Statistics show that the check cashing and payday loan industry has grown exponentially in the past decade, going from a $10 million industry in 2001 to a $30 billion industry in 2010. Although critics have long claimed that those who frequent check cashing businesses do so because they have no other options, several recent studies highlight other reasons why some customers prefer check cashing stores over banks.
Many consumers prefer these businesses because of the flexibility they offer. Not only do check cashing stores often keep longer hours than banks, but they also have a reputation for fee transparency as well as superior customer service. Here, we’ll explore the ways in which check cashing establishments go above and beyond to please their customers.
They Offer a Better Deal.
Many people used to believe that check cashing stores were more expensive than banks, but studies have shown that the opposite is true. Today, there are very few banks that offer free checking accounts, compared to just a few years ago. Due to government regulations that changed the way the banking industry operates, banks have resorted to charging fees for products and services that they used to offer for free. Few accounts now come with free checks, and in addition to ATM fees, customers must pay an extra fee for paper statements, check images, research, debit card replacement, and more. Many bank accounts also include a monthly service charge that can only be waived in certain instances. Bank customers consistently acquire overdraft fees that over time can add up to much more than the cost of doing business at a check cashing establishment.
The predictability of pricing is also a key reason that customers continue to come back to check cashing stores. These businesses openly state their pricing and store policies up front and clearly communicate any changes ahead of time. On the other hand, banks, often charge fees in a very ambiguous manner, leaving customers who deposit money at irregular intervals or who do not carry large balances in a state of near-constant uncertainty.
They Focus More on Their Customers.
Although banks definitely subject new tellers to comprehensive training, most of the training centers on banking rules, regulations, and sales, with little attention to customer relationships. Check cashing stores similarly train their personnel in cash handling and store policies; however, these businesses also place significant emphasis on customer interaction.
Many check cashing establishments proudly state how satisfied their customers are, and rightly so. People who frequent check cashing locations tend to see the same employees each time they visit and often get to know these individuals on first-name basis. Check cashing employees take a personal approach when helping customers complete a variety of transactions, from payday loans to wiring money. Further, check cashing employees do not receive a commission for the accounts they open, nor are they privy to how much money the customer actually has. In contrast, bank tellers often must sell financial products and services and thus can sometimes view customers with lower net worth as being less worthy of their time and attention.
The training that check cashing employees undergo helps ensure that customers feel welcome. These positive in-store experiences are critical in retaining loyal customers and drawing in new ones. If customers have a positive experience, they are more apt to return to the same check cashing establishment. Not only is this good for the check cashing aspect of the business, it also makes it easier to cross-sell other products.
Many check cashing businesses continuously monitor customer satisfaction, and most stores accomplish this through formal surveys as well as unsolicited feedback. Some check cashing establishments take feedback a step further and perform highly technical analytics to determine how many times customers return to the business, what services they use most frequently, as well as which services or products customers tend to avoid.
Check cashing establishments use all of this data to make the check cashing experience more customer-focused. This information also serves a way streamline product lines. Analytical information can also serve as a training tool; because employees will be better able to explain the benefits of using a particular product or service once they understand why customers gravitate towards it.
Regardless of their reasons, more and more customers are turning to check cashing businesses to meet their various financial needs. As the financial services industry continues to evolve, banks would do well to emulate these establishments and their strong focus on a positive customer experience.
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