Getting your business ready for the holidays using rewards cards

How to score rewards on expenses, stock up on inventory and stress test systems to avoid chargebacks, fraud

Rebecca Lake
Personal Finance Writer
Making complex credit topics simple

Get your small business ready for holiday shopping season using credit cards

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The holiday shopping season seems to kick off earlier each year and if you own a small business, it pays to be prepared.

Holiday shoppers spent $691.9 billion in 2017, according to the National Retail Federation. Grabbing a slice of the sales action can give your business a boost, and it’s not too soon to start prepping.

And if you choose carefully, paying for holiday-prepping expenses with the right credit card can boost your earnings.

As you’re making your pre-holiday season to-do list and checking it twice, put these tips to work.

See related: 3 ways to minimize holiday returns without losing customers

Use cards to get your small business ready for holiday shopping season

Cash in on ad spending

Planning your advertising strategy ahead of the holidays can pay off if you’re able to grab shoppers’ attention early.

If you’re launching ads for the first time, you may be able to score free credits from Google, Twitter and Bing to get started, says Priyanka Prakash, finance expert at Fundera.

She also recommends using a card that pays points or cash for advertising purchases to expand your advertising footprint and get more bang for your buck on social campaigns.

If you have a larger holiday marketing budget, using your rewards card to pay for ads could open the door to a premium elite card.

Nishank Khanna, chief marketing officer at Clarify Capital, was invited to open a Centurion Card from American Express – also known as the Black Card – after using his Business Platinum® Card from American Express to charge advertising purchases.

When planning your holiday ad strategy, don’t be afraid to mix things up.

“The most critical thing is testing out marketing campaigns to finalize on ones that are ROI positive,” says Khanna. “When the holiday season arrives, then all you’re doing is scaling those existing campaigns.”

Tip

Tip: Look beyond just digital ads for marketing as well. Update your website with holiday-specific messaging and pre-plan content for holiday sales email campaigns so you’re not scrambling to get those done once the season gets underway.

Stress test your business systems

Increased customer demand during the holidays can present challenges if your website or in-store point-of-sale system crashes under a heavier load.

According to a 2017 survey conducted on behalf of TD Bank, 25 percent of business owners said they weren’t confident their payments system could hold up under increased customer traffic.

If you’re considering an update, plan to tackle it sooner rather than later.

“My recommendation is to get all the upgrades of major systems done well ahead of when peak demand arises, like for Black Friday or Cyber Monday,” says Tim Trampedach, president of Torqued, an e-commerce site specializing in motor sports accessories.

He says aiming for a Nov. 15 deadline gives you a two-week buffer to work out any kinks before the official start of the holiday season after Thanksgiving.

Using a business credit card to pay for an upgrade is an easy way to earn rewards or land an introductory sign-up bonus. If you’re shopping for a point-of-sale system at an office supply store or online, try one of these cards for maximum rewards:

  • SimplyCash Plus Business Card from American Express offers 5 percent cash back at U.S. office supply stores.
  • Ink Business Cash Credit Card offers 5 percent cash back on the first $25,000 in combined purchases at office supply stores and on internet, cable and phone services each year, then 1 percent back on purchases with no limit.
  • Amazon Prime Rewards Visa Signature offers 5 percent back on Amazon.com.
  • Capital One Spark Cash for Business offers unlimited 2 percent cash back on every purchase.
Tip

Tip: While you’re checking systems, test your website to make sure it loads quickly and there are no broken links. Holiday shoppers spent 51 percent of their gift budget online in 2017, according to a Deloitte survey, and you don’t want a slow-moving site to stand in the way of sales.

Cover your staffing bases

Expanding your staff for the holidays or increasing your employees’ hours is another way to leverage your rewards card.

Khanna says his business uses a payroll service that allows payment using a credit card. He’s able to earn travel rewards this way, which he uses as an employee perk.

  • If you’re hiring employees for the holidays, start canvassing early to give yourself time to train them properly.
  • Lay the ground rules with both current and new employees on taking time off during the holidays so you don’t run into any staffing shortages on your busiest days.
Tip

Tip: If you are considering giving your employees business credit cards, you should consider the pros and cons, rewards and frequency of employee purchases. Read “5 business expense card options for employers” to learn more.

Stock up on inventory and stay in touch with suppliers

Being inundated with holiday shoppers does your business no good if you don’t have anything to sell them.

  • A good way to gauge inventory needs is to look at last year’s sales figures.
  • You can use those numbers to project how much product you should be able to move for the upcoming season.
  • From there, you can reach out to your suppliers and vendors to make sure the inventory you need is in stock and schedule delivery dates.

See related: Savvy ways to finance holiday inventory

Turn shipping costs into savings

Something else to think about as you plan your inventory: How you’ll ship those items out to customers who buy online.

If you’re planning to offer free shipping as an incentive for shoppers and foot the bill yourself, don’t miss an opportunity to save on those costs with your rewards card.

  • The Business Gold Rewards Card from American Express offers 3 points per dollar on one category of your choice, including shipping, up to the first $100,000 in purchases annually.
  • The Ink Business Preferred Card is another great option for earning rewards on shipping fees, as it offers 3 points per dollar spent on this category.

Here are some additional tips for managing holiday shipping: 

  • Ask your shipping provider about a discount if you’re sending significantly more product out the door over the holidays.
  • Tailor shipping boxes to the product size so you’re not paying more than you need to for packing materials.
  • Prepackage your best-selling items so those can be ready to go right away.
  • Aim to ship the same day orders are placed to avoid having to pay higher shipping fees for last-minute delivery.
  • Schedule package pick-ups at your business so you don’t have to waste time standing in line at the post office.
"Businesses, despite the additional sales and revenue they earn during the holiday season, may lose out due to [chargeback] costs. What’s more, they won't even see the chargebacks until after the holiday season."

Be wary of holiday shopping fraud

The holidays are prime time for fraudsters, and it’s important to protect your business and your customers from scammers.

Chris Olson, CEO of The Media Trust, a digital risk management company, says there are several things you can do to defend against fraud at the holidays.

First, “companies should ensure they know who they’re purchasing from, that the sites are secure and will protect their sensitive information,” he says.

  • If you’re using your card to purchase online ads for the holidays, Olson says to make sure you’re using reputable ad networks.
  • If you’re selling online, check your site’s security and the security measures of any third-parties you work with, such as a payment processor like PayPal

Minimizing the potential for fraud is key to preventing chargebacks.

  • A chargeback occurs when a customer disputes a charge with their card issuer.
  • If the card issuer validates the dispute, your business is responsible for reimbursing the charge, plus a chargeback fee.

“Businesses, despite the additional sales and revenue they earn during the holiday season, may lose out due to these additional costs,” says Don Bush, vice president of marketing at fraud protection software provider Kount. “What’s more, they won’t even see the chargebacks until after the holiday season.”

Some simple ways to avoid chargeback losses include:

  • Having a clear return policy.
  • Responding quickly to customer questions about purchases.
  • Making sure your payment descriptor clearly identifies your business, so shoppers know who they’re buying from.

Taking steps to avoid credit card chargebacks can help you hang on to more of the sales revenue your business generates over the holidays.


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Updated: 12-18-2018