New Credit Card Program Will Reduce Cash Reserves

Posted by MCC on April 25th, 2010 at 07:00am

The Michigan Retailers Association will soon start offering retailers in the home furnishings industry a new credit card program. The processing services will eliminate or drastically reduce the amount of cash reserves that many retailers are now forced to hold.

“We can process your credit card transaction at a competitive rate and minimize or eliminate your reserve requirement because of this unique insurance product,” said John Mayleben, senior vice president, technology and new product development for MRA. He said the program should be available within 10 days to furniture and other retailers in all states.

Over the past several years, many of the financial institutions that offer credit card processing have started to require that retailers keep large cash reserves. These reserves are protection against the tough economic market and because so many businesses have failed.

Many retailers, especially businesses that are considered a high credit risk have had to keep hundreds of thousands of dollars in reserve. These large reserves are affecting cash flow and adding to the liquidity crisis that many retailers are already facing.

Under Furniture News