them don’t even get read. One of the main reasons why people have so many magazines laying around is because the publishers make it so very easy and inexpensive to maintain an annual subscription. If you’ve ever thumbed through one, there’s no denying that they’re littered with inserts for the sole purpose of the reader to obtain a subscription. This isn’t bad at all; in fact most magazine subscribers can save as much as 85% off the cover price. The process is simple and almost perfected over years of tested and monitored progress. Person X sends in an insert, the publisher’s agent sends back a bill and sometimes the first issue with a bill, person X either sends back a check (which is becoming less common these days due to identity theft) or credit Card information for processing and presto, an annual subscription is born. That’s the easy part. Today, first time subscribers are ending their subscriptions to even their favorite magazines after the first year’s subscription has ended; however, the same customers continue to purchase those same magazines locally, at the store at full cover price. Why and how does this happen? There are a lot of opinions and publishers have definitely done their homework, but the bottom line is they know, but will probably not let us all know their secret to get subscriptions back up.

A popular way that has been tried in the past with some success is by means of telemarketing; meaning publishers or publisher’s agents will contract telemarketing companies to call current subscribers to renew their subscriptions over the telephone. This has been proven to be effective and will probably be done for some time. Though the telemarketing world has a dark cloud over it, magazine subscription renewal is accepted and in many cases a win win for both parties. Due to the nature of the telemarketing industry, the ability to process customer credit cards has been limited and definitely an uphill battle. It’s no secret that telemarketing is considered to be at or near the top of the list of industries that banks will take a risk on. Unfortunately for the publications industry, them and their telemarketing counterparts are taking a hit in the profit margin, and it all hinges on credit card processing. As banks don’t like to be hassled with magazine renewals through telemarketing companies, they do anyways, but attach extremely high rates and usually require a security deposit or end up holding a bit back for impending chargebacks. This isn’t going to change and will not get better, but may get worse as time passes. An alternative to processing domestically is going off shore through an international bank. Through most transactions are domestic, this is perfectly legal and offers benefits to the companies. Most international banks offer lower rates and some will even waive a security deposit. Many understand the chargeback process due to years of experience and know how to handle them effectively so that the issues are resolved for the customer and merchant in a timely manner. They also offer beneficial services like third party fraud scrubbing and virtual terminals for easy and safe processing. Daily batching is done much the same way, and payments can be just as quick as dealing with a domestic bank. Merchant service providers have a lot of experience with these banks, as they source from a number of banks. This can be the key to secure and reliable processing for years because merchant service providers can match banks with certain industries. If you would like more information on this, contact your merchant service provider or processor.

Jennifer Loganathan is the President and CEO of Stradafee Limited. Stradafee is a leading international payments company based in New York. Stradafee is a retail and ecommerce payment processing provider specializing in international and Internet merchant account solutions. Stradafee also offers check processing, high risk merchant accounts and offshore merchant account options. Stradafee can help businesses of all industries and sizes. For more information on credit card processing and check processing please visit www.stradafee.com.