Improving the Payout Process for Consignment Payment Processors

Did you know that there are over 250,000 consignment and resale stores across the United States?

Americans are clearly on the hunt for bargains, and they enjoy finding deals on everything from clothing to home goods.

Even more impressive? The consignment industry is on pace to to generate $70 billion in revenues by 2027.

One way consignment stores boost revenue is by buying used goods from resellers and then selling them for a profit. However, that revenue model relies on facilitating instant payments, which isn't always easy. Implementing robust consignment shop payment solutions can simplify the process.

Common Challenges in the Consignment Industry

There are several issues consignment payment processors typically run into with instant payouts. 

Not Enough Cash on Hand to Pay Sellers

You can't always predict how many clients will bring their secondhand wares into the store for cash. Even if thrift and consignment stores know to expect more items on certain days of the week, there's no telling how much they'll be worth. That means consignment store employees must make frequent trips to the bank to withdraw cash needed to pay their sellers.

The more often consignment store employees visit banks and travel with cash, the greater the security risk. There's also the potential of not having enough cash on hand to make consignment payouts. If the store can't pay sellers, they're more likely to take their items to another reseller rather than wait for an employee to replenish the cash reserves.

Printing Checks Delays Time to Payment & Limits Ability to Shop In-Store

Some consignment shops try to circumvent the logistical issues and security risks of keeping cash in the store by printing checks on-site for thrift store payouts. However, that creates friction in the payout process. Rather than receiving instant cash, sellers must take extra steps to cash a check, such as going to the bank, depositing the check, and waiting for the money to clear.

Since check payouts delay payment times, sellers aren't as likely to browse the store in search of items to spend their payout on. Instead, they leave the store after receiving their check to deposit their money. That means more outgoing cash for payouts, with less money coming in — hurting the overall cash flow of the consignment shop.

Potential for Mistakes and Fraud

When stores use manual processes in instant payouts for consignment shops, there's a higher potential for errors and fraud. Employees may fail to count the money correctly, resulting in over or underpayments. There's also the risk of theft or robbery.

Underpayments, overpayments, and missed payments lead to disputes and distrust between consignment stores and sellers. Without proper oversight, poorly handled manual payments can result in fraudulent activities that damage the store's reputation.

Need for Compliance

Manual payments don't make it easy for consignment store payment processors to monitor transactions. There's always a risk that an employee will make a transactional error or fail to account for a payout properly. Upgrading to a sturdy payment solution can improve a store's compliance in consignment payments, lowering risk.

An Instant Payouts Solution from MassPay

Well-designed consignment financial management solutions can make things simpler for store owners while improving customer satisfaction. Here are the features to look for in a payment solution.

Instant & Automated Payout Processing

When clients bring secondhand items to resellers hoping for instant payouts, an effective payment solution will immediately provide them access to their funds without the risk of manual errors or delays.

MassPay can handle consignment payments, allowing customers to receive their funds promptly without the risk of manual errors that lead to over or underpayments. There's no manual intervention required, so stores experience less risk.

Remove Need for Cash on Hand

While stores need some cash on hand to accept payments and make changes, there's no reason to keep hundreds of dollars in the register. 

By offering MassPay's automatic payment solution that pays sellers electronically, stores can minimize cash in the register and keep sellers happy. Plus, since customers receive an instant payout, they can shop around for things they need in the store using their payments.

Real-Time Payment Tracking

Consignment stores and sellers want real-time access to payment status. With real-time tracking, sellers know the transaction is in process and when to expect its completion. Offering a payment solution that provides real-time status updates improves transparency and trust between stores and sellers.

With MassPay, thrift stores can provide the real-time tracking sellers want. This solution allows stores and sellers to monitor payments, allowing for greater trust during the consignment process.

Flexible Payment Methods

Not all consignment stores prefer the same payment methods. Some use specific payment types based on regional considerations, while others find prepaid cards or alternative methods a better option. When searching for a payment solution, you want a provider that offers flexibility.

MassPay clients receive access to a broad array of payout options, including bank transfers, prepaid cards, and alternative payment methods. Stores can pick the right fit for their business and use this flexibility as a way to attract and retain sellers.

Secure Transactions

Consignment stores collect sensitive customer data, including names, contact details, identification, and payment information. Keeping client data safe from fraud and data breaches is integral to payment orchestration for consignment shops.

MassPay uses advanced security protocols to protect consignor data. Our system includes encryption and multi-factor authentication to prevent bad actors from accessing sensitive information.

Give Consignors What They Want With MassPay

The consignment industry is projected to grow at a rate of 15% annually over the next six years. This means consignment and thrift stores are likely to face more competition, making it critical to stand out as the best option for resellers. 

One way to do so is by offering an efficient solution for instant payouts with a provider like MassPay.

With MassPay, consignment stores can offer instant payouts, real-time payment tracking, flexible payment options, and secure transactions. It eliminates the need to keep lots of cash on hand, reducing security risks. 

To learn more, schedule a consultation with the MassPay team.