March 5, 2005

Summary

An experimental project for residents to obtain Beach Tags and Tennis Tags by ordering using a credit card at the Mountain Lakes Web Site.  Would be more convenient for residents who could order from the comfort of their home or office any time of the day or night.  A reasonable postage/handling fee would be added to defray the extra credit card and mailing costs.  Residents could still purchase tags at Borough Hall during business hours if they wish to save the additional cost.  This would be an extra Borough service for residents only -- non-residents would have to go to Borough Hall as usual.

Advantages

• More convenient for citizens.
• May sell more tags because it’s more convenient.
• Removes effort and risk of Borough Hall handling cash/checks.
• Reduce the disruption of customers coming to Borough Hall at any time; fulfillment could be done daily at a convenient time all-at-once.
• Makes the Mountain Lakes Web site more valuable.

Design Objectives

• Maximize security and minimize financial risk to the Borough and its employees (Overarching Objective).
• Minimize effort for Web Site Committee.
• Charge a Shipping and Handling fee sufficient to cover all costs but not make a profit or gouge our citizens.
• Minimize fulfillment effort by Borough Hall.
• Cost minimization is not an objective since project is experiemental. However, the proposal below appears to be among the lowest cost alternatives.
• If it is decided to continue the project in succeeding years, a cost reduction effort could be undertaken.

Technology Options

• For an enterprise to do electronic commerce, four items are required:
  1. Merchant Account -- permits taking credit card orders and receiving the revenue.
  2. Shopping Cart -- Software that permits buyers to add items to a "cart" and "check out" when finished.
  3. Payment Gateway -- A computer system out in the world that checks the credit card validity, bills the buyer, and puts the revenue into our bank.
  4. Fullfillment
• There are many vendors of each.
• Shopping Cart software can reside on our Web site or on a vendor's Web site.
• If on our site, we can develop it ourselves or download it from the Internet; there are many download choices both free and purchased.
• Some Merchant Account vendors offer the first three.

Proposal

• Develop our own "shopping cart" to reside on the Mountain Lakes server. We wouldn't want to undertake the development of a full shopping cart but the shopping cart for this application is almost trival: a simple ordering form.
• Use PayPal for Merchant Account and Payment Gateway. Although you think of PayPal as linked with eBay, they offer generic services for on-line merchants, they are a widely-known, reputable, trusted name, they have all the functionality we need, and they may be the lowest cost alternative,
• Residents would have the option to charge the tags to their PayPal account.
• Use Borough Hall for fullfillment.

Functionality and Flows

• Our Web site ordering form would collect the number of each item ordered.
• When "Buy Now" is clicked, PayPal would collect the shipping name & address, billing name, address, & credit card number.
• The buyer's credit card or PayPal account would be charged, the funds would be transferred to the Borough's bank, and an e-mail sent by PayPal to both buyer and Borough Hall.
• Borough Hall would check e-mail once a day, stuff the tags into the envelop, address it (perhaps by cutting and pasting the shipping address from the e-mail) and mailing it.
• PayPal provides a number of tracking and statistics tools and offers a mechanism to provide refunds within 60 days if needed.

Costs

PayPal is affordable for businesses of all sizes. Fees are applied only when we accept a payment -- if we don't receive money, we don't pay a penny.

• No monthly fees
• No setup fees
• No gateway fees
• Free web payment tools
• Antifraud systems at no extra cost
• Fee for receiving payments from buyers in the United States: 2.9% + $0.30. For example, a $50 beach tag order would cost $1.75.
• If Mountain Lakes were to charge a shipping and handling fee of 3% + $1.50, it should be enough to cover processing and postage. For example S&H on a $50 order would be $3.00.

User Experience

There are several ways this could work. The Web Committee can't make a final decision until they see the details of the PayPal system. It may also depend on the details of the beach/tennis tag pricing system. The following will provide a rough idea.

Fullfillment

• Borough Hall notified by PayPal via e-mail
• Borough personnel drop tags in envelop, address and mail it
• May wish to send e-mail to user notifying them of mailing.

Other Information

• This system will accept all credit cards as well as PayPal account
• Address Verification Service (AVS) will confirm the given billing address corresponds with that on the credit card.
• From PayPal login, refunds within 60 days may be given and various traffic and statstical analyses may be accessed.
• All PayPal screens have a minimal level of look-feel customization so they look like Mountain Lakes screens not PayPal screens.
• It's possible to have multiple PayPal logins with differing permissions so that different Mountain Lakes employees can access it for different purposes.
• Since the Shipping Information screen is a standard generic PayPal screen, there isn't any way we can prevent someone from putting in a non-Mountain Lakes address. We will:
  1. Emphasize on the ordering screen that only Mountain Lakes addresses will be accepted,
  2. Ask for and receive a shipping address on the ordering screen and check it for street name, city, and zip code.
  3. Pre-populate the PayPal Shipping Address screen
  4. If someone changes the prepopulated information to another city or zip code, require them to come to Borough Hall to pay the additional non-resident charges or refund their money less a hefty handling fee.
  5. Configure PayPal to reject non-US addresses.
• Residents would be notified about the system by notices in the April, May, and June HSA Bulletins, notices on the physical bulletin board, and in the normal Borough-wide mailing notifying residents of the availability of the tags.

Next Steps

• Solicit and gain concurrence from all necessary Mountain Lakes stakeholders: Borough Manager, CFO, Borough Council, who else?
• Set up PayPal account with multiple logins. Includes Borough bank information.
• Draft and submit notice for April HSA Bulletin. Don't promise anything, just warn that it may be coming.
• Develop ordering screens.
• Test system using capabilities provided by PayPal.