Deluxe Acquires Payments Processor Celero Commerce in $625M Deal

A 110-year-old check printer is betting big on the future of digital payments with a multi-million dollar investment. Deluxe Corporation has planned a $625 million all-cash acquisition of Nashville payments processor Celero Commerce, as of June 18, 2026. Deluxe famously mailed physical checkbooks to half of the postal addresses in the United States. Now, Deluxe wants to help small and medium-sized businesses move money.

As Deluxe acquires Celero Commerce, it speaks volumes about the state of the merchant acquiring business and suggests Deluxe has prioritized the payments processing business. Deluxe is also a key player in the ongoing consolidation of merchant acquirers in an environment that has experienced unprecedented coupling and reshuffling in payments processing.

For the small business owner, this is not an abstract story from the world of finance. Deluxe acquiring a payment processing business means that the processing company in the small business owner’s local market may acquire a different name, different business model, and a different customer support system.

This report explains what Deluxe acquired, why the check company is making big moves in the payment space, and what the continued wave of acquisitions means to the small businesses that will be most affected.

Figure 1. The Deluxe–Celero deal at a glance: a $625 million all-cash purchase that pushes the combined firm into the top ten U.S. non-bank merchant acquirers.

Deluxe Acquires Celero Commerce: Why a Check Company Is Going All-In on Payments

The all-cash purchase price is $625 million. Deluxe is purchasing a $375 million incremental term loan and a draw from its revolving credit facility. They announced the agreement on June 18, 2026, and anticipate closing the purchase in the 3rd quarter. Deluxe has plans to buy scale to a business they have been slowly growing for several years.

For most of Deluxe’s history, the company made money from checks, forms, and various paper supplies that financed their operations. Deluxe has been gradually changing its focus to payments and data. The Celero acquisition is their most significant commitment to that focus. After the acquisition, payments and data will comprise 57 percent of Deluxe’s 2026 projected revenue. In 2020, payments and data comprised 31 percent of Deluxe’s revenue. Deluxe is a payments company now.

Figure 2. Deluxe’s revenue mix has flipped toward payments and data, projected to reach 57 percent in 2026 after the Celero deal, up from 31 percent in 2020.

Deluxe Corporation

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Deluxe was founded in 1915 and is one of the oldest business services companies in America. Deluxe gave us the paper check and printed checkbooks for banks and consumers. Though check printing provided steady cash flow, this business model was headed for permanent decline. Under Barry McCarthy, Deluxe repositioned the company with an emphasis on merchant services, data, and digital payments. The Celero acquisition is evidence of this strategy. McCarthy said the acquisition was a good way to quickly change the company’s focus and the money they make to the payments and data services that Deluxe offers. From this acquisition, it is clear that Deluxe is all in in this line of services.

Celero Commerce

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Celero was founded in 2018 as the fast, newer half of the partnership. They are based in Nashville and provide integrated payment processing and business management software and services with data services to small and mid-sized businesses. Celero has about 55,000 business customers and processes about $28 billion in payments a year. In 2025, Celero reported revenues of $200 million at a healthy 28 percent adjusted EBITDA margin.

Celero services businesses through 375 active partners, including banks and vendors of business software, and added about 60 partners in 2025. Founder Kevin Jones said this combination is “an exciting next chapter” for Celero, as it will allow them to further pursue their mission through Deluxe’s resources and extensive reach.

These two companies combined become a large entity. In 2025, the two companies combined processed about $70 billion in gross transaction volume. This volume allows the combined partnership to be classified as one of the top 10 non-bank merchant acquirers in the USA. Deluxe also stated that this deal should positively affect adjusted earnings per share within the year and provide over $15 million in cost synergies over the next 24 months. For a company still transitioning out of its paper-focused past, this deal provides justifiable numbers for the expected cost.

The Consolidation Wave Reshaping Merchant Acquiring

Deluxe’s decision stems from a larger context. Merchant acquiring is a consolidating industry, and Deluxe’s acquisition of Celero represents a smaller undertaking in a larger massive undertaking. The industry has been filled primarily with smaller to medium processors. Within the context of industry consolidation, that crowd is rapidly disappearing.

The largest example dwarfs the Deluxe deal. In January 2026, Global Payments acquired Worldpay for $24.25 billion, one of the largest deals in the history of the payments industry. In the same three-party deal, FIS acquired the Global Payments issuer solutions business. The reconfiguration of the payments processors has been characterized as a simplification of portfolio offerings and a pivot towards software-centric merchant services. Relatively, the Deluxe-Celero acquisition reflects the same trend.

Figure 3. Recent deals show the scale of merchant acquiring consolidation, from Global Payments’ $24.25 billion Worldpay purchase down to mid-market moves like Deluxe–Celero.

The driving forces behind the wave are easy to see. Payments is an industry of tight margins and high tech costs, so the business is all about scale. The bigger processor shares the burden of compliance and fraud and platform investments among a greater number of customers. The point of sale and invoicing software is where the processors have control of the customer relationship, and that is really the game. And private equity keeps financing the wave; the Worldpay sale was one of the largest deals in the history of its private equity owner, GTCR. The processors are getting larger, and there are fewer independent names in the game. For the small merchant, the shock is when processors in the merchant’s ecosystem get acquired, and there are fewer familiar names left.

What Happens to Small Merchants When Their Processor Is Acquired

For most owners, the practical question cuts through all the deal math: what happens to my account when my processor gets bought? The honest answer is usually very little, at least in the short term. Card payments continue to clear, deposits continue to show up, and the terminal on the counter continues to work. Acquirers pay a great deal of money to purchase a merchant portfolio because they want to keep the merchants. Disruption is bad for business for both sides.

The changes, however, are more likely to show up later and more quietly. After a deal goes through, merchants may notice the company on their statements is different, the support phone number is different, and/or they are moved to a different terminal or platform. Pricing is likely to change, and in some cases, the acquirer may improve pricing as they absorb the account. In some cases, pricing may get worse, and a new fee may appear after the introductory offer is over. Most contracts are transferred as is, so any early termination provisions and long commitments are transferred to the new owner.

The real risk is more likely to be a slow decline in service rather than outright chaos. The promised rates may not survive the transition, and the account manager may also disappear and be replaced by a general support queue. A well-run acquisition is also likely to have a positive outcome for the merchant, so none of these changes is guaranteed.

Keep an eye on changes in ownership. Read the statements that follow a sale carefully and verify that the contract you signed is still valid. A processor changing ownership is a good reason to check if the contract is still valid.

The Decline of Checks and the B2B Shift to Digital Payments

Deluxe’s decision to spend $625 million to remove itself from its past makes sense only when you consider the death spiral of the paper check. The decline is no longer slow and steady. It’s practically vertical. Only 2.5 percent of all consumer payment transactions in the United States are settled by a paper check. The payment method that was once the primary means by which Americans settled their bills and conducted their financial transactions has all but disappeared.

The decline of the paper check can be documented by what can be described as the slow death of the transactional paper check in the business world. The paper check held on far longer in the business world as a means of sending payments. A recent study observed that in 2004, 81 percent of outgoing business transactions were conducted by a paper check. By 2025, that number fell to 26 percent. Incoming payments will follow a similar trend, decreasing from 75 percent to 25 percent of total business transactions. Even the government has implemented measures to increase the shift away from paper checks to electronic transactions.

Figure 4. B2B check use has collapsed since 2004, with both outgoing and incoming payments falling by roughly 50 percentage points as businesses move to digital rails.

Digital rails didn’t make money disappear, and checks are becoming digital. In the same time frame, payments made through the ACH network more than doubled, going from 2.9 billion to 7.4 billion, and the dollar amount practically doubled, going from $28.3 trillion to $58.2 trillion. There are a few reasons why businesses are going paperless. Digital payments are cheaper, more secure, and more convenient. This is bad news for Deluxe, and the check business will continue to decline. The only way to grow now is to have part of the digital payments. Part of that is Celero.

Questions to Ask Before You Sign With Any Processor

There is a lesson hidden in the countless deals for merchants. In a marketplace dominated by constant mergers, what your prospective processor is sold for isn’t what you need to worry about. You want to ask what you can expect for today’s payment processing fee and what the deal’s long-term implications are. A little detail hunting will help you avoid a lot of future heartburn.

Instead of asking what the payment processing fee is, first ask for the total cost of acceptance. You can ask about the payment processing pricing model; is it interchange-plus, tiered, flat, or otherwise? In addition to the payment processing fee, what are the payment processing monthly minimums, statement fees, PCI compliance fees, gateway fees, and chargeback fees? In reality, what are the contract’s early termination and length provisions? Long contracts with large early termination fees will potentially be the long-term deal that will protect a bad relationship and get you stuck if the company is sold. What is the payment processing fund withdrawal and clearance policy? Is a rolling reserve held against your account?

Consolidation creates some urgent questions. Is your payment processing rate guaranteed, or is it an introductory rate? What is the advance notice when your pricing is changing? You need to ask what happens to your payment processing terms when the company is sold or if the company has the right to assign your contract without your consent. When a company is sold, who keeps your payment processing data and your customer data?

You should ask how support is structured. Do you get a direct support contact or do you just have access to a support line? How fast do they expect to solve your issues? These answers will help you determine if you are signing on with a stable partner or if you are just maintaining a contract for a rate that may not last the year.

Contract, Rate, and Service Red Flags to Watch in a Consolidating Market

There are warning signs in any market and signs in a consolidating market should make merchants even more cautious. The most obvious example is a contract with a hidden exit. If a contract has a multi-year term and a large early-termination fee, or an agreement that renews automatically each year, trapping you unless you physically remove it during an extremely brief time frame, then it is designed to make you pay for the slip even if you don’t use the service. In a market where anything can happen overnight, being locked in a contract is the opposite position you want to be in.

The main focuses of rate red flag concerns center around what is absent. Be very cautious of a quote that is significantly less than the market average. The difference is usually made up through fees that were not disclosed to you. The same can be said with tiered pricing that places transactions in large “non-qualified” buckets that are vague, teaser rates that are made to expire, and extremely curt statements that make you unable to figure out what you actually paid. These are all signs of a processor that is competing on obscurity. If a salesperson cannot straightforwardly explain your effective rate, that is a warning.

Service red flags are disclosed through a company’s lack of service even before an actual contract is signed. Vague answers about who your support is, the lack of an escalation path, the failure to put promises in writing, and pressure to sign quickly all show a lack of service. In markets full of mergers, even the stability of the provider is something to take into consideration.

A processor that is transparent with its support and terms is more likely to be a partner you can trust throughout any future ownership changes.

Why Service and Stability Matter as Much as Rate

Merchants know that rate is the most important factor when selecting a processor. But as the market consolidates, factors like service and stability are increasingly important as well. If you’re losing deposits because of a failed system migration, or if no one is working on your account and chargebacks are dragging on, a little savings on your rate means nothing. The cheap processor ends up being your most expensive choice because of lost sales and time.

Something like stability is hard to quantify but is important. A processor that has a good service record, consistent stability, and stable ownership is less likely to surprise you. In a consolidating market, a company that honors its terms, maintains its support, and communicates clearly regarding its changes and mergers is a valuable partner. Although stability is hard to quantify, it determines whether you have to solve payment issues every time you sell something.

The bottom line is to consider the value of the service, not just the rate. A good, fair, and transparent rate, stability, and value of service will always be a better deal than a rigid contract and a cheap call center. The Deluxe-Celero deal is a good example of how the name on your statement changes, but service and stability should be valued even then.

What to Watch Next in Processor M&A

The deal-making is not likely to slow down any time soon, but there are a few trends to keep an eye on. The first trend would be more of the same: the large processors acquiring software-led companies that have strong merchant relationships to acquire the customer. Expect the mid- market to be a busy place as larger companies acquire other companies to strengthen their market positions. This is also true for Celero. Larger companies are more likely to acquire companies to build their business as opposed to building their business from the ground up.

The true test of the consolidation will show how well the integrated companies are able to provide better technology and pricing for small to mid-sized businesses (SMBs). The elimination of competition will likely result in price increases, as is the case for other large mergers. After an acquisition, the price of any offered service may increase, and the service quality may improve. If it doesn’t, it’s likely the company is reneging on the promises that were made during the merger. Watch the continued shift from paper. For each check that is converted from a paper check to a digital payment, it gives legacy companies such as Deluxe a reason to forcefully acquire companies to keep up with the digital payment revolution.

Small to mid-sized businesses will benefit from remaining flexible and having the ability to adjust. Pay attention to contracts that allow you to move or change if there are new terms. After a change in ownership, always watch your statements. Concentration of market power will dictate which financial institution/processors will be providing merchant services to your business.

Conclusion

Deluxe spending $625 million buying Celero Commerce is a big deal. Deluxe is a company largely operating in the paper check space that is now diversifying and buying its way into digital payments. Check payments are in steep decline. This deal pushes payments and data to 57% of Deluxe revenues and makes the resulting company one of the top ten non-bank U.S. merchant acquirers. This deal is evidence of a legacy company choosing to reinvent itself over continuing its downward trajectory.

For small merchants, this deal is one small piece of a much bigger story. This is further evidence of consolidation in the acquirer marketplace, from the $24.25 billion Global Payments – Worldpay deal down to more mid-market deals such as this one. The first-order effects of a processing company being acquired are sometimes benign, but the second-order effects, such as new fees, new names, and service that is now much less customer-oriented, can be profound. The same defense is more important now than it was before. You must ask the hard questions much more than before, watch out for red flags for contracts and rates, and consider stability and the quality of your service well above the costs. A processor that was chosen for its transparency and reliability is one that you can trust to retain that reliability when ownership changes.

Frequently Asked Questions

What did Deluxe acquire and for how much?
In an agreement announced in June 2026, Deluxe has planned to buy payments processor Celero Commerce for $625 million in an all-cash transaction. This purchase is expected to close in Q3 2026.
What is a merchant acquirer?
A merchant acquirer is a company that processes card payments for businesses and transfers money from the customer’s account to the merchant’s account. It manages the behind-the-scenes work for every card payment a business accepts.
What happens to my account if my payment processor is bought?
Initially, only minor changes happen, and payments continue to go through as before. However, you should check your bank statements after every acquisition, as there may be a new company name, fee changes, or a platform migration.
How do I choose a payment processor?
Look beyond the headline rate and consider the total cost of acceptance. Review contract duration and penalties for early contract termination. Examine the quality of the service and the stability of the provider when placing your order, alongside or in preference to the price.
Are paper checks still used in business?
Yes, but it has decreased significantly. In 2004, B2B check payments made up approximately 80% of total business payments. By 2025, this number dropped to around 25% as businesses continue to make the transition to ACH and other digital payments.

Visa, Mastercard, and Coinbase Launch “Open USD” in 140-Business Stablecoin Consortium

Visa, Mastercard, and Coinbase have made a very public bet as they’ve joined over 140 other companies to launch Open USD, the latest venture to create a dollar-backed stablecoin for business payments, placing the card networks in the midst of a decade-long war with crypto. The news came out in July of 2026. The stablecoin is designed for all business owners and merges payments with the crypto space innovatively, and for the business owner watching from the sidelines, this means stablecoin payments have moved to the next phase. The infrastructure for stablecoin payments is now here.

This is a significant leap forward, and with participants like Visa, Mastercard, and major technology firms, this consortium is a who’s who of global finance and technology. The innovation is even enough to disturb the current market leaders. The announcement and implications will be discussed, as well as the reasons this venture still has significant drawbacks.

What Open Standard and Open USD Are, and Who’s Behind Them

There are two components to the launch. One is the organization, and the other is the coin to be issued. Knowing the split is important because without the split, the governance model would not make sense.

Open Standard

Open Standard is the independent organization responsible for the release and management of the new token. They aim for neutral governance. Instead of one company monopolizing the token and profiting from it, Open Standard is managed by a board of directors comprised of member partners. The goal, as stated, is to make decisions for the benefit of the collective rather than for individual token issuers. Zach Abrams is the founding CEO and also the CEO of Bridge, Stripe’s stablecoin subsidiary. This means Open Standard is directly related to one of the largest developers of digital payments.

The organization is attempting to create a particular perception of itself. They want to appear as a public utility service rather than a startup. They want people to think of them like the early stages of card networks, which were created as banking cooperatives. Open Standard is presenting the same ideology for the era of stablecoins.

Open USD

Open USD is OUSD for short. It aims for a value pegged to the US dollar. Designed to operate continuously, including weekends, OUSD aims to settle cross-border transactions with minimal delay. The coin is anticipated to go live in 2026, with the consortium and its rules being formally introduced in the summer of that year. Some reports claim that OUSD will be issued directly on the Tempo blockchain on its launch, which will be the first blockchain to support OUSD, unlike other general-purpose crypto networks.

Abrams stated his position on what OUSD brings to the market. Current stablecoins have their merits. However, to bring the technology to the mainstream and allow businesses to operate at scale with the technology, a token that is open and aligned with the businesses’ interests is needed.

The 140-Company Lineup

The project’s partner list gives it real value. In the payments space, we find Visa, Mastercard, American Express, and Discover, while in the banking and asset management space, we find BlackRock, BNY Mellon, Standard Chartered, U.S. Bank, BBVA, Huntington, and Citizens Bank, with BNY Mellon announced as the custody partner for the reserves. In the fintech and digital asset space, we find Stripe, Coinbase, Chime, Adyen, Ripple, Galaxy, Bybit, OKX, and MetaMask. Finally, we find Google, Shopify, and IBM in the technology space.

The combination of traditional finance, payments, and crypto in a single project is very uncommon and is the primary reason for the significant interest in the launch.

Figure 1: The Open USD consortium spans card networks, banks, fintech, crypto and technology.

What Is a Stablecoin? Plain English and Why the Dollar Peg Matters

Strip away the jargon and a stablecoin is a simple idea. It is a digital token that aims to keep a consistent value. The most common model is to the US dollar, where one token should equal one dollar. The only thing a stablecoin has to do is keep its value.

This is where stablecoins and Bitcoin diverge. The high volatility of Bitcoin prices makes it impractical for use as a standard to compare the value of goods and services, like a cup of coffee. Stablecoins, theoretically, do not have price volatility due to their reserves, where real dollars are held for each token in circulation. Therefore, if one stablecoin is sent, the recipient knows they are receiving one dollar and not a risk of losing value due to price fluctuations.

The peg is essential because payments cannot have volatility. When a payment is completed, the recipient knows the amount paid is the amount that was received, and if the price fluctuates, the payment system would be rendered useless. Therefore, the confidence in the reserves and the peg are the foundations of stablecoins. The peg is lost, and the reason for the token is lost. Therefore, the regulations regarding reserves described below are the most important feature.

Why the Networks Are Backing One Now: The GENIUS Act Context

Timing is certainly the most apparent issue here. Stablecoins have been around for some time, so why are Visa and Mastercard jumping into this space in 2026 and not 2021? The short answer is regulation.

The GENIUS Act

The GENIUS Act, or the Guiding and Establishing National Innovation for U.S. Stablecoins Act, was signed into law in the United States in July 2025. It provides the first federal framework for payment stablecoins. It provides guidelines for previously grey regulations. All payment stablecoins must hold reserves of one to one, with high-quality, liquid assets.

Stablecoin issuers must be chartered or licensed (either federally or by the states), and any bank wishing to issue a stablecoin must do so through a regulated subsidiary. There are monthly attestations, and the reserves must be certified by the Chief Executive and Chief Financial Officers. Stablecoin issuers must comply with anti-money laundering regulations, and issuers must not offer any interest or yields to the holders.

For large institutions, these regulations are a significant change. There is no longer a stablecoin compliance risk. Rather, there is a defined product that institutions and banks can build. With the new regulations, large payment institutions are now able to issue payment stablecoins.

Visa and Mastercard

Regarding the networks themselves, this is defense. Their business is moving money and collecting fees. If someone else uses a faster, cheaper settlement token that cuts across their rails, that is a risk to them. By building the Open USD, they get to design the product instead of watching from a distance. Mastercard’s approximately $1.8 billion acquisition of the stablecoin company BVNK showed the same impulse. “Speed used to be the main differentiator, but the focus has to be on reliability, governance and interoperability,” said Visa executive Jack Forestell. The incumbents want to control the standard now that the railroads are in place.

What “Fee-Free Mint and Redeem” and Shared Reserves Actually Mean

Two phrases in the announcement do the heavy lifting. Both phrases indirectly criticize the methods employed to profit by the current stablecoin market leaders. Minting refers to the process of creating new tokens by depositing dollars, while redeeming means the conversion of tokens back to dollars. Open USD claims it will allow businesses to perform both processes without any costs or limits. For businesses transferring a large amount of money, there is currently a fee for both processes. Thus, eliminating these fees is a marketing strategy targeting treasurers and payment businesses.

However, the biggest disruption in the announcement comes from the phrase Shared reserves. When a stablecoin issuer is in the market with billions of dollars in reserve, the funds remain in short-term instruments and the stablecoin issuer profits from the reserves. Open USD claims that after the management fee, the profits from the reserves will no longer be the issuer’s profits, but profits will be distributed to partners.

Circle

That design focuses on the incumbent’s vulnerable point. Circle, the creator of USDC, generates the majority of its business from exactly this reserve interest. A competitor returning that revenue to partners undermines the core business. The market took notice right away, as Circle stock plummeted on the first day of the announcement, in part due to major backers such as BlackRock and BNY supporting the new competitor. Ark Invest Analysts are less confident Circle will lose its position. They feel Circle has a lot of benefits in distribution that may be difficult for new competitors to achieve. Tether, the issuer of the largest dollar stablecoin, also holds the largest market share and will be difficult to remove from that position.

Figure 2: Tether and Circle dominate today’s stablecoin market. Open USD is the new challenger.

Where Stablecoins Could Touch Merchants First: Cross-Border and Settlement

When business owners encounter stablecoins, it won’t be when a customer pays in stablecoin at the point of sale. They’ll likely already have stablecoins in their business long before that. Historically, cross-border payments have been the first major business use case for stablecoins. The existing systems are slow and expensive.

Let’s consider a supplier. A traditional payment (e.g., a wire) will take several days and pass through several banks along the way, resulting in several fees. A dollar stablecoin can be sent across the world in a matter of minutes for minimal cost, at any time, with no intermediary banks. For a business that pays overseas vendors or receives international revenue, that system is a major operational improvement. This is the main use case for Open USD, and is why banks and payment processors are involved.

The second major use case is for settlement. If a business accepts a card payment, the money can take several days to be credited to their account. Stablecoin settlement can reduce that wait time to near-instant. Stripe has indicated that Open USD has the potential to become the default settlement token for the businesses on its platform.

This would allow stablecoin settlement to be implemented in the background for regular transactions, with the business not interacting with the token at all. Back-office settlement is most likely to be the first use case for stablecoins.

The Honest Caveat: Still Mostly Used for Trading, Not Payments Yet

Here is the part the press releases gloss over. Even with the wins in the stablecoins space, stablecoins are currently barely used for payments. There is a massive gap between promise and reality.

Research from the Federal Reserve Bank of Kansas City, published in late 2025, quantified stablecoins. With a total market cap of about 300 billion dollars, 48.8 percent of stablecoins were used for crypto trading, 29.3 percent were for transfers, and 21.2 percent were idle in wallets.

Only 0.7 percent were used for payments. That translates to less than 1 cent for every dollar of stablecoin activity that made a payment for goods or services. Monthly payment volume, although it has been growing, was in the range of low tens of billions of dollars, while the stablecoin market cap was in the hundreds of billions of dollars.

Figure 3: Payments remain under 1% of all stablecoin activity, despite the hype.

That number should set expectations. The infrastructure is coming, the law is enacted, and the biggest players are involved. However, user habits have not evolved. Currently, most stablecoins are traded within the confines of the crypto economy; they circulate between various exchanges and protocols and rarely leave the crypto economy to be used for settling payments.

Open USD is marketed as an improvement on stablecoins by the mainstream players. The issuance of Open USD is not proof of the change that is being anticipated. A headline should inform a merchant and not pressure them.

Questions to Ask Before Stablecoin Acceptance Is Relevant to You

What questions should business owners ask themselves to look at this without being sold on the hype? For faster and cheaper settlements to improve your cash flow, do you frequently move money across borders? How about your customers and suppliers? Do they prefer to transact this way?

Or is this a solution searching for a problem within your business? Is your existing payment processor going to support Open USD, and therefore, you might benefit from this without making any changes? Finally, are you still willing to accept the digital cash token along with the remaining tax, accounting, and compliance issues that require you to still hold a digital token?

Most small businesses that service the domestic market (and have had their same-day banking needs satisfied) will find that the acceptance of stablecoins has no relevance at this point. There are important differences for exporters, importers, global freelancers, and platforms that pay creators around the world. It is wise to keep a patient approach and avoid adopting technologies too early, since it is clear that not all technologies operate in the same manner.

What to Watch as Open USD Goes Live

The real test will happen during the official launch in late 2026. There are a few ways to assess if this will be infrastructure or remain a headline. See if Open USD is released on time. If it is, then see if it maintains its dollar peg during its first real use. Also, see if it maintains its shared reserve model during the stated launch.

The true test of that model will be if it erodes due to pressure from regulators or profit. Finally, see if Stripe and the card networks, among many others, direct substantial settlement through the system. The true test of demand will be the settlement, not the partnerships.

Don’t forget about the current players in the market. Open USD will not define the whole market, as Circle and Tether will respond, and how they respond (cutting fees, sharing revenue, etc.) will be as important as Open USD.

If in the next year the payments share starts to increase as Open USD launches, then this will prove that they are not just redesigning the market for stablecoins. If the payments market share continues to stay below 1% then Stablecoins don’t really serve a payment function and are just a tool for trading.

Conclusion

Open USD’s introduction into the market is exciting, not because a new token is available, but because of the companies involved and how Open USD has been organized. When trade giants such as Visa, Mastercard, and BlackRock, in addition to over a hundred other companies, agree to share governance and reserves, it is safe to say that regulated stablecoins will be a core building block of payment infrastructure.

The GENIUS Act cleared the legal hurdles, and the consortium is going through with it. For now, the most identifiable change for merchants will be faster cross-border payment transactions and faster payment transaction settlement.

These will most likely be done by payment processors. The hype is kept in check, however, by data. Trading, not payments, will continue to be the main stablecoin activity for now. The most prudent approach is to acknowledge the shift and adapt if it makes sense for your business. Open USD could be the first stablecoin to bring payment services to merchants, but it is not the first to provide stablecoin services.

Frequently Asked Questions

What is a stablecoin?
A stablecoin is a digital token that has a value that is usually equal to one US dollar and is backed by reserves. The purpose of stablecoins is to combine the best of both worlds by having the speed of crypto and the stability of regular money.
What is Open USD?
Open USD will be a business payments-focused dollar-pegged stablecoin designed by the Open Standard consortium, which is a group of 140 companies that includes Visa and Mastercard. It is expected to launch the business payments-focused stablecoin in 2026.
Why are Visa and Mastercard launching a stablecoin?
The newly passed legislation in the US makes regulated stablecoins possible. As for the legislation, if a competing entity owns the cheap settlement token, it could pose a threat. Supporting Open USD means that the networks will set the standard and not get circumvented.
Can businesses accept stablecoins yet?
Some merchants can. But adoption is still early. And payments currently represent a small fraction of stablecoin use. Faster settlement, which their payment processor will likely automate, will probably be the first noticeable benefit for most merchants.
What is the GENIUS Act, and what did it change?
Signed into law in July 2025, the GENIUS Act created the first framework for structuring payment stablecoins at the federal level in the U.S. Inclusive of payment stablecoins, it mandates full one-to-one reserves, charters for issuers and monthly reporting of reserves.

Barclays Acquires Kids’ Money App GoHenry as Acorns Keeps the US Business

A large retail bank has just acquired the first children’s debit card. In June 2026, Barclays reportedly agreed to purchase the UK arm of GoHenry, the money app for 6-to-18-year-olds, for approximately £180 million. The company’s US parent, Acorns, has sold GoHenry to Barclays as part of a corporate realignment. Acorns will keep GoHenry’s US branch as Acorns Early, thus dividing the brand. Barclays gets the UK branch while Acorns gets the US.

Compared to Barclays’ literal and figurative financial muscle, this purchase is small. The acquisition is meaningful for a different reason. This is the first clear example of the embedded finance trend extending the furthest to date, down to the crafting of financial products for kids. This deal will signal to any company that has a family-centric business focus how and where customer loyalty efforts should ideally start. This shows why GoHenry is attractive to Barclays and what implications this deal has for banks and merchants outside of the banking sphere.

Figure 1. The deal splits GoHenry by geography: Barclays takes the UK business, Acorns keeps the US operation and its European arm.

What Barclays Bought and the US-vs-UK Split With Acorns

Simply divide the elements to see the structure. Barclays will purchase GoHenry’s U.K. business, GoHenry’s U.K. brand, and the GoHenry app, while Acorns will retain the balance. The transaction is expected to be completed in the fourth quarter of 2026, pending regulatory approval. GoHenry will continue to operate as its own brand and app, under Barclays, and will not be integrated into the main bank overnight.

Barclays

Barclays presented the acquisition as a family play instead of a fintech play. The bank’s logic is lifecycle banking. Winning the parent customer means they will probably win the child as a customer. The bank is attempting to hold the relationship from the first child’s debit card all the way to the family mortgage and pension. The financial cost of the acquisition is minor.

Acorns

In April 2023, Acorns purchased GoHenry to extend its reach beyond the US. Acorns sold GoHenry’s UK division, enabling the firm to focus on the US and allowing Acorns to maintain its youth finance division in the US. Acorns’ Chief Executive, Noah Kerner, stated that the sale enables GoHenry to serve many more kids in the UK. Acorns also retains PixPay, the European teen money sub-company, continuing its family-centered fintech in the region.

What GoHenry Does and Why a Major Bank Wanted It

To understand the GoHenry app, it’s best to look at the functionality. GoHenry is a money management app for children that is far more than a beginner bank app. GoHenry allows parents to set parameters and load funds to a child’s actual debit card, which children can use to make purchases both online and in-store.

GoHenry

Louise Hill’s mission “to make every kid smart with money” started with the founding of her company in 2012. Now, Hill’s company has developed an app that serves users as young as 6. The app gives users a card, chores, and allowance tools, savings goal tracking, money lessons, and has parental controls (for transaction monitoring and category spending blocks) built in. GoHenry is currently serving more than 500,000 children in the UK and an estimated 2.3 million children globally. GoHenry is a subscription-based company, allowing it to operate without money management conflict (as many of its competitors do). As such, GoHenry is a suitable acquisition for banks.

Barclays understands this – so it paid the price GoHenry wanted. Barclays now has instant access to a trusted and established user base and an app designed to engage families and children, cultivating habits and securing brand loyalty in their future adult customers.

The Bigger Signal: Embedded Finance Reaching Youth and Family Niches

To understand why this deal matters, consider it a sign of something much larger. Embedded finance is integrating financial services like payments, cards, savings, or lending into non-bank platforms. It is the “pay in four” option at checkout and the payment wallet in a ride-hailing app. Now, it is a debit card in a children’s chore tracking app.

This deal is just one of many that is aimed at the lucrative embedded finance market. The market for embedded finance was worth an estimated $145 billion in 2025 and is expected to reach $2 trillion by 2034, at a compound annual growth rate of over 30%. Banking for the youth and their families is simply the latest embedded finance market to be captured. When Barclays invests in a kids money app, it is saying this market is no longer fringe. It is actually a competitive market.

Figure 2. The embedded finance market is projected to grow more than tenfold between 2025 and 2034, with youth and family among its newest segments.

Why the Next Generation of Cardholders Is Being Onboarded Early

You don’t need to be a financial genius to understand the main driver behind the strategy being discussed here. Banks have discovered how sticky financial relationships are. Once customers open a main account, they are unlikely to open a new one elsewhere for the remainder of their lives. This makes it most cost-effective for banks to target children to secure these customers for life.

Investing in a ten-year-old is not financially beneficial with a GoHenry card for today, but that is not the point. The point is to be part of the child’s money life early on. This is why many banks target children. By offering a GoHenry card to children, Barclays is first in line to provide financial services to the next adult generation with a credit card before their competitors even get to pitch their services.

Figure 3. A kids’ card is the entry point to a decades-long banking relationship, from first allowance to mortgages and retirement.

What Businesses That Serve Families Can Take From the Trend

You are not required to be a bank to take these lessons. Any business that works with families has the same opportunity Barclays just bought – to build an early, trusted relationship with both the parent and the child. The early and useful relationships are the ones that are rewarded the most.

Think about the businesses that have great regular contact with families. These are gyms, tutoring centers, kids’ activity clubs, and family subscription services. All these businesses interact with the same families repeatedly. All these contact points can be enhanced with a financial or loyalty component. The point of contact can be a stored-value card or a loyalty card integrated with the academy’s concession. The insight is not to provide financial technology, but to see that families are increasingly looking for and expecting financial technology within the services that they already use. These solutions make the businesses that provide financial technology integrated services the most sticky.

Financial Wellness as an Engagement and Loyalty Angle

This matters outside of the plumbing. GoHenry did not win over parents by providing a card. They earned the trust of parents by saying they would help parents teach their kids about money. Framing teaching kids about money as a service and not a product creates a loyal customer base, as it helps parents become more financially well-off.

Parents worry about kids growing up with the same guilt about money and no financial advice. A brand that offers a solution to that worry, by providing a lesson, setting a goal to save, or by providing a simple financial dashboard, will earn loyalty and goodwill, which in turn becomes retention. Parents will appreciate the tool and thus become loyal customers. The lesson any family-oriented business will learn is to provide the solution first. That solution is a financially confident and capable child, and the transaction can be out of sight. The wellness of the parent is the means, the engagement is the end, and the loyalty is the outcome.

Where Embedded Finance Shows Up for Everyday Merchants

For merchants, understanding this concept can be a little abstract until it reaches the point of sale. In reality, the trend of embedded finance touches most businesses via the applications that they currently use. Most of the time, this does not involve custom development.

It appears as “pay-over-time” options at checkout, branded gift and stored-value cards, instant refunds to a stored-value wallet, and flexible financing for larger purchases. These capabilities are bundled by payment and point of sale providers, making the activation of any of these capabilities as simple as flipping a switch in a settings menu. The most applicable element of the GoHenry story is that finance is an embedded feature in other products and services. A merchant that recognizes this trend is able to reach customers, including the younger customer segment, in the places that they already are.

What to Watch Next in Family and Youth Fintech

The GoHenry deal is a milestone, not a finish line. Expect more competition and more players in this space. Rivals like Greenlight, Step, and Current focus on the same families, and a bank-formed GoHenry will force them to enhance their offerings.

There are three main things to keep an eye on. First, other major banks are likely to create their own youth banking offerings or make purchases similar to Barclays. Second, more advancements and integrations in the space are expected. The offerings will likely move from prepaid cards to banking, investing, and credit services as the child gets older. Third, there will be scrutiny and more regulations around these offerings. Banking services for kids create scrutiny for data, marketing, and service fees. Family and youth-centered financial technology services are likely to become the main services offered, and the Barclays acquisition is likely the first of many large purchases made for this space.

Conclusion

This is a story about timing and trust, with branding stripped away. Barclays reportedly wanted to pay £180 million for a children’s app to strengthen the connections they expect to maintain for the next fifty years, while Acorns maintained the US business to protect this turf outside the US. The specifics of the deal will fade, but this deal structure will not. Banking is being integrated into the most common activities of a large segment of the US population, and the connections are getting started at the youngest age ever.

For business owners, the useful response to a bank’s children’s money app is not pain from seeing the bank’s big deal. It is the recognition that the factors that made the children’s money app a bankable deal—including formative loyalty, integration, and a financial wellness connection—are also within the reach of almost any service that is directed at families. You don’t have to be a bank to do this. You have to know that the tools of financial management are moving into the services people already trust, and position your service among them. Start your relational connection with a great service, and they will stick with you.

Frequently Asked Questions

What did Barclays acquire and why?
Barclays is said to have purchased GoHenry’s UK business for about £180 million. The acquisition allows Barclays to build a relationship with current customers and families that may yield future clients.
What is GoHenry?
Children and teens from ages six to eighteen can use GoHenry to learn about money practically. With GoHenry, children and teens can have their very own prepaid debit card, and parents can have peace of mind knowing that they have parental control over the card. GoHenry users can also set savings goals.
What is embedded finance in simple terms?
This refers to financial instruments, such as bank and payment cards, incorporated conveniently into non-bank products, payment systems, or savings. A common example is the pay-over-time option during the checkout process.
Why are banks buying youth-focused money apps?
Once the financial relationships are established, it becomes challenging to change them. Hence, the financial institution captures the customer for life if they capture them during childhood. From this perspective, offering a kids’ card is a low-cost customer acquisition strategy.
What does the family-fintech trend mean for small businesses?
Families seem to expect that the services they use will provide them with some type of financial products or money tools. Businesses that provide tools with loyalty programs, stored value, or pay-over-time will have deeper customer retention.

JPMorgan and Bank of America Roll Out Their Own Buy Now, Pay Later Plans

The checkout feature that lets you pay over time has shifted from fintechs to banks. Klarna, Affirm, and Afterpay reigned over that ‘pay in 4’ line. All the banks could do was sit and watch. That’s over. As of June 2026, Bank of America, along with the other big players, JPMorgan Chase, Citi, and U.S. Bank, will offer their customers the ability to pay in installments. Now, 4 out of the 5 largest banks have jumped on the opportunity to offer customers the ability to pay in installments.

For the small-to-mid-size business owner, this is less about banking news and more about you (and your customers) at the checkout line. The Bank-Backed BNPL options means your customer will likely have an option to pay in installments via the card they already use. Your customer will also expect to pay later when they check out with you. This guide clarifies what the banks have planned, the differences from Klarna and Affirm, and their new focus on debit cards that offer these plans.

It also gets practical and explains how widely available BNPL will be, what additional pay-over-time options will mean for your checkout, and how to add pay-over-time options WITHOUT having to completely overhaul your payment stack. The goal is to provide a clear answer to the question every merchant is now asking, which is whether pay-later options should be offered, how, and when.

Figure 1. BNPL originations climbed from under 20 million loans in 2019 to more than 335 million in 2023, the growth curve the banks are now chasing.

What the Big Banks Announced and How Their Plans Differ From Klarna and Affirm

It’s a simple headline. The largest U.S. banks are not going to leave a big payment market to the fintechs. Each bank built its own version, and while there are some variations in the details, the result is the same. The bank that you already hold a card with now wants to be your pay-over-time provider too. This is what each bank rolled out.

Bank of America

As the most recent example, Bank of America is offering a flexible-payment plan starting June 2026. With this plan, customers can make a purchase and choose to have that cost divided into equal payments over the next three to eighteen months. Unlike traditional payments that incur a cost each month with the potential of a balance remaining, Bank of America charges a preset, one-time cost that the customer pays in advance. This plan emulates the functions offered with a payment app, but Bank of America offers the function on cards already in the consumer’s possession.

JPMorgan Chase

JPMorgan Chase made the biggest splash in the buy now, pay later crowd with their “Pay in 4” product associated with debit purchases. For the cost of a five-dollar fee, if a payment is missed, a customer is allowed to evenly distribute purchases between the values of fifty dollars and four hundred dollars over four separate payments. Chase has been the first to market with this product and has expanded it across multiple channels. The hyperlink to the debit is important, and we will revisit this construct to highlight why it is the most disruptive factor in the entire Pay in 4 story.

Citi and U.S. Bank

Citigroup was the first to use a flexible payment model for its credit cards in 2019. However, unlike most companies, Citigroup didn’t provide a debit card equivalent. U.S. Bank entered the market with a credit card in 2025, allowing users to divide a purchase into three equal payments over three months, with a small fee (around 1.5%) for extending the payment. Other local banks like KeyBank and Old National are also introducing their own products. It’s obvious that the market is changing, and installment lending is going beyond fintech and into traditional banking.

The main difference that banks have over the fintechs is both trust and payment systems. Klarna, Affirm, or Afterpay reach their customers through a separate account and app, and they underwrite every customer at the point of sale. The banks reach their customers through an account and a card in their everyday banking. The banks are relying on a customer relationship that may be years old. It is the same convenience at checkout, but very different systems are behind it.

Klarna and Affirm

The fintech originals set the standard for what customers expect today and should therefore help us establish a benchmark. Affirm and Klarna essentially built their models within the merchant’s checkout and introduced customers to an instant “pay over time” option for purchases.

Customers may prefer this option over using a credit card. Both firms approve customers instantly, take the risk of nonpayment, and pay merchants the full amount. The reach of both firms is extensive and is the primary reason banks decided to enter this market, rather than forgo it. To understand one large fintech player in this market, you can check out the Afterpay, Block, and Cash App Pay analysis to see how this system functions for merchants.

Credit-Card Installments vs the Newer Debit-Card BNPL Twist

Most bank installment plans are attached to a credit card. The customer has an extended credit line, and the bank offers to convert a large purchase to a series of monthly payments. While useful, this is not a novel idea. Real innovation is happening on debit.

Debit-based BNPL is a new idea, and is the reason why Chase is offering this product. Around 130 million people in the US rely on debit to make purchases. Many of these people either do not own a credit card or prefer not to use one. Traditional BNPL from the fintechs was designed to cater to these debit-first consumers, and is a large reason for their rapid growth. Now, the banks are offering these consumers the ability to make purchases directly from their checking account, and not from any line of credit.

Figure 2. Credit-card installments simply repackage an existing credit line, while debit BNPL reaches the large group of shoppers who avoid credit entirely.

For merchants, it increases the chances a customer will say yes to a larger sale. A shopper who would otherwise never incur a credit balance may now buy a $200 item by using their debit card to pay $100 for each of the two installments. With the bank taking care of the details, the customer feels in control, and a sale that may have otherwise been lost now goes through. This is the quiet debit twist promise and is the feature most likely to show up at your checkout in the coming year.

The Data: How Widespread BNPL Use Has Become (and Who Uses It)

It is easy to see buy now, pay later (BNPL) methods as catering to a specific type of online consumer, but the data indicates such a view is myopic. BNPL methods have quickly transitioned from a peripheral payment option to a popular and convenient method of payment, making the deliberate choice to disregard the option a legitimate threat to a business’ strategy.

Looking at the numbers from the Consumer Financial Protection Bureau, BNPL loan originations have increased from approximately 19.8 million loans in 2019 to around 335.8 million loans in 2023. In the same period, the dollar value of the loans in the market increased from approximately $2.7 billion to $45.2 billion. In 2023, there were 53.6 million BNPL users, an increase of 12 percent in a single year. These numbers reflect a payment method that has permeated the retail industry, as BNPL methods have become a popular payment choice.

Figure 3. BNPL adoption is broad and skews young, with more than a third of adults and half of those under forty using it recently.

As the coverage of the service increases, so does its depth of use. For example– in 2023, the average BNPL user borrowed from each lender 6.3 times compared to 5.7 times in 2022. In addition, each user spent an estimated 848 dollars in the BNPL service that year. Surveys from early 2026 showed that 37 percent of adults in the United States (and about half of adults under 40) used BNPL services in the last 90 days. The typical loan that users take is around 135 dollars, meaning that this service is less likely to be used for big purchases and is likely used for small, more frequent purchases. So, if you are a merchant, then this is the service that your consumers want, whether you are offering it or not.

Why Bank-Backed BNPL Users Report Higher Satisfaction

Merchants should take an interest in the following finding. According to J.D. Power, users of the Buy Now Pay Later (BNPL) service from banks reported greater satisfaction when compared to users of the service from traditional FinTech companies. This finding is especially important because understanding the greater satisfaction from bank-provided BNPL services will help merchants predict trends in the eCommerce and payments market.

The most plausible explanation for the greater satisfaction from bank-provided BNPL services is trust and seamless integration. Unlike traditional fintech-named BNPL services, if a bank offers its own BNPL service, it is offered for use within the customers’ bank account, card, and banking statements. This means that customers do not have to worry about a new app, a new brand, a new loan, or payment data. This reduces the anxiety associated with banking loans, which results in greater satisfaction.

The greater satisfaction can be explained by the confidence customers have in banks compared to fintech companies. Fintech is known for rapid and aggressive growth, and this can cause anxiety and a lack of confidence in customers. Because banks are large and financially regulated, customers have confidence in the banking system. For a merchant, the payment service system providing greater satisfaction to customers will have a lot of positive impacts. It translates to fewer payment disputes, fewer returns of purchased goods, and a positive experience of eCommerce, which diminishes the anxiety and stress associated with shopping.

What More BNPL Options Mean for a Small Merchant’s Checkout

The banks are onboard, the fintechs are entrenched, and customers have adapted to all of it. What changes for you? It’s time to prepare for pay-over-time to be integrated into every modern checkout system.

When pay over time was only a part of the fintech world, it was an optional service for most merchants. It is no longer an optional service. Now that the largest banks have begun to push installment services through their cards, the real ambient nature of the service is just beginning. Your customers will be exposed to the service (through their banking apps) time and time again. With each exposure, the expectation that they can pay over time with you grows. A system that only allows checkout by pay-in-full is beginning to feel antiquated. The same way that customers felt the need to go to a store that did not only accept cash.

Figure 4. As bank and fintech options multiply, pay-over-time moves from a differentiator to a baseline checkout expectation.

It’s safe to say that, as with most things, competition has an upside and a downside as much for your business as for Buy Now Pay Later (BNPL) service providers. In the long term, the BNPL competition causes the service fees to decline and the offerings to increase, which benefits merchants. Greater competition among pay-over-time service providers, for example, allows merchants to implement pay-over-time features via integrated fintech solutions or through payment card networks. Today, the bigger concern is not whether a pay-over-time checkout solution is warranted, but rather what the solution’s impact will be on your business. This touchstone focuses on the long term and the willingness to invest in a pay-over-time solution that has a positive impact on your business.

The Cost-and-Conversion Question: Lift vs Fees vs Cannibalization

This is where you find out if you should implement BNPL in your business or avoid it. There’s a cost associated with offering pay-over-time, so you have to be careful with your analysis. Weigh the boost in sales against the payment processing fees and the risk of cannibalizing potential sales—that is, paying BNPL fees on sales you would have made anyway.

Let’s start with the boost in sales, as it is significant. Research shows that implementing BNPL during the checkout process results in sales with larger average order values (AOV) and an increase in sales conversion rates. There’s an increase in sales when you offer checkouts with pay-over-time that can increase average order values (AOV) by 10-30%, and many BNPL providers state that the improvement can be even greater depending on your product offerings. Many shoppers will not purchase if the total cost is high, however, if you offer pay-over-time with a total of $400, shoppers will be much more willing to purchase the product offering.

The Fee Side of the Ledger

Now for the cost. BNPL comes at a higher cost than standard card processing. A merchant should be aware. Standard card processing cost typically runs about two to three percent. BNPL cost is typically four to eight percent. Klarna typically charges about 3.3 to 6 percent plus a flat fee, Affirm charges about 6 percent, and Afterpay about 5 percent. Although it is more expensive, it buys you the sales lift and transfers the repayment risk from you to them, but it does cut into your margin and will only be worth it if the increased volume is greater than the cost.

Figure 5. BNPL acceptance costs roughly two to three times standard card processing, so the sales lift has to be large enough to cover the gap.

The Cannibalization Trap

The most insidious risk is probably cannibalization. If a customer was going to buy an item for one hundred dollars anyway and you incur a six percent BNPL fee on it, you have given away margin on a sale you had. BNPL earns its cost when it incentivizes customers to buy an item that would not have been purchased, and not when it redirects a sale to a more expensive option. The math is most precise when it is clear that when BNPL is offered, average order value and conversion rates increase. The BNPL fee is justified when it offers large orders and the fee is cost neutral. If the opposite is true, you pay customers to pay you more slowly. If your card costs are a concern, our guide to ecommerce payment processing gives you the baseline you should refer to.

How to Add Pay-Over-Time Without Rebuilding Your Payment Stack

The good news about providing pay-over-time options for small businesses is that it no longer requires a lot of engineering effort. The market has progressed to the point that offering pay-over-time options is a near plug-and-play process, and in most cases, you do not need to modify your core systems to enable it.

Many modern payment and e-commerce systems have buy-now-pay-later (BNPL) capabilities. Enabling it is usually as simple as selecting the right provider within your payment systems dashboard, and the pay-over-time option is added to your checkout. Because these options typically work within your current payment processor and your current e-commerce system, you avoid most of the headaches of a new system integration, new payment terminals, or a new reconciliation process. The payment provider takes the risk of approving the customer and the repayment risk, and you receive the full payment within a day or two, less the payment provider’s fee.

The smarter way to approach this offering is to view it as a settings change rather than a systems change. Look first at the current capabilities of your payment provider, and offering pay-over-time for higher-cost products is the most reasonable first step. Based on the relatively new technology in the checkout space that enables purchasing via installments, it is reasonable to assume that the purchasing landscape will change rapidly in the near future.

With BNPL, we should feel like we’re flipping a switch, not renovating the whole store.

What to Watch as Banks and Fintechs Keep Competing

One thing we do know is that the market is going to keep changing and not stabilize. Banks and fintechs are competing for the same checkout moment, which will continue to change what merchants have available to them. Below are trends that will be important to monitor.

Monitor the fees first. Price competition occurs, and merchants end up with better outcomes when large banks enter the markets that were originally dominated by fintechs. Also, monitor the debit expansion. Chase’s model of splitting payments is likely to be adopted by other banks, and therefore, when payments are split, shoppers will have the option to do pay over time without the use of credit. Lastly, watch and see how these financial innovations are integrated into the card networks and banking apps your customers use. The more integrated these financial innovations are, the more customers will expect these innovations.

The practical approach for a merchant is to remain flexible. Be adaptable to changes in the market. Choose a payment infrastructure that allows you to change providers as the market changes. Continue to measure your outcomes against the fees. The value of a competition between banks and fintechs is positive if you view buy now pay later as a lever to constantly adjust rather than a once-and-done decision.

Conclusion

JPMorgan and Bank of America’s launches of Buy Now Pay Later (BNPL) services may grab the media’s attention, but this is also proof that fintechs no longer own the ‘pay-over-time’ space. Now, it comes in the form of the cards your customers already use. Bank BNPL is familiar, will most likely improve Customer Satisfaction (CSAT), and even has a debit-based option to reach customers your offer credit couldn’t. From a merchant’s point of view, this will be a game changer. More customers will expect an installment option, and a pay-in-full-only checkout will feel like a limitation.

BNPL should not be rushed into. There is most likely an increase in sales with higher value transactions, and a greater rate of transaction, however, the costs will also increase to 2-3x the cost of a standard card transaction. Your sales should not be negatively impacted. Keep an eye on the order value and transaction conversion after launching the service. The ‘pay-over-time’ option is probably already integrated into your payment solution, so start with that and expand the service offering only when justified. The banks and fintechs will continue to compete and shift the market, so be flexible and offer different service options to justify the cost. Bank BNPL will present you with opportunities and not limitations.

Frequently Asked Questions

What is bank buy now, pay later and how is it different from Klarna?
It enables customers to divide a purchase into equal installment payments. Unlike Klarna, this option relies on a card and account already in the customer’s possession, requiring no additional app or account.
Should a small business offer BNPL at checkout?
Usually, yes. This is the case when you sell higher-priced items and the larger shopping cart value minimally impacts the cost. Begin with the least amount, compare the increase to the cost, and only expand where the numbers justify it.
Does offering installment payments increase sales?
Typically, Buy Now Pay Later (BNPL) increases the average order value by 10 to 30 percent. It also enhances the checkout conversion rates, particularly with larger purchases. The benefit is only recognized when it is additional (incremental) sales, not for the sales you already made.
What does BNPL cost a merchant?
Expect charges around four to eight percent for each transaction compared to the standard two to three percent for typical card processing. You get the money first, and the provider carries the repayment risk, so you get charged that fee.
Is BNPL available on debit cards now?
Yes, JPMorgan Chase has a debit-based “Pay in 4.” Debit BNPL is growing rapidly in the market and allows customers to split payments directly from checking with no credit involvement at all.

How to Talk to Customers About Card Fees Without Losing the Sale

Your customers aren’t mad about card fees. It’s about the lack of communication. A customer taps the card they have tapped hundreds of times before and is met with an unexpected fee. This customer is now instantly thinking about all the times they have been taken advantage of by a business they considered trustworthy. Your customer thinks they have been given a fee to use your business, but the fee was negligible. The surcharge backlash impact was not.

Most owners don’t understand that the customer is not upset about having to pay card processing fees. The fees are expected and commonplace. Most customers have paid a processing fee before. The customers who do stop using your service are no longer considering the percentage of the fee. They are upset about the lack of communication. This guide is to help your business achieve better communication.

You will learn how to talk to customers and explain a processing fee in a manner that your customer is more inclined to accept, how to reframe a fee as a payment choice, how to convey the message through signage and staff scripts, how to handle the very rare upset customer, how to confirm your fee and communication are compliant, and a plan to implement this new communication strategy within a week. Communicating the fee correctly will save you sales.

Figure 1. The same fee lands very differently depending on whether the customer heard about it first.

Why Most Surcharge Backlash Is a Communication Problem

Customers think nothing extra comes out of your pocket when their credit card or debit card goes “swipe.” Because of this, when customers notice sudden added fees on their statements, they don’t understand that every card swipe costs money and therefore think you are charging extra money for your products. Because of this, your customers will perceive you as stealing from them, and begin to look for alternative solutions, quoting the “stealth charges” as the reason. The problem is not the amount of the fee; the problem is that the fee surprises them.

Considering the additional costs, nearly 60% of cardholders don’t consider a surcharge by itself a reason to complain. What’s worse, many of those same customers say they would switch to another vendor over a surprise surcharge. The reason for this contradiction is that the surcharge itself is not the issue; it’s the unexpected fee, discovered at the moment customers are about to pay, when they are most vulnerable.

Figure 2. Most shoppers have already met a surcharge, yet many would still walk over a badly handled one.

This development should benefit you. Communication issues are the easiest to resolve. You cannot influence the costs on card networks, and there are times you cannot eat those costs. However, you have full control over the information provided to the customer before they get to the register. Essentially, every point in this guide aims to move the moment of discovery earlier. Instead of the unpleasant surprise at checkout, you can provide the customer with a notification well in advance. An expected fee is just background noise, and that is the ideal situation.

Surcharge, Cash Discount, or Service Fee in Plain Customer Language

To explain a fee to a customer, you first need to understand what fee you have. The industry has four words for this, and they are not synonymous. Each term has its own fee rules and its own feel at the counter. Choosing the wrong term will confuse the customer and may also put you on the wrong side of the card networks.

Surcharge Versus Cash Discount

A surcharge means a percentage is added to the price when a customer pays with a credit card. The price as seen by the customer remains as is, but the fee is displayed on a separate line at the checkout. On the other hand, a cash discount means the posted price is increased to cover the cost of card acceptance, and the price is then reduced for customers who pay by cash or debit. The cash discount and credit card surcharge may result in the same price, but the perception of the price will be different. A surcharge is perceived as an additional cost, whereas a cash discount is perceived as a payment received for a service.

The cash discount vs credit card surcharge mechanics balance in pricing, but they do not in the perception of the price, and that is what is most important to a business. Consumers will always perceive a deal favorably over a price increase. However, in pricing, the surcharge or cash discount must be kept honest. Discounts can be claimed only if a surcharge is legitimately in place. If a surcharge is dressed up as a discount, customers and card networks will treat it as a surcharge.

Convenience Fees and Service Fees

The other two terms are more specific, and most small businesses shouldn’t go for them. Convenience fees are charges for people who choose to pay with one of the other payment methods, like paying online instead of in person, and are restricted to certain scenarios by the card networks. Service fees are even more specific, and are reserved for card acceptance by government and educational institutions. Using either term in a loose manner invites confusion for the customer and compliance issues for the business. For the average shop, salon or clinic, the real choice is between a clear surcharge and a cash discount framing.

The Framing That Works: Choice and Savings, Not Penalty

Two companies can charge the same price and receive completely different responses. This is primarily due to relative framing. Framing a price as a penalty for using a credit card versus framing it as a price that is a few cents less for cash or debit is the same effective price for both. Framing is not spin. It is narrating the true price and value in a customer-acceptable manner.

Lead With the Reason, Not the Charge

A cost that is explained generates customer forgiveness. Therefore, you should tell them the reason for the fee first. If a customer pays with credit, card networks charge you. If you choose the option of not absorbing the fee, it is fair that you charge customers who choose to pay with credit. Passing the cost along means customers who pay cash are not subsidizing those who pay by card. This sentence explains everything. You are being fair to everyone.

Figure 3. The same fee, reframed from a penalty into a choice, changes how customers respond.

Always Point to the Free Path

A choice is only a choice if there is another door. This is the most important habit in successful communication. Whenever you mention a card fee, also mention how to avoid it. Fees are completely waived by payments made by debit, cash, or check. That simple addition changes the entire communication. The message no longer communicates that the customer is being trapped into a fee. Rather, it provides the customer a choice, which most people will still decline, shrugging and paying with the card anyway. However, the trapped feeling is completely avoided, and a customer with a way to avoid a fee is rarely dissatisfied.

Signage That Does the Talking Before the Counter Does

You have already had the best surcharge conversation before anyone spoke. Good signage does this. It shifts the moment of discovery from the register to the doorway and the menu, where the information is presented in an “I’m just telling you” way rather than a “surprise, gotcha” and is, therefore, not a problem. Additionally, signs that are clear and unambiguous assist in meeting a compliance requirement, so doing them right is a win.

Where the Signs Have to Go

Card network rules and common sense agree on where to place surcharge notices. A notice should be placed at the point of entry, which is the front door of a physical store or the landing page of an online store. A second notice belongs at the point of sale. The reasoning is that no customer should get to the point of sale without knowing the fee that they are about to pay. The surcharge is to be displayed on the receipt as a separate line and should not be included (merged) in the total amount paid.

Figure 4. Disclosure belongs at two points: the entrance and the register, so the fee is never a checkout surprise.

What the Sign Should Actually Say

The wording and placement of signs is valuable. A friendly, law-abiding sign describes the fee, explains how it relates to your cost, and identifies the cost-free option. A clear template is: “We add a small surcharge of X% on credit card purchases, which is not greater than our cost of acceptance, and we never surcharge cash or debit.” This one sentence is designed to accomplish each of the three tasks.

It describes the fee, explains the fee is not a benefit to the company, and illustrates the way to avoid the fee. Use large font, a friendly tone, and plain language. A sign that has the appearance of a legal warning will create the same anxiety that you are trying to avoid.

The 15-Second Staff Script (and What Never to Say)

Signage introduces, but your team finishes. The response your team gives in that critical moment when a customer asks you about the fee in those few seconds defines whether that moment will be calm or turn sour. That is why the script has to be short, warm, and consistent from each and every employee. A confident one-liner is reassuring. Providing a fumbling, apologetic response will invite an argument.

The Line That Works

Post the wording below on the wall near the cash register and teach your staff how to answer complaints about card transaction fees with it: “To use the credit card payment option, a processing fee will be applied, and this is noted on the signage that’s placed by the entrance. If you want to avoid the fee, you can use cash or a debit card.”

Then tell your staff to smile and give the response without dragging it out or wasting any more of the customer’s time while the line forms behind them. With the wording posted, the staff has the option of instantly handing the customer the answer. There is no need for an apology or a long explanation, since neither of those serves the customer.

What Never to Say

What your team should never do is just as significant. Never criticize the customer’s card, argue over who pays what, or become defensive when someone complains. Responses like “that’s just our policy” or “everyone does it now” are combative and dismissive. Lines staff must also avoid including: “let me do the math for you” or “the fee is temporary, I promise”. The goal is to move the customer, briefly and politely, to the next stage in the process. A customer is likely to be calm and composed when the staff behind the counter exhibits the same attitude and treats the fee as a normal, no-big-deal occurrence.

Handling the Upset Customer Gracefully

Most customers won’t care enough to complain. A select few might. When this happens, and there’s pushback, the instinct is to get defensive. That’s the wrong move. The upset customer isn’t really unhappy with the three percent fee. They are feeling surprised or disrespected or are feeling that they are being financially squeezed, and that fee is where it all came to the surface. Most of the time, if you address the feeling, the fee stops mattering.

Acknowledge, Redirect, Offer the Exit

This approach is straight to the point and works almost every time. It helps to acknowledge the customer’s frustration. A customer who feels heard quickly calms down. Then provide the reason, in as few words as possible, that due to the increased costs of accepting cards, we decided to add a fee rather than increase all prices.

Then provide the offer: cash or debit avoids the fee, and you are happy to process the sale that way. Most people just need to feel heard and be given a clear direction. The fee to accept card payments was never the real concern; it was the feeling that they had no other options.

Know When to Just Waive It

Limits exist, and successful businesses adhere to those limits. It is almost always correct to forgo a minor fee for a customer of true value. The economics of the situation support waiving the fee. A single charge is negligible compared to the value of a customer who is likely to return for the long term. In those few situations, give your customer service staff the authority to remove the fee without having to call in a supervisor.

This also provides the opportunity for a little customer service magic where that staff member can say something like “no problem, I’ve taken that off for you” and then the customer has a positive experience that they talk about. If you are being inflexible about charging a few cents, then those few cents are probably the most expensive fee you will ever collect.

A Quick Compliance Gut-Check Before You Launch

For the communication to land, the fee program behind it must be legitimate, and the conditions here are particular. This is more of a ‘sense check’; however, this is not comprehensive, and you should definitely give the full compliance brief a read before implementing this. That said, a few requirements tend to snag the majority of businesses, and if you address those, you will mitigate the greatest risks.

The Rules That Trip People Up

First, consider where you do business. Only a handful of states completely ban credit card surcharging, so where you do business largely determines whether you can implement a credit surcharging program. The next consideration is cost. While you can surcharge for the cost of accepting the payment, the cap on surcharges is generally three percent. Next is the debit rule. This is an absolute Federal rule, and you can never surcharge debit or prepaid cards, even if the customer runs the card as a credit transaction.

Lastly, your processor (acquirer) must be notified 30 days in advance of the surcharging program, since the card networks no longer take that notice directly, and every surcharge must be listed as a separate line item on the receipt.

The Card Networks Set the Ceiling

Visa and Mastercard

Because the card networks set the caps for everyone, their rules should be acknowledged. Visa limits credit card surcharges to three percent of the transaction. Mastercard permits four percent, but to stay compliant, most processors impose the three percent cap. The disclosure requirements that both networks have are already covered here and include a separate line on the receipt and signage at the entry and checkout.

Since these rules are dictated by the networks and not by a state, they are applicable wherever the cards are accepted. The network requirements should be considered the minimum in comparison to your state’s law. Thus, your program should satisfy the greater of the two.

A One-Week Rollout for Staff and Signage

A lengthy project plan isn’t necessary for you to launch this successfully. You need a week along with the correct order of operations. Launching too quickly causes the checkout surprises you’re trying to avoid. A short rollout saves you the trouble of losing goodwill. Below is a sequence that is effective for a small business.

Figure 5. A calm one-week rollout moves the fee from surprise to expectation before it ever hits a receipt.

From Notice to Normal in Seven Days

Confirming compliance and providing the required notice to your processor at the start of the week means the legal groundwork is done before any customer hears a word. During the next few days, prepare and print the signs for the door and the counter, and write a short staff script. By midweek, inform your team of the new updates and walk them through the staff script, and have staff practice asking and answering the questions until the answers become natural.

Two or three days before activation, give your customers notice through email, booking confirmations, and a note at the counter. This way, your regular customers will hear the information from you and won’t have to discover it on the activation day. During the activation day, the staff fluently knows the answers to all questions, and the customers are already expecting the fee, which is the whole point.

Conclusion

Card fees don’t lose sales. Withholding information does. Every adverse response to a fee occurs because a customer was blindsided by a charge. Fix the communication, and the charge is a non-issue.

The strategy itself is simple. Choose the right label so you can describe the fee honestly, and frame it as a choice rather than a trap. Let your signage do the talking early; discovery happens at the door, not at the counter. Give your employees a simple script, warm empathy, and the no-argue discipline, and your customers will feel acknowledged and move on.

Waive the fee when your regular customer is upset. Meet the basic legal and regulatory requirements first, and then roll out the strategy in one calm week of no surprises. This doesn’t require you to absorb costs; it requires you to tell your customers the truth, kindly and early, and show them how to avoid the charge. This preserves your margin and your sale.

Frequently Asked Questions

How do I tell customers I’m adding a card surcharge?
Tell them in advance. Tell them the reason. Announce the new policy and issue a price change notice a few days in advance via email, booking confirmations, and a note at the counter. Leave no customer shocked at the register. Lead with the reason. Card networks charge a fee on every credit transaction, and you’re not raising prices across the board to cut margin, so this fee is being passed to the customer. In the same communication, suggest the free alternative. Pay by debit, cash, or check to avoid the fee. The goal is to make the price change expected and perceived as fair when the customer first sees the fee on a receipt.
What’s the difference between a surcharge and a cash discount?
A credit card surcharge raises the price by a percentage and is displayed as a separate charge line at checkout. A cash discount is the opposite. You raise your listed prices to cover card fees, then minimize them for cash and debit payments. The end price may be the same; however, psychologically and emotionally, customers are more inclined to appreciate a discount than an added charge. Whatever you decide to implement, it’s vital that your business practices are consistent with the label you select because your customers will very quickly recognize any time you disguise a surcharge as a discount.
What should staff say when a customer asks about the fee?
An excellent, warm, and confident response should take no longer than 15 seconds to communicate that a small card fee for processing is posted on the sign by the door. Debit and cash transactions avoid the fee. It is a fact and policy posted for all to see, with a free alternative right there should they wish to take it. Lengthy apologies, explanations of who pays what, or saying, “that’s just our policy,” invite arguments and fights. When your team treats the fee as routine, almost all customers do the same. Treat the fee as an exception, and customers will treat it as one too.
Will I lose customers if I pass on card fees?
If done correctly, the communication around surcharges can help retain customers, rather than losing them. Surcharging has become commonplace. In fact, most cardholders have encountered surcharges, so the concept is no longer novel. Most customers leaving and taking their business do not leave due to the fee, but because of the surprise when they see it, for example, when it is not communicated clearly and/or ahead of time. People will not be upset with the fee, and in most cases, will move on. Framing a surcharge, or any communication around it, as a choice and clearly offering a fee-free option as a way to pay ensures that most customers accept the charge and move on. A lost sale is bad, but the far more common outcome is customers switching to fee-free debit or cash, which is exactly the tradeoff you want, rather than walking away.
What signage do I need when surcharging?
You have to post two notices – one at the point of entry (the front door or the landing page of your website) and one at the point of sale (the checkout page). These notices have to state what the fee is, relate it to the cost of acceptance, and mention the free alternative. An example is to say that you add a small percentage to credit purchases, which is equal to the cost of acceptance, and you never surcharge cash or debit. In addition to the notices, you are required to provide a receipt that shows the surcharge as a separate line item (i.e., you are not allowed to hide the surcharge in the total). Visible, friendly, clear signage will help you remain compliant and help maintain your trust.

Beating the Slow Season: Off-Peak Promo Ideas for Salons and Spas

Every salon and spa experiences similar quiet times, like the Tuesday afternoons that never book up, the lulls that follow the holidays when the phone goes quiet, or the mid-summer slow spells when the clients are on vacation instead of in your chair. The empty hours feel like a problem that has to be solved, and the usual solution is a twenty percent off special posted on a sign in the window. It works only temporarily. Then the deal-seekers come, the regulars wonder why they paid the full price, and the valley comes back the next month, only deeper.

The slow season time of the year doesn’t always have to be viewed that way. The goal of the business is to fill the gaps and bring the income that is expected in the future closer to the present and convert the single-time visits into booked appointments. If executed properly, the slow times for a business can become the time of the most potential income for a business instead of the time of most planned markdowns.

The goal of this guide is to share the ways that salon marketing will fill your slow days while avoiding the situation of training your clients to wait for a sale. It will illustrate the cost of unnecessary discounts to your business, the value of time-sensitive offers and prepaid packages, and the most effective, highest value habit your business could implement during checkout. By the end, you will have a promotional calendar that fills your valleys while protecting your rates.

Figure 1. The off-peak system moves demand into the gaps instead of cutting price across the board.

Why Blanket Discounts Hurt More Than They Help

The general discount is what most owners will default to first. It is also the most damaging. A general discount teaches the clients you want to keep and continue doing business with to wait, attracts clients you do not want to have, and eats into your profit margins, which you cannot afford to lose. The why behind this is the basis for the next smarter business decisions you will make.

The Deal-Seeker Trap

Discounted services may attract new customers, but look at who those discounts actually attract. Your new customers become bargain hunters and are gone until your next discount. It doesn’t help your business, because they will not make your services a regular habit, nor will they pay full price. To make things worse, your new bargain customers will be more demanding than your typical clientele. Your time is precious, and your chair time is gone on the least likely customers to return.

Discounts are easily noticed by your existing customers. Your regulars who pay full price will be the first to notice your discount, and your regulars will feel like they have been betrayed and punished for their loyalty. Your discounts will erode the trust of your most faithful customers and damage your business in the long run, because your services will seem like they are always up for negotiation. Frequent markdowns devalue your services, and customers will be unwilling to pay full price when the discount is no longer available.

The Margin Math a Discount Hides

The actual expense is in the numbers that most owners never run. Discounting a service is not a small reduction. It cuts into your profits. It also requires more volume than a slow season can provide. With typical salon gross margins of around thirty percent, a twenty percent discount means you have to fill two hundred percent more appointments to make the same money as before the discount. The challenge is, during your slowest weeks, you definitely cannot fill that many appointments.

Figure 2. The extra volume needed just to break even climbs fast as the discount deepens.

The facts show that caution is warranted. Just about fourteen percent of clients abandon a salon to find lower prices. The greatest percentage (almost sixty-eight percent) of clients drift away due to feeling neglected. That one statistic completely reframes the slow-season dilemma. Clients do not want a cheaper service. They want to feel appreciated and have a reason to return. The answer is client retention, and not markdowns. The retention of clients, just by five percent, can yield profits of twenty-five to ninety-five percent. That is a return that no markdown will achieve.

Fill the Dead Hours: Time-Based and Last-Minute Offers

Some discounting is an important strategy. The trick is executing discounting with precision. The biggest flaw with a blanket sale is that it discounts for every potential customer buying your services. This includes customers that would have happily paid full price for a Saturday booking. The opposite effect is created with time-sensitive offers. Time-sensitive offers direct the discount at the hours you are unable to sell.

Off-Peak Pricing That Protects Your Peak

The idea is that your Saturday is booked and your Tuesday at two is up for grabs, so they should not be offered the same deal. A small incentive to clients midweek will fill those otherwise empty midweek slots. Flexible clients, retirees, remote workers, and parents with school-aged children will take those slots. Your weekend slots remain booked because the weekend clients, who want those slots, pay for them. It is not a discount. It is pricing your calendar the same way an airline prices a midweek flight.

This is effective because the deal is offered for a time and not for the service. A midweek “happy hour” blowout deal prices the hour, not the service. It is a nice perk, and it does not impact your busiest windows. It fills the hour you most want to fill and offers a specific reason for a specific group of clients to use it. The discount is small, the focus is clear, and your brand is priced at full value where it matters most.

Last-Minute Fills Without Training Discounters

The other “dead hour” is the mysterious one — the one that doesn’t appear until a cancellation happens. A chair that suddenly frees up an hour ahead is an hour of work that would otherwise earn nothing. The challenge is to keep the offers unpredictable and rare, so people can’t strategize to take advantage of the offers when they become available.

Filling Sudden Gaps Through a Marketplace

Booksy

Last-minute bookings are now easier with the help of marketplace apps. Booksy is a booking application for salons and barbers that reveals same-day appointment openings to nearby customers. With this application, filling your time slots to gain new clients is easier than promoting a discount to your loyal clients. By using this feature, the marketplace acts as a way for your business to gain new clients.

The same warning that applies to everything is present here as well. Do not push last-minute deals to your loyal clients; use the marketplace to reach new people instead, or your loyal clients will learn to search for discounts.

Prepaid Packages and Memberships That Pull Revenue Forward

Discounts push money from your business, but prepaid plans pull payments forward. Memberships and packages pull funds forward and create cash flow for your business. The change from paying in advance instead of per visit smooths the impact of the slow season on your business more than any discount ever could. Prepaid plans and memberships help you create customer loyalty, which helps end the slow season.

Why Prepaid Beats One-Off Bookings

Every month is a gamble with one-time clients. They might choose to come back, or they might not, and your revenue is unpredictable. A member has already paid and has committed to a routine. Members are gold because they visit much more regularly than one-time clients. There is a notable difference. A one-time or casual client without a loyalty plan visits on average about four times a year. A member visits on average about seven times a year. More visits equal less idle time on your most dreaded weeks.

Figure 3. Members visit more often and are worth several times more over three years than one-off clients.

The difference in value over time is greater than the difference in visitation. In three years, a non-member is worth about $350 to $600. During the same period, a loyalty member is worth an estimated $1,200 to $2,800. Retention reinforces the picture. Loyalty members have an approximate retention rate of 78 to 85 percent, while the rest have a rate of 55 to 65 percent. A membership doesn’t just help with a slow Tuesday. It significantly helps to rebuild your entire revenue floor.

Do Memberships Work for Small Salons and Spas?

Small businesses think memberships are a strategy used by large businesses. That is not the case. A small studio or salon feels the financial impact of an empty chair more. Memberships provide a predictable form of income. They benefit small businesses more. To offer memberships, you do not need a complicated app or thousands of clients. You need one honest offer that your clients want.

Memberships offer a lot of flexibility. A salon can offer a monthly membership for a blowout, a prepaid membership for six color appointments, or a spa club that has one facial a month and a member discount on all services. The prepaid per-visit price should sit just below your walk-in price, low enough to reward commitment while still protecting your margin. Once that number is set, anything beyond it is a benefit for the client. With prepaid memberships, the business is protected. With clear membership terms and real perks, even a small salon can count on its loyal clients to provide steady income.

Rebooking at Checkout: The Single Highest-Leverage Habit

Each tactic in this guide is a standalone success strategy. This one is particularly phenomenal. It is cost-free, takes 10 seconds to implement, and grows to bring in tens of thousands of dollars yearly. It is simply booking the clients’ next appointment prior to them leaving the salon. Most salons don’t have this in their processes. Salons that have mastered this process have little to no slow seasons.

Figure 4. Lifting the rebooking rate from 50 to 70 percent can add tens of thousands in annual revenue.

Why the Chair-Side Ask Wins

The best time to book a client for their next appointment is right after their service. They leave the salon looking and feeling great. Their beautiful look helps them to envision their next appointment! If you let them leave without booking their next appointment, that feeling will fade and their calendar will get increasingly busy. Ask the client to book their appointment before they leave the salon to turn a feeling into an appointment.

It is easy to see the positive effects booking a client for their next appointment has for a salon’s revenue. An increase of rebooking rate by 10% has the potential to increase a salon’s revenue by 15 to 20% annually. For a salon of average size, increasing the rebooking rate from 50% to 70% could potentially increase revenue $40,000 to $80,000 annually.

Salons that have a rebooking rate of 70% or higher spend 30% less on client acquisition, meaning they have much lower costs to attract new clients. Booking an appointment at checkout hovers around an industry standard of 30% to 35%. The top salons reach 70% or higher. The difference is all in the habit!

Scripts That Turn “Maybe” Into a Booking

Success hinges on your approach. “Let us know when you’d like to come back” puts the work on the client, and they’re likely to leave it unfinished. You’re better off saying, “You’re due in six weeks. Should I book you in for the same time on Thursday?” An offer with a time frame makes the decision easy, and active requests beat passive requests three to one because they eliminate the work that the client would otherwise have to do.

Resistance is not a stopping point; it is the prompt for your next line. When a client says “I’ll call later,” you cannot accept that and let them drift. Offer a hold they can confirm later, or send a reminder and follow up with a text. This is especially true because the follow-up channel is not equal. A follow-up by text is much more likely to be seen than one sent by email. If you’re going to remind a client to come in, do it by text.

Gift Cards as Off-Season Cash Flow

Gift cards are the unsung heroes of offseason cash flow. Gift cards are sold to bring in cash to address slow seasons. The cards are redeemed later, when the recipients book their service. With gift cards, business can be done even in the offseason, and cash can be collected before the services are rendered. Gift cards even have a bonus that many business owners are unaware of.

Cash Today, Service Later

The mechanics provide a huge advantage to a seasonal business. You collect the total payment when a client purchases a card. The service and its cost, however, happen at a later time. You can run a gift-card push to collect the revenue early and provide the service later during a busier time when you have the capacity to do so. Many salons used this strategy to sell gift cards during pandemic closures. They were able to sell gift cards to keep cash flowing while the salons were closed. The same strategy can be used during any predictable business lull.

An automatic upsell is also a part of this system. When a client comes to redeem their gift card, they usually spend an additional 20 to 30% beyond the card’s value. This also adds a new client to the business. This is not a discount for you; you have actually received the payment to introduce yourself to this new client.

The Breakage Bonus

Finally, there’s breakage, which is the industry term for value that gets sold, but never gets redeemed. Significant portions of gift card balances get neglected. Some researchers have even argued that gift card values that go unspent can even reach twenty percent on average, and that half the consumers have gift cards that were never fully redeemed at any point. In the United States, Americans are holding approximately twenty-one billion dollars in gift card value that has never been redeemed.

Figure 5. A large share of gift card value is redeemed and lifts spend, while forgotten balances become pure margin.

Breakage occurs when customers forget to redeem the gift cards they purchased. Breakage leads to real profit, as there is no chair to staff and no service to deliver. Even though breakage is a great bonus, it shouldn’t be part of a business strategy. A business model that counts on customers forgetting what they paid for is a model built on sand. Breakage will happen on its own, so consider it a gift, and keep your expiration terms fair and legal. Try to design your gift card program so that most gift card customers are repeat customers and spend more money.

Referral Mechanics That Bring Lookalike Clients

Acquiring new clients is costly, and we all know how costly that can be. There is one exception: clients who come through referral. When you have a happy client, and they send their friend to your business, you, more often than not, receive an advance introduction, have some credibility, and can be sure the referred client will be of the same caliber as the client who referred them. That is the secret. The best clients you have in your business usually know people who will be equally good clients for your business as well.

Why Referred Clients Are Worth More

A referral gets around the hardest part of marketing, which is building trust. While clients are still getting to know you, a referral comes to you with an advantage. Statistically, referred clients are worth more than double what an advertising client is worth, and they stay with you longer. In the first year, almost three-quarters of referred clients still visit the salon compared to only four out of ten clients gained through advertising.

Now take that into account with the costs of gaining a client’s attention through advertising. To gain a new client through paid advertisement, it costs between forty-five and one hundred twenty dollars, and in most cases, those clients are one-off visits. A referral is worth a small thank-you gift to you, and provides a loyal client who spends more, and refers again. During a slow business season, to fill more chairs, it is better to prompt for referrals than to advertise.

An Offer That Rewards Both Sides

The most effective referral programs reward both the referrer and the new client. Without a mutual reward system, it can feel as though you are using your client to advertise. The system with a reward credit for the referring client and a bonus for the new client makes the referral feel generous instead of a business transaction. The client looks good, and the new client is not coming into the business with the feeling of being sold to.

Keep the reward tied to something that pulls the new client in more, like a credit that goes toward a future visit instead of a discount on the first visit. This solves the deal-seeker problem with the added benefit that the reward only takes effect if the new client decides to come in again, and the loyal client is not left with the feeling of having planted a business transaction. Instead, the loyal client is rewarded for the relationship that they helped to establish.

Win-Back Texts for Clients Who’ve Drifted

Every salon has clients that stop coming for no reason. Most of the time, they’re not even unhappy with the service. Clients sometimes just get busy with the things going on in their lives and start coming in less and less often. Drifted clients are the most overlooked asset for any business. This is because clients that have drifted know the business and the people that work there well, and they’re the easiest clientele to get back. A single, good, well-timed text to a drifted client can get them coming back like they used to.

Timing the Nudge

You want to identify silence before it turns into a habit. If a client has been coming every six weeks, then starts drifting and comes back ten weeks later without booking, it signals that they are still coming, but drifting away. That is the time to give the client a gentle nudge. If you wait a year to give them a nudge, then you are competing with many other salons that they have gone to. To prevent them from forming other habits, it is best to reach out after the first cycle is missed.

Most clients leave because they feel like they have been forgotten, not because of the price. If you reach out to them, you show them that you noticed, and this can help with the recovery process. The recovery process has been showing good results. A good win-back offer recovers twenty-two to twenty-eight percent of clients that have been lost, and this benefit is much greater than the cost of a few automated texts. The texts will be read because they are opened almost 100 percent of the time.

The Message That Reopens the Door

An effective win-back note has an inviting tone and sells softly. It is a reminder to the client that it has been a while since you have interacted, and it makes the return convenient by including a time-based booking prompt. Including a small incentive works to your advantage when it is a value-adding surprise, like a complimentary add-on, and not a discount. It is better for the client to feel missed than that they are being marketed to.

Automating the Win-Back Text

Vagaro

Reaching out to all clients to win them back is where most people fall short. Tools like Vagaro automate win-back messaging by identifying clients who’ve missed their usual rebooking and allowing you to send a custom message. Rather than thinking about win-back, you can focus on other high-impact tasks. Scheduling and messaging are critical, but the real value is when the messaging maintains the human touch. Consistency in messaging that is targeted to clients at risk of leaving is worth far more than a one-time, elaborate campaign.

A Slow Season Promo Calendar That Protects Price

Tactics serve a purpose, but a calendar protects those tactics. Without a calendar, your clients learn that a sale is always just around the corner. Work your tactics against your actual valleys, rotate them to avoid permanence, and you fill the gaps while your full price is maintained the rest of the year.

Map Your Valleys Before You Fill Them

You cannot fill a valley you have not measured. Step back and review a year’s worth of bookings and identify the real demand lags. Which weeks, days, and hours have bookings consistently low or nonexistent? Most salons notice their dips become predictable from the post-holiday stretch in January, low summer bookings due to vacation travel, and the absence of business during the middle of weekdays. Getting specific about your low demand intervals allows you to create targeted offers to fill those gaps. Discounts to fill time slots that would sell anyway become unnecessary.

Figure 6. Match each tool to the valley it fills so no single offer ever becomes the everyday price.

Having the map means each tool can find its right place. Prepaid packages and gift card pushes work well during the long post-holiday slump when customers have less cash, but you still need revenue coming in. Off-peak deals help you during the year-round slow midweek and midday periods. Referral campaigns and win-back texts are the best forms of promotions to do just before a slow period to help fill the calendar before it becomes empty. It’s all about the placement, so every promotion is targeted to a weakness instead of covering the entire business.

Rotate Offers So None Becomes the Norm

The problem with any promotion that recurs is that clients come to expect it. A referral bonus that is offered all year long is no longer special. A standing midweek deal eventually is what your clients now view as your regular price. The way to defend against this is through rotation. If you run a gift card push followed by a membership drive, no single promotion will be in place long enough for clients to reset their expectations.

With rotation, each promotion feels fresh. Clients are excited to see a new offer instead of tuning out a banner they have seen for months. Your rack rate stays fixed and visible, and every promotion is designed to lead clients back to full price.

This is the goal with the slow season calendar. The promotions pull revenue and demand into the gaps, and through all of it the rack price never changes.

Conclusion

The slow season is not a discount problem. Thinking of it this way is why salons have a hard time selling services. Blanket markdowns lead to selling discounted services to clients you would not earn repeat business from, while the real lost revenue comes from the 68% of clients who leave because they feel forgotten. Solve the 68% problem, and clients will start filling your appointment calendar without you having to do anything else. The ideas in this guide are simple concepts that address your gaps in appointment demand and make a future time appointment easier to sell to a client, all while maintaining your current pricing.

The key to solving the problem is the order of operations. Move away from the across-the-board markdowns and instead make time-sensitive offers to fill gaps for specific time slots. Bring future cash into your salon with prepaid services and sell them at a discount to increase business loyalty. The rebooking ask at checkout is the most important habit; no other solution returns so much for so little time. Focus referrals on bringing in your ideal, most profitable clientele, and use win-back texts to recover the clients you have lost and want back in the salon.

Use scheduling to set boundaries on discounts that focus on appointment gaps, and keep rotating to stop stagnation and increase business bookings. The slow season is not a discount problem. It is lost potential time that the business could be earning income. You can easily fill appointment gaps and increase your business bookings without discounting your services.

Frequently Asked Questions

How do salons fill slow days without discounting everything?
Instead of discounting everything, aim the value at the gap. Focus on midweek time slots. A time-limited offer that fills genuinely empty slots during midweek can move flexible clients to your valleys, while keeping your busy weekend slots at full rate. Rather than a standing sale, fill unpredictable last-minute cancellations with same-day openings. Prepaid packages, rebooking, and win-back texts raise demand on top of that. Get the sale rather than training your clients to wait for a discount.
Do memberships work for small salons and spas?
The empty chair becomes a much larger revenue loss for small businesses, since they have fewer customers. In this case, the small business is the salon. Hair salons do not have complex business structures with many employees, so they can operate most efficiently with steady prepaid revenue. It will actually make your business simpler. Just one reasonable offer can help your salon thrive! Consider creating a “single blow-dry” offer or a planned “visits per month” prepaid color packet. A membership makes your customers much more loyal. Set the per-visit price of a prepaid color plan just below your walk-in color price, and require enough visits, three or more, for the commitment to pay off for both sides.
How do I get clients to rebook before they leave?
When you’re at the chair, ask to book them for the same day and time in the next booking period. A question like, “You’ll be due in six weeks. Shall I book you for the same Thursday?” is better than a “call us when you’re ready” response. If there is hesitation, don’t allow them to leave without booking. Hold the date and send a reminder text. You can expect a revenue increase of fifteen to twenty percent for a ten-point increase in rebooking. Making the ask a habit for all stylists is one of the highest revenue-impacting asks.
What’s a good referral offer for a salon?
Both your client and their friend deserve a benefit that enables the introduction to be perceived as a generous act instead of a business transaction. The current client will receive a credit for their next appointment, while the friend will receive a welcome bonus, which is an incentive given at the business’ discretion to the friend that will be received during their second appointment. This is a clever way of ensuring a return client, instead of a one-time bonus-seeking client. This is further incentive to create a referral program, as compared to other methods of acquiring clients; clients obtained through referrals are typically more valuable, as approximately seventy-four percent of referred clients remain active with the business at least a year after their first appointment.
How can a spa boost revenue in the off-season?
Bring in cash sooner and add value to your current clientele. You can sell gift cards to create instant revenue for services that you will provide in the future when your business is busy. When customers redeem a gift card, they tend to spend more than the redeemable amount, and any remaining value on the card is profit. Gift cards and prepaid memberships help improve cash flow and guarantee revenue, while automated texts to former clients help bring back clients that you’ve lost. Identify the weeks your business is slow, create a specific offer to bring clients in, and rotate your offers to help keep your prices intact throughout the year.

Local SEO in the AI Overviews Era: Fast Wins for Service Businesses

At 9 PM, a homeowner’s kitchen sink begins to leak. This homeowner doesn’t open ten tabs like everyone else. Instead, they search for “emergency plumber near me.” Often, they don’t even bother to click a result when an AI Overview supplies them with three local plumbers from the map pack. If you aren’t one of the three businesses, then you don’t exist to this homeowner.

This is local SEO in the age of AI. The first answer to a large percentage of local queries is now being written by AI. Local SEO AI Overviews are now dominating local queries. The businesses appearing in AI Overviews are exclusively the businesses that rank in the traditional map pack. In fact, practically nothing has changed regarding what drives local visibility. Being local is more cutthroat than ever. Businesses that implement the basics of local SEO are gaining prominence, while the majority of businesses are becoming less visible as the query is answered without them, completely out of their control.

This guide shows service businesses from trades to professional services where and how to begin to implement local SEO in the area where they work to gain the competitive advantage over other local services that do the same.

What Changed: Local Search in the Age of AI Overviews

When watching Google Search Results change, one key thing to note is that AI summaries have taken the prime real estate on listings. Google’s AI Summaries are already showing up on most searches, and data from most affected industries are showing drastically reduced click rates to listings as AI Summaries are providing the information.

This is understandably a problem for Local SEOs, but at the same time, Google AI Summaries create the outputs from the same inputs as a Google Business Profile: a good amount of customer reviews, a good amount of local citations, and a good amount of on-page content.

AI Overviews do not create a separate ranking system with its own rules. They have created a new interface that is layered on the same trust signals that local searches have always been reliant on. The businesses that have AI Overviews created for them are the businesses that dominate the local searches map pack.

One study that has been widely referenced on restaurant searches has found that businesses that ranked in the top three of the local searches were referenced in AI answers 25.9% of the time. It is worth noting that the other local businesses did not receive any references at all. This completely changes the conversation. The reward for excellent local SEO is AI visibility, and not having to learn a new skill.

Figure 1: Local pack rankings feed directly into AI Overview and AI Mode visibility.

Does Google Business Profile Still Matter with AI Search?

Google Business Profile (GBP), previously called Google My Business, powers the map pack, the knowledge panel, and a lot more when AI Overviews suggest a local business. It is the most powerful tool for local SEO, especially for small businesses in the AI era. As of now, recent industry surveys estimate that GBP signals account for 32% of local pack ranking factors, compared to on-site SEO, local reviews, citations, and behavioral signals. In other words, GBP signals are more important than any other single factor.

There is no more denying the importance of GBP for local businesses. It is the core of local SEO, and businesses must complete every field of the profile to achieve the best performance in the local SEO sphere. This means businesses must choose the most appropriate business category, complete every field of service and product listings, add and update business hours, add real photos (not stock photos) of the business, and update the profile regularly. AI pulls structured data to answer queries. If GBP is incomplete, AI will overlook the profile and the business will lose traffic to other businesses with complete profiles.

How Do I Rank in the Google Map Pack?

For a long time, Google has explained map pack rankings in terms of three areas: relevance, distance, and prominence. Of these three, distance, aka proximity to the searcher, is the most important and is also something that cannot be adjusted with any amount of SEO. This is because distance (or proximity) relies entirely on the location of the customer at the time of the search.

Relevance is determined by the Google Business Profile search query match, hence the importance of the correct Google Business Profile category selection. A general contractor (who has the Google Business Profile category of ‘contractor’) will lose visibility to the contractor (who has the Google Business Profile category of ‘plumber’) when someone searches for plumbing-related services. Rounding out the three is prominence: the combination of review volume and quality, consistency of citations, on-page website authority, and behavioral engagement (clicks, calls, requests for directions, etc.).

Whitespark’s Local Search Ranking Factors Survey

Since proximity is not something you can optimize, a smart small business local SEO strategy focuses on what a business owner can actually control: profile completeness, category accuracy, review velocity, citation consistency, and website content that is relevant to the area. Whitespark, a local search data and software company, conducts an annual survey of a few dozen top local SEO professionals to see how much impact each of these factors has. Below is a chart that shows some relevant data from their 2026 report.

Figure 2: Approximate weighting of controllable local pack ranking factors, based on Whitespark’s 2026 survey of local SEO experts.

Two outdated tactics to be discarded in local SEO are geotagging photo files and Google Post keyword stuffing. There are no measurable ranking advantages of either in controlled tests. One study that tracked 441 keywords over nine weeks found no ranking movement related to Google Business Profile Posts. Focus on the SEO fundamentals instead of wasting time on these tactics.

How Many Reviews Do I Need to Rank Locally?

You can’t really pinpoint the magic number of reviews needed to enter a map pack, and the data reflects that as well. Take review signals; they account for approximately 16 to 20 percent of local pack ranking weight, and that number is expected to grow. What affects the ranking the quickest is review velocity, which is the steady influx of reviews as opposed to a singular focus.

Google can’t tell that a business is popular now if all of its reviews are from the past; a business that is popular in the present will be consistently active. Response rate is included in this as well. Businesses that respond to at least 80 percent of their reviews are likely to experience a boost in ranking, and the responses shape the AI Overview for the business as well.

Each review has its merits as well, but a review that mentions a specific service in the area and a detail about the experience itself is way more helpful than a standard five-star review. Google’s algorithms will definitely lack information if you are only relying on five-star reviews. The sweet spot for most service businesses is a review every few days; anything more is unnecessary. Most consumers consider reviews that are older than three months to be stale, and that notion only adds to the review generation urgency. Review generation should definitely be a long-term business goal.

What Are Local Citations and Do They Still Help?

A local citation refers to an instance where a business’s name, address, and phone number (NAP) are published on a third-party website (for example, a directory or an industry website). There are many examples of local citations, and some include: Yelp, Bing Places, industry-specific directories, and listings for chambers of commerce. Agencies have included hundreds of citations as part of their local SEO strategies, and the volume-first approach used to be the most common. Recent evidence suggests that around ten authoritative, industry-relevant citations outperform fifty scattered, low-quality citations.

The importance of local citations has not diminished; however, they do not carry as much weight as before, and now the consistency of local citations is more important than the number of local citations. Inconsistent NAP information can confuse Google and AI in determining if a business truly exists.

Citational importance has been updated due to AI search innovations. When tools like ChatGPT are asked to recommend a business to fulfill a user request, they first compile the answer from multiple citations. This creates a need for local businesses to be listed on industry “Best of …” lists, reputable industry directories, and Bing Places, to name a few. Optimizing local citations for AI search now has more value than before. The process of fixing and improving local citations is simple. Focus on one or two high-value, industry-specific directories, and eliminate duplicates and inconsistencies.

How Do I Optimize for “Near Me” Searches?

In terms of local intent, “near me” searches may be the most lucrative behavior pattern for small businesses to tap into. The great thing about “near me” searches is that they indicate the searcher is only hours away from making a decision and taking action, as opposed to weeks. When a person searches “near me,” the goal is to make sure every signal you can control confirms your location. This starts with an accurate and verified business address on your Google Business Profile (GBP), consistent NAP (name, address, phone) details within each citation, and location-specific pages on your website instead of a generic service area page.

Although service-area businesses may not have a public storefront, they should follow Google’s direction on concealing their address while providing their service area. Controlled experiments have shown that service areas do not impact Maps rankings for businesses with an actual address. What is most important is the verified address that the profile is centered around.

Moving beyond the profile, the best visibility for “near me” searches comes from hyper-local content. This can include city and neighborhood landing pages, a Google Map (embedded), testimonials that are related to the area, and organic mentions throughout the page of the landmarks and service zones. The speed of the webpages on mobile can also impact visibility, considering that the vast majority of “near me” searches take place on mobile devices, and often from the person standing right outside your business.

An overwhelming number of consumers search for businesses on their mobile devices and then visit the business within the next 24 hours. A page that doesn’t load fast or an outdated address doesn’t just lose a click; it loses a customer.

Winning Visibility in Local SEO AI Overviews

AI Search Tools: Google AI Overviews, AI Mode, ChatGPT & Gemini

AI Mode, Gemini, and ChatGPT are clearly different from other search tools in that they summarize web content and extract information from structured data to answer questions rather than linking to web pages. AI crawlers will find answered questions much more easily than marketing copy. This is because clear, concise answers are much more helpful than brand voice marketing copy that requires interpretation. Plain language content that directly answers customer concerns is much more effective than vague marketing copy because systems that summarize web pages are clearly designed to distill text down to the most specific and concise answer.

The latest studies examining the local business recommendations of tools like ChatGPT indicate that first-party testimonials on a business’s website now carry more influence. Unlike past AI tools, ChatGPT and the AI tools that will be developed in the next few years will probably rely on business homepages and not service pages as primary source texts.

As a result, business homepages will need to be an engaging and high-quality way to communicate business information. This will also not negate efforts towards local SEO. This will be an addition to local SEO. Because of this, businesses that have been generating legitimate trust signals will be rewarded, rather than businesses that have been manipulating a ranking algorithm.

Fast Wins to Prioritize This Month

Filling in every section of a Google Business Profile and correcting the primary category is an example of the highest-leverage activity for a business in its infancy. The next highest-leverage activity is creating a system to request a customer review in the first 48 hours post-purchase. Additional activity that follows this level of leverage is resolving inconsistent NAP listings in local citations and either improving or tightening 2-3 high-authority directory listings. This also means making a dedicated landing page for the city or neighborhood that the business serves, and placing LocalBusiness schema markup on those pages.

This makes it much easier for an AI to parse and understand the business information for a local search. Each of these steps can be completed in under a day and doesn’t require a redesign or major investment. Most can be done in an afternoon.

Figure 3: A quick-reference sequence of fast local SEO wins for service businesses.

Conclusion

Local search isn’t more complicated to understand. It’s just more punishing to those who cheat the system. AI Overviews are a good local SEO report card. They reward businesses that have good local SEO, such as a complete Google Business Profile, consistent targeted reviews, and steady citations and content that are focused on local customers.

Those businesses will land in the map pack and get cited in AI answers. The fundamentals take time to implement, but they pay back over time. The Google Business Profile and steady reviews are the most important things to focus on. Once those things are done, the rest of the local SEO for small businesses becomes a lot easier.

Frequently Asked Questions

How do I rank in the Google map pack?
Map pack rankings are determined by relevance, distance, and prominence. Of these three factors, distance is the only factor you can’t control. You can influence the other two, relevance and prominence, through four areas of focus. Ensure your Google Business Profile is optimized and includes a detailed business category. Additionally, obtain thorough reviews regularly, and maintain consistent citations and focused content on your website. Businesses that focus on all four areas will see the fastest and most sustainable results for gaining placement in the top three Map pack rankings.
Does Google Business Profile still matter with AI search?
Yes, probably now more than ever. Business profiles on Google have the potential to influence 32 percent of the local pack ranking. AI Overviews use business profiles to help them decide which businesses to showcase. A profile that is complete, accurate, and actively maintained offers traditional search and AI-generated answers something dependable to cite. An incomplete or outdated profile offers them nothing; thus, the business is overlooked in preference to a competitor with more extensive information.
How many reviews do I need to rank locally?
A definite number of reviews does not exist that will secure a boost in rankings. What is most important is review velocity. This means a steady flow of reviews over time with little to no gaps as opposed to a large number of reviews all at once. Coupled with a consistent answering of reviews, this is most favorable for rankings. Reviews that provide detail and are specific to a location and service are preferred over vague, generic five-star reviews. For most service businesses, the goal should be to secure a review every few days with no end in sight.
What are local citations and do they still help?
Local citations are listings of a business’s name, address, and phone number on online directories and external sites (such as Yelp and Bing Places). Local citations now reflect the quality of the listings and have become less effective with the proliferation of third-party sites. About ten citations from authoritative and relevant industry sources will outperform fifty citations from low-quality directories. Maintaining details of your NAP (name, address, and phone number) is still essential everywhere they are published, since various search engines and AI tools will be confused if there’s a lack of consistency in what is perceived to be a legitimate business.
How do I optimize for “near me” searches?
Optimizing for “near me” searches needs a correct and verified Google Business Profile address and consistent NAP info across the web and separate landing pages for every city or neighborhood served, rather than a single service-area page. Dedicated pages will help you rank better. Mobile page speed needs to be swift as well, since most “near me” searches are made from mobile devices by customers who are ready to buy. All of these signals work together to assist Google and AI search tools in correctly associating a business with a searcher’s location and intent.

Retention Over Acquisition: Loyalty Tactics for the Value-Seeking Consumer

You received a silent dismissal from a good customer. They got a better deal elsewhere. The revenue went away like a slow-moving leak. In a price-sensitive market, it is worse than ever before.

79% of customers trade down. Over half say they look for discounted prices for every purchase they make. While many business owners have good reason to be afraid of this, a price-sensitive customer is not a disloyal customer. They are asking for your proof of value. Businesses that answer this question are the most successful. Those that ignore it are the ones losing customers.

This guide contains a better way. It has time-tested techniques for customer retention that you can implement with little-to-no budget. You will see the true value of a customer. There is a walkable path to loyalty programs that cost you and your customers next to nothing and deliver real value to them. You will be able to start this and other retention best practices in the coming 60 days.

Why Customer Retention Beats Acquisition When Consumers Are Cautious

Caution influences how people shop. As money feels tight, shopping habits slow. In fact, many shoppers report putting off purchases over the next three months. Shopping occurs more intentionally, with increased price and brand comparison. This means shoppers have higher skepticism of brands.

This is the most challenging phase of customer acquisition. The newly skeptical customer has no reason to trust you and is likely comparing competing offers, which means you spend more to acquire them, with little or no return.

While your new customers have no experience with your company, your existing customers are more likely to trust you with their money again. Most owners do not view this trust as an asset. The statistics of selling to an existing customer versus a new customer are in the owner’s favor. The chances of selling to an existing customer are between 60% and 70%, while the chances of selling to a new customer are between 5% and 20%.

Figure 1: You are far more likely to sell to an existing customer than a new prospect.

This flips a few logical assumptions of marketing in a more cautious market. The more expensive game is the acquisition of customers. Taking the time to build stronger relationships with existing customers is the more cost-effective option. Customer retention is not a defensive marketing move; it is the most cost-effective marketing strategy.

There is a loyalty angle with the marketing psychology of value-seeking. Brands that build trust and reward their customers don’t see a large turnover in their customer base. Almost 79% of Millennials are brand loyal when a brand has a strong loyalty program. The distinction between a deal-seeker and a loyal customer is thin, and it can be the same person. The organization just has to provide an incentive for both.

The Math: Cost to Acquire vs Cost to Keep

Retention numbers seem too good to be true on the surface. Let’s go through the numbers step by step.

Generally, you can expect to pay five times as much to acquire a new customer compared to the cost of retention. This should be a good enough reason to shift how you allocate budget. Very few budgets reflect this as they continue to prioritize the top of the funnel to the detriment of the bottom.

Figure 2: The cost of acquiring a new customer versus keeping one you already have.

Now consider profit because this is what is most important. Increasing customer retention by 5% improves profits by 25% to 95%. No, that is not a mistake. A slight increase in retention has an incredible benefit to profitability. Compounding is the reason for this. A customer that has been retained will purchase again, spend more, and will be less expensive to sell to again.

Figure 3: A 5% lift in retention can raise profits by 25% to 95%.

The spending gap is a phenomenon where current customers spend around 67% more than new customers. Simply put, loyalty builds deeper relationships and an even deeper wallet. About 65% of a company’s revenue comes from previous customers. Most owners evaluating retention programs focus on the cost and look away from the value.

Repeat customer marketing is where you see the potential of this value. Repeat customers need no advertising to get them to buy again. You are just reminding a friend that you are still there, which makes retention revenue the most cost-effective revenue there is.

A Loyalty Program That Runs on Your POS, Not a Separate App

Here’s how small businesses tend to fail. They create a loyalty program within a separate app. Customers must go through the hassle of downloading the app, creating an account, and remembering to use it. Spoiler alert: they don’t. The friction of having a separate app kills the program before it has the chance to start.

The solution is easy. Manage your loyalty program through the point-of-sale system you use every day. Your point-of-sale system recognizes who purchased what and when. Associate their rewards to a phone number or email. Done. No separate app. No friction. The customer just has to say their number and poof! Rewards.

This is even more important to a value-seeking shopper. The top reason people join a loyalty program is for a discount. In fact, 58% of loyalty program members said they join to receive program-specific savings. A point-of-sale-driven loyalty program gives savings to the customer at the moment of interest, which is when they are checking out.

The results speak for themselves. Loyalty programs, when executed correctly, tend to generate an increase in gross sales by 12% to 18% for the business. And, loyalty programs are welcomed by shoppers. 57% of shoppers tend to spend more money with a business they feel loyal to. It is potentially the best investment a business could make.

Square Loyalty

Square Loyalty exemplifies a POS-first system. It integrates directly into Square POS, which is utilized by numerous cafés, salons, and retailers. Square Loyalty allows customers to enroll at checkout using their phone number, so there’s no need for a separate app. Customers earn loyalty points automatically at every visit, and rewards are applied at checkout. This effectively eliminates the two biggest barriers to loyalty programs, cost and complexity, for small businesses. The data Square Loyalty captures integrates directly into the customer records, which sets up everything for the next section.

Using Purchase Data for Relevant, Low-Cost Offers

Once your POS system records the data associated with your customers’ purchases, you know the details of every customer purchase. You know the frequency of their visits. You know how much they spend. This data is highly valuable to any company. This is how your company markets itself at the lowest possible cost.

An offer is cheap and effective when it is highly relevant. A 20% coupon shared with the masses is expensive. Sending a small, carefully crafted offer to a customer is a much better investment. One example is the customer who buys coffee every Tuesday. Offering a free pastry on a slow Thursday will result in an additional purchase, at a cost of a single pastry to your company.

You are not expected to provide the lowest-priced goods. You are achieving the extraordinary by selling the perfect item for a customer, at the perfect time. This creates loyal customers. Poorly executed personalization will drive your customers away. About 39% of customers will stop buying your goods after a poorly executed offer.

The best part is that you will be marketing your products at a very low price. Entering a customer’s data and contact information is the bulk of the work. A carefully crafted email or text to your customer is your lowest-priced ad to date. This is highly valuable compared to the hundreds you lose on ads targeted to cold customers, who have never heard of you.

Win-Back Flows for Customers Who’ve Gone Quiet

Some customers will inevitably leave, and that’s to be expected. The real error, however, is not attempting to keep them. Before they’ve really left, that’s your opportunity to launch a win-back campaign.

Begin by defining ‘quiet’ for your business. Most commonly, customers who have not purchased anything within the last 3-6 months have become dormant. This should be your cue to take action, and looking at your point-of-sale data will help you identify them with ease. As soon as that purchase gap occurs, that’s your cue to begin reaching out.

When crafting your outreach, warm is the tone to take, while desperate is not the tone to take. Lightly acknowledge the absence, and then remind the customer why they liked you in the first place. As for your pool of lapsed customers (also called dormant customers), typically this group is about 3-5 times larger than your active customers, so you can expect that even the smallest incentives will yield a substantial impact.

Figure 4: A well-run win-back program recovers a meaningful share of inactive customers.

The expense is worth it. Well-designed reactivation efforts return 12 – 20% of old customers. Top-tier reactivation efforts return 20 – 35%. The tight-budget-friendly part is that lapsed customers are five to ten times cheaper to win back than new customers are to acquire. The trust that had to be earned for each new customer has already been built.

The exact timing of the attempt to win back the clientele also matters. Attempts at re-establishing communication or a relationship that are too late will result in a permanently cold relationship. The ideal time for reaching out is approximately 120 to 180 days of silence. After that, most people will have no interest in your attempts to reach out. Build the plan, set the trigger, and allow it to operate in the background.

Surprise-and-Delight That Costs Almost Nothing

Discounts aren’t everything. The tactics in this section are largely free. One of these tactics involves exceeding expectations. This tactic is called ‘surprise and delight’.

Think about the last business that surprised you with an act of kindness. Did a barista remember your name? Did a shop give you a free sample? That small act means a lot. It creates a relationship, and relationships are what bring loyal customers.

This tactic is quite inexpensive. Two minutes and a stamp for a note. Free for a text. Remembering a regular’s order costs attention. To the business, these gestures are nothing. To the customer, it’s incredible.

This tactic works for emotional reasons over logical ones. People easily forget prices. People more easily remember good acts. One of these good acts will help someone forget about a higher price. In a market where 33% of customers will leave after one poor experience, the opposite also holds: one good act can keep a customer for years.

Measuring It: Repeat Rate, Frequency, and Lifetime Value

You can’t evaluate the success of something you can’t quantify. Retention has three key metrics. Each one describes a different dimension of the story. Collectively, they reveal the success of your loyalty strategies.

Repeat Purchase Rate

The repeat purchase rate refers to the percentage of your customers who make a repeat purchase. It’s your simplest form of a health check. A growing repeat purchase rate signifies that your work on customer retention is effective. On the other hand, a low, flat rate of repeat purchases indicates that customers have sampled your offerings and have not returned. Track this rate on a monthly basis and observe the trend rather than the value.

Purchase Frequency

Frequency is defined by how often a customer purchases a particular time interval. Loyalty is stronger when it not only brings a customer back but brings them back more frequently. If your frequency is on the rise, this means you are successfully sending reminders and rewards to your customers. A coffee shop that successfully converts a customer from making a weekly visit to a daily one has been able to multiply the value of that customer without incurring any expense on advertisements.

Customer Lifetime Value

Customer Lifetime Value (CLV) is an important measure of the profit attributed to the entire future relationship with a customer. It provides a clear justification for the value of customer retention. As your repeat purchase rate and purchase frequency increase, so will the customer lifetime value. A higher customer lifetime value justifies the money spent on customer loyalty programs. It communicates the maximum investment a company can spend to satisfy and retain an individual customer. An increasing customer lifetime value indicates that the customer retention and loyalty strategies are successful.

A 60-Day Retention Plan

Action is the true measure of any strategy. This plan outlines a procedure over the next two months to enable the execution of that strategy via sequential steps of setup, outreach, and measurement.

Figure 5: A simple 60-day path from setup to win-back to measurement.

The first two weeks are for groundwork. Enable loyalty options in your POS system. Educate your staff on how to request phone numbers for each transaction. Begin documentation of contact info for customers who consent. Groundwork like this should never be expedited as it lays the foundation for everything that follows.

Weeks three and four are for the application of groundwork. Analyze purchase patterns and frequency of purchases. Create a couple of basic offers that align with those patterns. Start small and offer to this customer segment through email and SMS. Wait for feedback and adjust based on what you learn.

Weeks five and six are for the implementation of the customer re-engagement process. Identify customers who haven’t purchased in the last three months. Develop an offer with a friendly tone. Email and SMS this offer. Measure the return rate. The re-engagement process often pays for itself with the first few redemptions.

The last two weeks are for learning. Measure the repeat purchase rate and the early customer lifetime value. Measure the success of offers. Eliminate offers with dismal response rates. Retention should be measured frequently as an ongoing process.

Conclusion

Your customers looking for the best deals are not your enemies. They show you how much value you are providing. Advertise to them through costly ads and meaningless discounts, and you will come up short. Provide what they need, when they want it, with genuine value, and they will be your customers for many years.

The math has been simple for a while, and you have probably heard this expression. It costs more to find a new customer than it does to keep an existing one. A slight increase in customer retention will lead to a much larger increase in profit. Your clients have already made a purchase, trust you, and you possess data about them. There is no need to search for a client in the cold market. The client is right in front of you when you make a sale.

Most of these ideas are inexpensive. They just need a little more thought. A loyalty program on your POS with a couple of good offers, a short note to win back, and a small act of goodwill will surpass most acquisition campaigns. Try the 60-day plan first. Keep an eye on your numbers, and you will see your quietest customers start to spread the word. Retention is not risky. It is the best strategy in today’s market.

Frequently Asked Questions

Is it cheaper to keep a customer or get a new one?
It’s cheaper to keep a customer than to get a new one. It costs five times more to get a customer than to keep one. That five times more cost is due to trust. When a customer has no trust in you, you have to spend on marketing, offers, and time. With an existing customer, you don’t have to spend on trust, and existing customers have been shown to spend over 67% more than a new customer, so the retention efforts you have with your existing customer bring more value than the efforts you spend on gaining a new customer.
What’s the simplest loyalty program for a small business?
The easiest loyalty program runs on the same point-of-sale system you already have. There is no app to download. Customers enroll by providing their phone number during checkout. Customer loyalty points are created automatically on each visit. Customer loyalty rewards are redeemed at the register. This removes barriers that compromise most loyalty programs. It is inexpensive to operate and collects valuable purchase data at the same time. It is almost always the best option to use a POS-based program for a small business.
How do I win back customers who stopped coming in?
Start by identifying them. If a customer has become quiet and hasn’t bought anything in the last three to six months, reach out to them with an honest, warm message before it’s too late, in the next 120 to 180 days. If you take too long to send a recovery message, it will become increasingly difficult to win the customer back. When reaching out to them, be sure to remind them why they liked your business and provide them with a small, enticing offer to encourage them to return. A successful recovery campaign will get back 12 to 20% of the customers, and top-tier campaigns get back 20 to 35%. Additionally, a recovery win-back campaign will cost less than 20% of the total expected cost of acquiring a new customer.
How do I measure customer retention?
While tracking metrics, you’ll want to focus on three numbers. The first is the repeat purchase rate. This metric is the share of customers who make repeat purchases. The next is purchase frequency. This metric considers the time interval in which customers make repeat purchases. The last is customer lifetime value. This metric considers the potential total profit that can be gained from a customer over the entire business-customer relationship. You should track these metrics on a monthly basis. The trends are what matter. An increase in the repeat purchase rate and the purchase frequency will cause an increase in the customer lifetime value. This value increase suggests that the business’s customer retention strategy is successfully gaining repeat customers and is a strategy worth keeping.
Do loyalty programs work when people are cutting spending?
They could be even more important than ever. Value-seeking is not disloyalty. Actually, 58% of shoppers engage in loyalty programs to get discounts, and 57% of shoppers spend more money with the brands they are loyal to. When money is tight, loyalty programs that deliver value give shoppers reason to pick your brand over cheaper competitors. The most important element of a loyalty program is relevance. When rewards are relevant to customer habits, the price-sensitive customer will have a higher likelihood of shopping with your brand repeatedly.

Booked Solid by December: How Home-Service Pros Can Fill Their Winter Schedule

Things go quiet in October. The summertime rush is done, and the winter booking and emergency calls have yet to begin. This is the most stressful time of the year for most home service pros. The trucks are parked, the techs are just watching time pass, and cash flow is about to hit its worst stretch right before the holidays. You are not imagining it, the market really has gone quiet.

This part is important to understand. Winter bookings are not won in winter. They are won in the fall. The customers that keep you busy through December make their choice long before and get on the schedule for a winter prep service or a maintenance plan (or at least save you in their contacts) before the first winter weather sets in.

This is your fall opportunity. What you’ll learn in the rest of the guide is how to use this season in home service marketing to fill your schedule up well in advance of the slow weeks. Throughout the guide, you’ll learn about the winter prep service campaign, the maintenance plan, the review engine, financing, online booking, local visibility, and more. You’ll have a plan for each fall-to-winter season for years to come.

Figure 1. The fall-to-winter playbook: eight levers that keep the calendar full.

Why Winter Bookings Are Won in the Fall

Recognizing the seasonal nature of demand will help you tailor your customer experience and marketing efforts to enhance demand for your installations and services. Understanding the natural operational cycle (peak demand, slow demand, and shoulder seasons) of your business will allow you to plan and schedule calls in advance (e.g., during slow-demand periods, schedule calls for peak-demand periods). The slumps in demand will have varying lengths depending on your location (geography).

During July, homeowners are not thinking about their furnace. They are thinking about their furnace (and probably needing the assistance of a contractor) on the first cold morning of autumn, winter, and early spring. If you wait to market until that morning, you will find yourself competing for business with every other contractor and tradesperson in town. Based on recent estimates, the demand for search-based HVAC services has increased approximately 20% per year, with intense spikes following drops in temperature. The cost for those searches also increases during the peak demand periods.

The Demand Curve That Catches Pros Off Guard

Most owners consider a slowdown to be a negative. In reality, it’s an opportunity. Other businesses are also experiencing a slowdown, so they are working less on promoting themselves. That means that, for the majority of the year, this is the cheapest and least competitive time to contact a homeowner. An advertisement published in September will be less expensive and more effective than one published in January.

There is also a behavioral reason to act fast. When a homeowner finally needs a service, they are rarely loyal to any one company. 84% of people do not have a company in mind when they are searching for a service. The professional who gets the potential client’s attention first will not have to deal with the competition. Fall is the ideal time to get your name out there.

Turning a Quiet Calendar Into a Head Start

Fall marketing is not about filling this week’s calendar. The purpose is to book the next three months. Every October tune-up you sell means some of your technician time is covered for a slow week later in the winter. Each plan member you enroll means a December visit is guaranteed regardless of what kind of weather you will have to deal with. This strategy is primarily focused on making the trade of a slow or quiet afternoon for a guaranteed appointment later.

The Pre-Winter Tune-Up Campaign

The best fall offer, by far, is the heating tune-up. It addresses a major concern for the homeowner, but that isn’t the best part. Believe it or not, it gives your technician access to the inside of the home before the competition arrives. It also introduces you to the larger conversations about repairs, plans, and replacements. It is the only campaign you will need for the season.

The Offer That Gets a Yes

A tune-up offer is effective because of its size, timing, and precision. It’s a message the homeowner can understand. Set the price as a reasonable and straightforward figure. Give the offer a weather-dependent deadline, such as “before the first freeze.” Instead of offering a technical checklist solution, offer peace of mind and savings on heating bills. Relief from the fear of a broken furnace on the coldest night of the year is what the customer is actually buying.

Do everything to maintain the simplicity of the request. Having too many offers, or too many options on price or timing helps no one, and reduces response drastically. The tune-up offer is the ideal hook, and should be the primary offer.

The List You Already Own

Google isn’t going to have the best audience for this offer. The best audience is your own records. Every customer you have has prior trust in you, has seen your trucks, and has your equipment in their home. The cost for reaching out to these customers is much less than the cost for a cold lead, which is between $153 and $275 in this industry. Just sending a short email and a text will usually book more jobs per dollar than you would get from an ad you run.

Segmenting Past Customers for a Sharper Message

Your messages to previous customers don’t all have to be the same. The client with the system that is eight years old can use the old system replacement pitch. The one you saw last spring for cooling is also a good candidate for a heating tune-up. Prioritize service history and age of equipment, and then you can create a timely message. A furnace that is almost at the end of its life will need a different email than a system that is still under warranty. It will cost you almost nothing and give your best offer to the customers that are most likely to accept it.

Maintenance and Service Plans That Smooth the Slow Weeks

One appointment equals a tune-up. Years’ worth of appointments equals a maintenance plan. This is what you need to transform your seasonal business into a steady business plan. This is the difference between running around for work each quarter and knowing your bookings and appointments are already done.

How a Membership Changes the Math

A service plan is a contract for service that recurs. The consumer is the homeowner. For a small cost, often around $99 a year, the homeowner buys the scheduled service and the perks of being a member. The cost of the plan establishes the baseline for revenue. For a company with 2,000 members, $99 each per year translates to about $200,000 of recurring revenue, and this is before the dollar value of the repairs is calculated. Operators approximate that to potentially earn $1 million in revenue, they need about 500 service plan members.

Positive behavior change is the greater reward. Members increase their spending with your company. Members typically increase revenue for the company by more than two and a half times, compared to customers who are not members. One plumbing company gained a thousand members in one year, and as a result, their company revenue grew from $1.1 million to $3 million. This plan does not just create scheduled service. It enhances the relationship with the customer, and the deepened relationship creates potential future revenue for the company.

Figure 2. Plan members generate roughly 2.5 times the revenue of one-time customers.

Two Visits That Keep Technicians Busy

The true innovation of a plan is its visit cadence. An average membership has two yearly maintenance visits. One visit is scheduled in the spring and the second in the fall. You decide when these visits occur. Because of this, you can purposefully schedule member appointments in your slow weeks, which helps keep your technicians productive when walk-in demand is low. Instead of hoping for a breakdown, you are effectively working a calendar that you filled months in advance.

Members Become Your Replacement Pipeline

There’s a less obvious advantage to the maintenance visit. Since your technician is in the home of each member twice a year, they have the opportunity to find and diagnose problems that worsen over time before the equipment ultimately breaks. Looking deeper into the data over a longer period for a group of members, it’s reasonable to predict that about 8% of systems each year will need replacing. Due to the nature of the business, the system replacements represent big, profitable jobs, and those jobs will go to the company that is already in the home. The membership fees fund the plan, and the big, profitable jobs it uncovers pay for it all over again.

Review and Referral Engines That Compound

Reviews and referrals create trust. A well-established reputation is the best marketing tool because it works 24/7 and builds upon itself. For most local trades, nothing is a better investment than the testimonials from your past clients.

Asking at the Right Moment

Getting reviews is essential. Buyers look for them. Almost 87% of buyers use Google to look at businesses, and about 74% read at least one review for a service company. The service provider who has the most recent and positive reviews gets the click before the call is made.

Getting reviews comes down to timing. The best time to ask for a review is right when the job is done, and the technician is still on site. Make the review request personal and simple. A technician with a simple QR code in their hand will gain more reviews than a simple review request email sent 72 hours later. Make the review request part of every job and watch the reviews pile up.

A Referral Loop Worth Building

Customers will refer you for your services, but usually, you have to ask and make it beneficial for them to do so. An easy referral incentive is to offer both the referrer and the referred friend a discount on their next service. The goodwill will convert to a service booking. Additionally, because the new customer is referred, they are more trusting, so they will book a service with you with less price resistance than you would usually expect. If you implement this throughout the winter, every completed job will continually refer you work, with little to no advertising spend.

Financing on Big Repairs to Stop Lost Jobs

Winter can be harsh on mechanical systems. A furnace breaking during January can quickly lead to an unplanned four- or five-figure expense for a homeowner. Due to a lack of cost-spreading alternatives, many of your customers will delay purchasing your service, or worse, walk away for a less expensive service. Providing financing can help you keep winter business.

Why the Winter Breakdown Needs a Payment Plan

The numbers on offering financing speak for themselves. Deals close about 30% more often when contractors offer financing, and the average deal size goes up by 40% as well. The numbers also show that offering financing is crucial to closing the sale, as about 30% of customers said they would not have bought the product had financing not been offered. When financing is not offered, those larger, more likely-to-close replacement sales are lost to the competition.

Figure 3. Offering financing lifts both close rate and average ticket size.

Presenting Financing Without Pressure

Financing is most useful when offered to the entire customer base, not just to the anxious-looking ones. Just like how car dealerships structure their offer, display monthly payments along with the total cost in all larger estimates. Make it look like a standard situation.

A homeowner who sees a value in the form of a monthly payment is much more likely to say yes to the complete and correct solution instead of the band-aid solution. Financing is not the answer to all problems, and customers who are talked into a payment plan don’t serve your purpose. Rather, you want to help the customer manage the monthly cost of the right solution.

Online Booking Plus Deposits That Lock the Calendar

Homeowners have adjusted to a new norm when it comes to the booking process. Most homeowners nowadays desire the ability to book appointments with the tap of a screen over waiting on hold. If your business requires a call to schedule an appointment and your competitor offers a booking system that allows appointments to be made at midnight, then your competitor will be taking the business.

Meeting Customers After Hours

The data presented is compelling. Approximately 82% of consumers prefer web-based bookings. Additionally, 40% of bookings made through the internet are completed after typical working hours. Companies that allow 24/7 booking receive about triple the number of bookings. Since about 27% of your missed calls are from customers that are unable to reach your company, creating an online booking platform will help regain that lost call revenue. It will also help bring in additional money, with several studies estimating a revenue increase of 27% during the first year of launching the platform.

Deposits That Protect Your Time

While customer-generated online booking creates an easy-to-read calendar, there is nothing to hold a customer to that booking. Luckily, there is an easy solution. Take a small, refundable deposit when a customer books online. This will drastically reduce canceled bookings and will eliminate tire-kickers. It is a safe bet that the customer who booked online and paid a deposit is the customer who will be home waiting when the service vehicle arrives.

This saves the business a lot of potential revenue during the off-seasons, such as winter. No customer means a wasted trip, and the bad weather makes it an even worse loss. Online booking combined with a small refundable deposit drastically improves firm bookings.

A Note on Reminders

This small habit protects your bookings. An automated text reminder sent the day before the appointment helps the customer remember and gives them the option to confirm. Jobs booked online are already showing up at a far higher rate than bookings made by phone. Adding text reminders widens that gap even further. It is a five-minute setup that saves you an empty slot on a cold morning.

Local Visibility for “Emergency Near Me” Demand

Unlike tune-ups, some winter jobs can’t be scheduled ahead of time. Pipes can burst, or your furnace can break at the worst possible time. When this happens, homeowners try to find the nearest plumbing service to help them out the quickest.

First, you want to make sure you show up first when they perform their Google search.

Your Google Business Profile as a Storefront

For a small business, your Google Business Profile is your best place to have a digital footprint. This profile is what shows up in the map results when someone nearby searches for an emergency service. The profile that is most complete and has the most reviews, best pictures, and the most up-to-date information outranks the competition. Since almost 80% of local searches result in a visit or a call to a business, the business that shows up first gets the call before the competition is even loaded. Be sure to keep it updated and respond to any new reviews to improve your ranking.

Content That Answers the Panic Search

The homeowner in crisis is doing something every homeowner does in crisis. They are asking the question, “Why is my furnace blowing cold air?” and “Is a frozen pipe an emergency?” A few pages or short articles on your website that answer these questions would do two jobs. Help you show up in a search, and benefit you by establishing your expertise, even before the call. You do not need a content factory. A page or two a month on real customer questions is more than enough for most local businesses to gain great visibility over a season.

The Fall-to-Winter Campaign Calendar

Strategy remains on the whiteboard without a schedule. The plan is designed so that each piece moves at the moment. Here’s how each lever stacks across fall to ensure the schedule is filled before the cold arrives.

Figure 4. A month-by-month calendar for filling the winter schedule.

September and October: Plant the Seeds

Pre-booking occurs in early autumn. This is when you reach out to your customer list for your heating tune-up campaign and ramp up enrollment for your maintenance plans. This time of year, you can also update your Google Business Profile and request customers from your late summer work to leave you reviews. Because the weather is still mild and your competition is still quiet, homeowners will be more receptive. Each maintenance plan and tune-up you get this season will guarantee a booked appointment for later.

November and December: Capture the Rush

In late fall, seasonal work transitions from planting to harvesting. The tune-ups and plan enrollments you planted in September become booked appointments, and your schedule begins to fill for the holiday season. Your financing program becomes the payment method of choice for large estimates as the first cold-weather breakdowns begin to occur. Your online booking, along with your local search visibility, is sufficient to fill the spots left by emergency breakdowns and pre-booked scheduled maintenance. Your referral program turns your happy winter customers into your next winter customers. By December, your schedule is as full as it was during the summer rush.

Conclusion

The off-peak season presents an issue, and all issues are addressed through planning. Winter bookings are won during the fall, when marketing is cheap, and homeowners are still making their winter service decisions. The system works easily. Create an advertisement campaign to get winter services scheduled early. Create service agreements that balance and optimize the schedule during the off-peak season and generate demand for high-revenue replacements.

Use an engine for reviews and referrals that builds up and serves your company for free, and offer service financing to tackle cold winter breakdowns to ensure you don’t lose service calls. Add online booking with a deposit to guarantee service on the scheduled date and ensure your service shows up on local search results.

Although individually none of the above actions are revolutionary, the true power lies in executing them together, consistently, beginning in September and ending in December. The scary quiet off-peak season becomes the season in which you book your best year. Choose one of the actions and execute it this week. The customers who will keep you booked this winter are making their decisions to book service right now; ensure you are their choice.

Frequently Asked Questions

How do home-service businesses stay booked in winter?
They book the entire season in the fall. The best strategy combines a heating tune-up campaign for past customers, a maintenance plan for scheduled visits during the slow weeks, and good local visibility for emergency searchers. Financing keeps the large repairs that would otherwise fall through, and online booking and a review engine provide the new demand. When all of these are working together starting in September, the calendar is filled before the cold arrives, instead of after.
When should contractors start fall and winter marketing?
Begin in early fall, preferably September and October, before the initial cold front. This is a slow time of year when competitors have receded, and homeowners are still calm regarding their heating. Releasing your tune-up offer and plan enrollment during this time allows you to schedule appointments for November and December. If you wait until the deep winter to schedule appointments, you will have to spend more for leads and compete with other contractors for the same desperate phone calls.
Do maintenance plans help even out seasonal demand?
Yes, they are one of the best options available. Usually, plans include two visits per year, per your schedule. Place visits during your slow weeks, and you’ll have a reliable baseline of work. Plans level out work that is unpredictable due to the weather, and they build steady income for your business and improve the loyalty of your clients. Your clients spend significantly more over the long run when you compare them to one-time clients. Typically, your clients will spend the most on the major replacement jobs that maintenance visits identify.
How do I get more service-business reviews and referrals?
Request feedback when things are at their best, right after a job and while the technician is still there. Make it easy with a direct link or a QR code on site rather than sending it by email later. For referrals, give an easy incentive to your customer and to the friend they send. Since most people read reviews to select a business, loyal, recent reviews help you the most to get the next booking.
Should I offer financing on large repairs?
Yes, for most home service companies, this is true. A winter breakdown can run into the thousands, and most homeowners cannot pay that all at once. With financing, they can approve the expense, and the company wins with a higher close rate and higher average ticket as the job doesn’t walk away to a lower bidder. Offer a monthly payment plan for large estimates so that cost is not a deciding factor for the homeowner.

Ways to Tighten Your Cash Flow Before the Holiday Crunch

Imagine this: It’s the second week of December, orders are coming in, and your team is working overtime. You expect the numbers to show your best quarter of the year. But your bank account says otherwise. Payroll is due this Friday. Your largest customer has an unpaid invoice that is now over 45 days old. Your suppliers want deposits for the holiday inventory. Do you relate to this? You are not alone.

The holiday season is the period when small businesses experience the highest income and lowest liquidity. The great news is that this holiday cash flow squeeze is not inevitable. This guide is going to show you practical techniques that are going to help improve cash flow for your business before the peak holiday season, helping you to start the new year with money in the bank and not a pile of IOUs.

When the holiday season is approaching, a small business can improve cash flow by implementing these techniques: weekly cash flow forecasting, immediate invoicing, reduced standard payment terms, invoicing via text message with a payment link, early payment discounts, requiring deposits on large orders, collecting through instant payment channels, postponing non-essential purchases, a pre-approved line of credit, and more.

Why Holiday Cash Flow Gets Tight for Small Businesses

Profit and cash flow are two completely different ideas. Profit, at the end of the day, is what is recorded. Cash flow is all about the timing of events. The timing of cash flow, during the holidays, is unfortunately quite bad. The expenses come before the revenue. Inventory is purchased in September and October. Seasonal employees are hired in November. The extra expenses caused by shipping, packaging, and marketing are all sent before the holiday sales come in. Even purchases that are made at retail locations have immediate payment, but business-to-business payment is not as timely. Many corporate clients will hold the payments for 30, 45, or 60 days, and many accounts payable departments will come to a virtual standstill by the end of the year, due to employees out on holiday. The cash flow then turns from a steady stream into a flood going out and a trickle coming in. This holiday cash flow crunch is difficult to deal with, and the intention of the following strategies is to alleviate this problem.

The holiday season cash flow crunch can be most painful because the month of January is typically a slow month in most industries. If you run the cash flow down in December, you are then left starting the new year with cash flow and sales that are both low. The goal of tightening the cash flow is to protect the first quarter of the new year.

Infographic 1: The 90–60–30-day holiday cash flow countdown for small businesses.

Start With a 13-Week Cash Flow Forecast

You can’t solve an issue you can’t identify. The most effective aid for holiday planning is a 13-week cash flow forecast. This planning tool consists of a few simple components. Each week represents a column, and each cash item makes up a row. Some of the cash items include customer payments, payroll, rent, inventory, loans, taxes, and owner draws. The projection will produce your expected account balance for the end of each week over the next 13 weeks.

Why is this tool useful weekly as opposed to monthly? Businesses actually run out of cash at the end of a week, not at the end of a month. This tool will help you visualize the week when your balance is critically low and help you strategize before it. Since you are able to see the forecast weeks or even months in advance, you are now able to move the week when your balance is low by reaching out to customers for an earlier payment, postponing a purchase, or organizing a loan; you are now able to plan. For best results, complete the forecast every Monday morning, as it will only take you a few minutes.

Accounts Receivable Tips That Get You Paid Faster

For many wholesalers, contractors, and other service businesses, the largest amount of trapped cash is in accounts receivable. This is the cash you’ve earned and is waiting to be collected. The quickest way to improve cash flow is to reduce your days sales outstanding or DSO, with accounts receivable. These tips are simple, but the compound effect will be significant.

Invoice the Same Day, Every Time

A lot of small businesses send out invoices all at once at the end of the month. This practice makes payment wait at least an additional 30 days. To prevent this from happening, send an invoice as soon as the work is completed or the product is shipped. For example, if a job is completed on the 3rd and an invoice is sent on the 30th, then the customer had a loan for 4 weeks with the business earning no interest. To save on average collection time, consider the practice of invoicing the same day work is completed. No additional tools or expenses are required.

Shorten and Clarify Your Payment Terms

Net 30 is just standard practice. You should review your business terms before every holiday and adjust the payment terms for new clients to Net 15 or Due on Receipt. Make it a practice to state an actual date. You will find that “December 5, 2026” gets paid faster than “30 Days Net from Invoice Date.” In the event your client fails to pay you on time, state a reasonable late fee clearly on your invoice. You may never actually charge the fee, but it will encourage your client to pay sooner.

Automate Friendly Payment Reminders

The majority of late payments happen because of oversight. Invoicing software can help to automate reminders by sending a notification before the payment due date and on the due date. Notifications can also be sent for overdue payments at specified time intervals. The awkwardness and variability of messaging to request payments are eliminated by automated reminders. It is also advised to change your communication method from email to phone for invoices that are 15 days past due. One two-minute phone call is more effective for collecting overdue payments than 10 emails.

Infographic 2: Accounts receivable levers that help small businesses get paid faster (illustrative impact).

Use Pay by Text Invoicing to Collect in Minutes

Pay by text invoicing can have the largest impact on your business during the holidays. In place of an emailed PDF invoice, an SMS message with a payment link is sent to the customer. It takes about a minute for the customer to view the invoice and pay via a stored payment method. Behavioral psychology, along with technology, is a game changer. Text message open rates exceed ninety percent, and messages are typically read within a few minutes. In contrast, PDF invoices are ignored, forwarded, then printed, or sent directly to the trash folder. A text message is delivered to a customer most conveniently.

Pay by text is perfect for any business that completes a job in the field and needs to collect payment, like home services, automotive, medical and dental services, as well as salons and landscaping. Payment is collected before the technician leaves the job. Text to pay is a perfect end-of-the-year cash flow solution. The holiday rush is the most profitable time for your business to implement text to pay.

How Early-Payment Discounts Work

An early payment discount reduces margin but improves cash flow. The standard construction of this discount is “2/10, net 30.” The first part means that if the customer pays within 10 days, they get a 2% discount. If they miss the 10 day window, then the full amount is due within 30 days. Taking this construction on its face, for a $10,000 invoice, the customer would save $200, and the seller would receive $200 less in exchange for having the cash in hand up to 20 days sooner.

Is the trade worth it? You will have to do the math for yourself. Although 2% sounds small, if the early payment discount is treated as a financing charge, the discount is worth 36%/year, assuming the customer takes the discount on every invoice. Treat early payment discounts as a scalpel, not a hammer. These discounts are worth using on your largest invoices, your slowest, but consistent, customers, and your broader customer base in the weeks before the holiday season. When cash is tight, certainty has real value, and a $9,800 invoice (after the discount) in hand is worth more than $10,000 arriving in 6 weeks (if the discount is not taken).

Charge Deposits on Large Orders and Jobs

If your business needs custom orders, handles big projects, or has bookings for the holidays, deposits can be very helpful for you. Requiring 25%-50% deposits has three main benefits. First, it means you won’t have to finance the materials or labor needed to fulfill the order yourself because the deposit pays for it. Second, it helps weed out the customers who aren’t really interested. You won’t lose out on capacity during your busy season. Third, it helps minimize your loss for the orders that get canceled or for the customers that disappear.

Many owners also avoid asking for deposits because they are afraid of losing the sale. In reality, deposits are pretty much an industry standard for construction, catering, custom manufacturing, event services, and wholesale. Serious customers expect to pay a deposit. Make deposits part of your quoting policy by requiring the deposit at quote signing, clearly stating the remaining balance and milestones, and allowing deposits to be paid with a link provided via text or email. For large holiday orders, consider progress billing where a deposit is required to sign the order, a payment is due halfway through the order, and the balance is payable at the time of delivery.

This way, your expected cash flows are aligned with your actual cash flows because of the deposits.

Instant Payments for Business: The New Speed Standard

In the US, instant payments for businesses went from being a convenient option to an essential feature for operating a business. Unlike ACH transfers and checks that take anywhere from 1 to 3 business days to a week and beyond to clear, instant payment networks move money between bank accounts instantly and are available 24/7, 365 days a year. Funds settle with finality, meaning there are no waiting periods and business owners do not have to worry that the payment will bounce after the business has already shipped the goods. For small businesses during the holiday season, receiving payments over the weekend that are available to spend on business operations is a real competitive advantage.

FedNow — Federal Reserve

The Federal Reserve launched its instant payment service called FedNow in July 2023. As of now, banks and credit unions on the FedNow system can send and receive payments in seconds, any time of day, any day of the year. Adoption of the system is rapidly spreading, with thousands of financial institutions on the system. Small businesses can directly benefit from instant payment access when funds arrive, control over when payments are sent out, and a significantly lower risk of an overdraft stemming from payment delay due to system settlement.

RTP Network — The Clearing House

Since 2017, The Clearing House’s RTP network has served as one of the other major real-time payment systems in the U.S. RTP also provides real-time payment access to a large number of U.S. demand deposit accounts through its participating banks. Payments made through RTP, like FedNow, are settled instantly, available 24/7, and finalized in an irrevocable manner. Many invoicing and accounting systems now route payments via RTP or FedNow. If your invoicing system has the ability to provide instant bank payments, enable that feature. It is one of the least costly ways to speed up the collection of payments before the upcoming holidays.

Infographic 3: Payment settlement speed compared — instant payments like FedNow and RTP settle in seconds.

Slow Down the Cash Going Out

Tightening cash flow works on both sides of the coin. So far, the focus has been on bringing money in faster. The other side is slowing down the money going out of your business. Start with your suppliers. If you’re on good terms with your suppliers, consider negotiating payment terms, such as moving to a 45-day instead of a 30-day payment term. Suppliers would prefer to accommodate your request rather than lose a customer, and the worst answer you can get is no. Pay your bills on the due date rather than early. Being the early payer of bills makes one feel responsible; however, doing so gives away your liquidity to someone else’s balance sheet at the exact moment you need it most. Where suppliers offer their own early-payment discounts, take them only when the math beats your cost of capital.

Next, take a good look at expenses that happen on a routine basis. Over the course of a business’s operation, it is common for a business to acquire services in the form of software subscriptions or memberships that eventually lose utility. Look at what you can minimize for the quarter. Delay purchases and upgrades of equipment that are not time-sensitive until January. Suppliers are usually more eager to make a sale during this time of the year and will often be more flexible in pricing. Lastly, place a temporary approval threshold on discretionary spending. Any expense above $500 will require owner approval.

Right-Size Inventory Before You Order for the Season

Inventory is cash in disguise. Stock that isn’t selling will never be paying wages. Don’t place orders without reviewing last year’s sales and analyzing at the individual item level. Know your actual best sellers and order accordingly. Be heartless with your slow movers. You should almost always prefer to sell out of a slow-moving product, or else it will be on your shelves in February and be sold at a clearance sale.

If your suppliers allow, consider placing smaller and more frequent orders, even if the unit cost is higher. The volume discount is unlikely to be more valuable than the flexibility. Also, now is the time to put inventory on clearance that has not been selling for a long time. Early October is the best time to sell inventory in order to make cash so that you are able to place orders for the inventory you will actually need in November.

Build a Buffer: Credit Lines and Cash Reserves

You can’t plan for everything. One of your customers might decide to delay payment. A shipping quote might come back double. You can only build your safety net ahead of time, as a calm-looking business is more likely to receive lender approval. A business line of credit is a go-to solution. You draw funds and pay interest; leave it unused, and it costs you nothing. Apply in the early months of Q4, as lenders want to see trailing revenue in your financials. Consider business credit cards with zero percent introductory offers, invoice financing, and merchant cash advances, which all come with their own costs, but should be considered if other options are exhausted. Regardless of your choice, consider the funds borrowed to fill cash flow gaps in your 13-week forecast. Do not consider it a long-term solution to a collections problem.

Put It All Together: Your Pre-Holiday Cash Flow Checklist

Peak season is an intense time for any business, but with these steps broken down into a 90-day calendar, dealing with cash flow becomes a breeze. Ninety days before peak season, you forecast your cash flow based on work in progress and customer orders, analyze your aging receivables metric, renegotiate your supplier payment terms, and submit a request for a revolving credit line. Next comes the 60-day mark. You make sure each invoice gets paid on time, push text-to-pay and instant payment links, begin taking deposits on large sales orders, and trim your spending on subscriptions and contracts that cost you monthly.

At the 30-day mark, as the peak season gets closer, you begin to call the overdue accounts for payment, offer discounts for early payment on large invoices, suspend any further purchasing, and start monitoring your cash flow on a daily basis. When combined, all of these steps will unlock months of cash flow for you to focus on the important work.

Conclusion

The holiday crunch is more about timing than revenue. Money leaves too early and returns too late, with a wide gap in between. This is where even healthy businesses feel the cash flow pain. Don’t wait for a miracle. Forecast your cash flow weekly, and you will notice trends that help you avoid cash flow issues in the future. Send invoices and make it as easy as possible for your clients to pay with just a text. Offering an early payment discount also helps. Protect your large projects by requiring a deposit. Control your spending and use a line of credit for the time being. Start the plan 90 days in advance to anticipate your cash needs. With a successful holiday season behind you, January can be an excellent month instead of a painful one.

Frequently Asked Questions

How can a small business improve cash flow before the holidays?
Begin with a 13-week cash flow projection to identify shortfalls in advance. Speed up cash inflows and slow down cash outflows. Create a culture of same-day invoice collection and payment. Shorten the payment term. Use text message payments. Offer discounts for early payment. Request payment on large orders in the form of a deposit. Control payment outflows by negotiating for longer payment terms with suppliers, stopping non-essential payment subscriptions, and postponing major outflows until January. Establish a business LOC in the early fall to prevent shortfalls from turning into a cash flow emergency.
What is the fastest way to get invoices paid?
Combine three tactics. First, invoice immediately after completing your work. Second, send an invoice via text with a one-tap link to pay. Third, use FedNow or the RTP network for instant bank payments so the payment completes in seconds. Businesses that use same-day invoicing with text-to-pay often collect payment within hours of completing the work.
Do instant payments like FedNow help small businesses?
Yes. FedNow and RTP settle in seconds, any time, day or night, and on any day of the year, even holidays. You can also make instant payments. This shortens your cash conversion cycle, reduces the risk of overdraft due to a delay in payment settlement, and eliminates anxiety related to bounced checks. Instant payments for business are particularly useful during the holiday season because of the long payment time gaps. This allows you to receive revenue on a Friday night and spend it on Saturday. Be sure to ask your bank if your account can receive instant payments.
Should I charge deposits on large orders or jobs?
Usually, yes. An upfront deposit of 25 to 50 percent covers your direct costs and protects your business from non-serious customers and cancellations. Most businesses in construction, catering, events, and custom manufacturing and wholesale have deposits. Serious customers expect them. Ensure your quote clearly states the deposit requirement. Make it easy to pay with a text or email link. For very large projects, consider milestone billing to align your cash inflows and outflows.
How do early-payment discounts work?
An early payment discount is a small incentive for early payment. One of the most common examples is the “2/10 net 30” discount. Buyers can take a 2 percent discount if payment is made within 10 days. If the payment is made after ten days but within 30 days, the seller collects the full invoice amount. Using the example of a $10,000 invoice, the buyer is able to save $200, and the seller receives $9,800 about 3 weeks early. Consider the high cost of capital and use discounts selectively on large invoices during the holiday crunch, and compare the cost of the discount against the cost of drawing on your credit line before offering discounts widely.

Deluxe Acquires Celero Commerce: Why a Check Company Is Going All-In on Payments

Deluxe Corporation

Celero Commerce

The Consolidation Wave Reshaping Merchant Acquiring

What Happens to Small Merchants When Their Processor Is Acquired

The Decline of Checks and the B2B Shift to Digital Payments

Questions to Ask Before You Sign With Any Processor

Contract, Rate, and Service Red Flags to Watch in a Consolidating Market

Why Service and Stability Matter as Much as Rate

What to Watch Next in Processor M&A

Conclusion

Frequently Asked Questions

What did Deluxe acquire and for how much?

What is a merchant acquirer?

What happens to my account if my payment processor is bought?

How do I choose a payment processor?

Are paper checks still used in business?

What Open Standard and Open USD Are, and Who’s Behind Them

Open Standard

Open USD

The 140-Company Lineup

What Is a Stablecoin? Plain English and Why the Dollar Peg Matters

Why the Networks Are Backing One Now: The GENIUS Act Context

The GENIUS Act

Visa and Mastercard

What “Fee-Free Mint and Redeem” and Shared Reserves Actually Mean

Circle

Where Stablecoins Could Touch Merchants First: Cross-Border and Settlement

The Honest Caveat: Still Mostly Used for Trading, Not Payments Yet

Questions to Ask Before Stablecoin Acceptance Is Relevant to You

What to Watch as Open USD Goes Live

Conclusion

Frequently Asked Questions

What is a stablecoin?

What is Open USD?

Why are Visa and Mastercard launching a stablecoin?

Can businesses accept stablecoins yet?

What is the GENIUS Act, and what did it change?

What Barclays Bought and the US-vs-UK Split With Acorns

Barclays

Acorns

What GoHenry Does and Why a Major Bank Wanted It

GoHenry

The Bigger Signal: Embedded Finance Reaching Youth and Family Niches

Why the Next Generation of Cardholders Is Being Onboarded Early

What Businesses That Serve Families Can Take From the Trend

Financial Wellness as an Engagement and Loyalty Angle

Where Embedded Finance Shows Up for Everyday Merchants

What to Watch Next in Family and Youth Fintech

Conclusion

Frequently Asked Questions

What did Barclays acquire and why?

What is GoHenry?

What is embedded finance in simple terms?

Why are banks buying youth-focused money apps?

What does the family-fintech trend mean for small businesses?

What the Big Banks Announced and How Their Plans Differ From Klarna and Affirm

Bank of America

JPMorgan Chase

Citi and U.S. Bank

Klarna and Affirm

Credit-Card Installments vs the Newer Debit-Card BNPL Twist

The Data: How Widespread BNPL Use Has Become (and Who Uses It)

Why Bank-Backed BNPL Users Report Higher Satisfaction

What More BNPL Options Mean for a Small Merchant’s Checkout

The Cost-and-Conversion Question: Lift vs Fees vs Cannibalization

The Fee Side of the Ledger

The Cannibalization Trap

How to Add Pay-Over-Time Without Rebuilding Your Payment Stack

What to Watch as Banks and Fintechs Keep Competing

Conclusion

Frequently Asked Questions

What is bank buy now, pay later and how is it different from Klarna?

Should a small business offer BNPL at checkout?

Does offering installment payments increase sales?

What does BNPL cost a merchant?

Is BNPL available on debit cards now?

Why Most Surcharge Backlash Is a Communication Problem

Surcharge, Cash Discount, or Service Fee in Plain Customer Language

Surcharge Versus Cash Discount