Uptown Bucks (UB) is an off-campus meal plan business in Oxford, Ohio. Students or their families buy debit cards with fixed amounts that they can use to purchase food at more than 18 local restaurants. Customers can buy the cards at UB’s office in the center of town, or they may purchase the cards online. The following paragraph describes the online card sale process. A customer enters their credit card information online and then the amount of purchase. UB’s software automatically checks the card number to determine that it is a valid credit card number; for instance, there are certain digits that indicate Visa cards. The software displays an error message if the number is not valid. The usual cause of these errors is typographical. Once the customer completes the card order screen, the software sends the data in an encrypted form to UB’s host computer. Periodically, the UB accountant retrieves transactions from the server. This is done by clicking on the ‘‘Get Transactions’’ screen button. For each online transaction, the accountant then manually copies down the credit card number on a scrap of paper, walks across the office to the credit card machine, and keys in the credit card number, the amount, and the numerical portion of the address. The credit card software checks to see if the card is valid and charges it for the amount. The accountant next writes down the validation number, returns to the host computer, and enters it. She prints a receipt for the transaction and puts it in a file. The customer database now reflects the new customer. When a customer purchases a card off-line with a credit card, the accountant swipes the card directly, checks its validity, charges the card, and then writes down the validation number and enters it in the host computer. UB is considering the purchase of credit card software that can reside on the host computer and interact with their accounting software. The credit card software costs about $400. The credit card company rates are likely to increase by about. 5% because cards could no longer be swiped directly—all credit card purchases would need to go through the online software. The rate UB has to pay the credit card company is based on this mix. Credit card companies typically charge more if card numbers are punched rather than swiped because they have more chance of invalid transactions due to theft. It’s easier to steal a number than a card. Currently about half of UB’s sales transactions arise from online sales; the other half result from sales through the office.

Requirements:

1. Should UB buy the credit card software?

2. Use the skills you developed from Chapter 3 to develop a flowchart for UB’s online sales process.

3. What are the business risks associated with this process?