How to Payout Consignors using ACH Direct Deposit

Industry Statistics Supporting Direct Deposit Adoption

The preference for direct deposit is evident across various sectors. A survey by the American Payroll Association found that over 93% of respondents use direct deposit for their wages. Additionally, businesses can save up to $2 per transaction by switching from paper checks to direct deposits, translating to significant annual savings. ​Here are some other key statistics that tell about the advantage of using direct deposit:

For the Store (Consignment Business Owner):

• Saves Time & Reduces Errors

  • Businesses save an average of 15 minutes per payment by using direct deposit instead of writing and mailing checks – Nacha

  • 33% of employers make payroll errors annually, costing billions in penalties – IRS

  • Processing checks costs businesses anywhere from $4 to $20 per check, including materials, labor, and bank fees – Bank of America

• More Secure & Reduces Fraud

  • Paper checks are 125 times more likely to be involved in fraud than electronic payments – AFP Payments Fraud and Control Report

• Better Cash Flow Management

  • Direct deposit ensures faster, more predictable cash flow management by eliminating uncashed checks sitting in limbo – National Federation of Independent Business (NFIB)

  • Automated payments can reduce payment processing costs by up to 80% – Business Insider

For the Consignor (Seller Receiving Payment):

• Faster & More Convenient Access to Funds

  • 93% of employees prefer direct deposit for payroll, citing speed and reliability – American Payroll Association

  • Paper checks take an average of 5-7 business days to clear, while direct deposits process within 24-48 hours – Federal Reserve

• Avoids Lost or Stolen Checks

  • Checks can take weeks to replace if lost or stolen, whereas direct deposits are tracked and secured electronically – Forbes

• Eliminates Bank Trips & Check Cashing Fees

  • The average check-cashing fee is 1-12% of the check’s value, costing Americans $2 billion annually – FDIC

  • Direct deposits remove the need for consignors to travel to a bank, saving time and eliminating cash-handling risks – Pew Charitable Trusts

Consumers expect more and more that their interactions have a digital solution and businesses should eagerly meet these expectations. Meeting these expectations are crucial for consignment stores since consignor retention is so essential for their business.

How to Integrate Checkbook.io with ConsignCloud

ConsignCloud partners and integrates with Checkbook.io so that you do not have to handle customer banking information. Note that you will need both a ConsignCloud account and a Checkbook.io account to enable direct deposit (these steps are shown below). Integrating Checkbook.io into your ConsignCloud system is a straightforward process:​

1. Initiate the Integration

   Navigate to Settings » Operations » Payouts in your ConsignCloud dashboard. Click on the 'Get Started' button to begin the linking process with Checkbook.io.​

2. Account Setup

   If you already have a Checkbook.io account, simply log in. If not, select "Don't have an account" to create one. During this step, authorize ConsignCloud to make payments on your behalf by clicking 'Authorize'.​

3. Configure Webhooks

   To ensure ConsignCloud receives updates about your payouts, set up webhooks (webhooks are simply a way for ConsignCloud and Checkbook.io to communicate):​

• Copy the webhook URL provided in the warning notification on your payout settings page.​

• In your Checkbook.io account, go to Settings > Developer, paste the webhook URL into the designated field, and click 'Update'.​

4. Finalize Settings

   Review your business information in Checkbook.io, ensure your transaction limits are appropriate (you can request increases if necessary), and upload a signature on file to process payouts exceeding $2,000.​

Processing Payouts with Checkbook.io

Once integrated, processing payouts becomes efficient:​

• Settlement: When finalizing a settlement in ConsignCloud, choose the Checkbook.io payout option. This action creates a 'Draft' payout, which synchronizes with Checkbook.io in the background.​ You can pay out all the consignors in your store in less than 10 seconds with this integration.

• Consignor Notification: Consignors receive an email with a digital check and options to either print it or receive the payment via ACH. If they opt for ACH, Checkbook.io collects their bank details and processes the payment automatically.​

• Tracking: Monitor the status of payouts in both ConsignCloud (Settings » Operations » Payouts) and your Checkbook.io dashboard.​

Conclusion

Integrating Checkbook.io with ConsignCloud offers consignment store owners a robust solution to streamline payouts and enhance consignor satisfaction. By embracing direct deposit, stores not only save time and reduce errors but also build stronger, trust-based relationships with their consignors. If you are looking for more quick tactics to improve your store, see these seven practices Alexandria incorporated to increase her inventory sell-through rate. This integration is a strategic move towards operational excellence and long-term success in the consignment industry. If you have not yet, start your free trial with ConsignCloud today!