adminBy Richard Miller
Senior Executive Vice President of Sales at John M. Floyd & Associates
With Thanksgiving falling six days later this year than in 2018, consumers will lose almost a full week of holiday shopping. But thanks to advance retail promotions, the buying season began much earlier this year. Information from the National Retail Federation (NRF) predicted that 39% of consumers began their shopping in October. And many subscribers to online shopping 
services kicked off their holiday season in July, with digital events like “Prime Day” that featured mid-year, “can’t miss” holiday deals.
According to the NRF survey, retailers have figured out that many people prefer early shopping to spread out their spending and de-stress the season. So, while consumers who strategize to stay within their holiday budget can make the most out of early promotions and sales, the shopping frenzy can lead to financial hardship for those who don’t keep track of their purchases or who are hit with an unexpected expense.
In a financial wellness survey implemented by PwC, respondents from every generational group reported experiencing financial stress in their life. Cash flow and debt issues were cited as the biggest causes of stress. In the days leading up to the holidays, what are you doing to help calm your members’ financial concerns if they overdraw their account balance?
If there was ever a good time of year to find a way to reduce stress, it is now
The holidays are full of surprises; an overdrawn checking account shouldn’t be one of them. Here are three things that your credit union can do to help members avoid unpleasant financial surprises that can take the “happy” out of the holidays.
- Make a connection to members’ financial needs
According to the National Financial Educators Council, 73% of adults surveyed indicated that they could benefit from advice and answers to everyday financial questions from a professional. A study by JD Power found that tips to help improve one’s financial situation, and advice to help keep track of spending and household budgets are among the most common types of advice retail bank customers are seeking.
Yet, only 28% of respondents recalled recently receiving any type of financial advice from their financial institution.
Make sure your member-facing staff listen to account holder concerns and watch account tracking to identify when it might be helpful or necessary to reach out to someone who is having difficulty keeping a positive account balance.
Remember, many people are hesitant to reach out for assistance when they are in financial distress. By creating a connection with them ahead of time, your staff members can make a tremendous difference in how quickly they get back on track. And demonstrating that you genuinely care about their financial needs will generate valuable goodwill in the process.
- Offer a fully disclosed overdraft program to help members cover important expenses
Convenience is something all consumers are looking for during the holidays. Experiencing an overdrawn account—when an emergency or unexpected expense arises, or an error is made when balancing an account—is not convenient.
A fully transparent overdraft program that clearly discloses program details— like overdraft limits and fees, and how the program works—provides a user-friendly solution that allows members to make an informed decision about whether to use it. No guess work, no confusion and a lot less stress.
On the contrary, a program that involves undisclosed algorithms to determine limits leaves consumers in the dark about how and when the program works to solve their financial needs. This can increase the stress that your members experience and leave them looking for alternative solutions that can be more costly and inconvenient.
- Utilize expert program management resources to maintain the best results
Just as consumers look for a guarantee that the gifts they buy are reliable and match the recipients’ needs. They want financial products and services they can rely on when they need them. When your staff members are balancing multiple responsibilities tied to extra end-of-year tasks—or don’t have the confidence to fully explain the details of how to responsibly use your overdraft program—errors can occur, and members can be surprised by unexpected charges or misuse the privilege.
A time-tested overdraft solution provides the necessary tools to ensure that your members are familiar with your program’s policies, their account status and other important information through automated resources and prepared, compliance-tested messages. On-going training opportunities keep employees on the same page regarding the program’s details to solidify their understanding of how the program works, and provides them with timely updates of any changes in processes and procedures.
The more accurately and confidently your employees explain your overdraft solution, the less likely you are to have to clear up any confusion or misunderstanding among members. Plus, partnering with an experienced overdraft program provider—that offers advice on the latest regulations and a 100 percent compliance guarantee—can reduce the likelihood of scrutiny from examiners and provide peace of mind for your credit union.
Do what you can to keep the holidays “happy” for your members
The holidays should be the most joyous time of the year, but they can also be the most stressful when unexpected financial burdens dampen the spirit of the season. Providing your members with the tools and advice they need to maintain a healthy bottom line can help them begin the New Year with renewed confidence in their relationship with your institution and less concern about having to pay for any leftover holiday expenses.
