Customer:

Hobby Lobby

Oklahoma City, Oklahoma

Founded as a home-based business in 1970, Hobby Lobby has grown to become the largest privately owned arts-and-crafts retailer in the world. The retail chain today has more than 1,000 stores coast-to-coast.

Hobby Lobby’s relationship with Commerce Bank dates to the late 1990s, when the bank first helped finance some equipment purchases and joined other banks as a member of the retailer’s primary credit facility. In 2001, the retailer became one of the first companies in the country to provide Commerce Bank purchasing cards to their store managers, buyers and other key employees. Today, nearly 800 Hobby Lobby employees rely on Visa^® cards from Commerce Bank to support store management or pay travel expenses.

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Challenge:

Finding a way to pay suppliers who prefer card payment.

Every month, the Accounts Payable team at Hobby Lobby’s corporate headquarters processes thousands of invoices from its suppliers. Traditionally, all have been paid by check, ACH or wire.

In 2021, Commerce Bank approached the team with the idea of using virtual credit cards to pay some suppliers who prefer that option.

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Solution:

AP Card Program from CommercePayments^®.

The idea of using a virtual card was new to the AP team. Unsure how a virtual card might fit into their overall payments system, they opted to give it a try.

With help from the CommercePayments^® team, Hobby Lobby integrated the virtual card option into its AP process. “It was a relatively simple application and interface,” Ann Lawton, Hobby Lobby’s assistant vice president for Treasury & Internal Audit.

“We had a pretty good idea about which of our vendors might accept card payments,” says Lawton. “It can be a good option for some smaller vendors that value faster payment.”

After the company’s AP staff processes a supplier invoice and initiates a payment file, these suppliers now receive an email containing a one-time-use virtual card, which they can use to retrieve their funds.

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Results:

“We wanted to dip our toe in the water so we could see how it works,” explains Lawton. “We were interested in learning about payment speed, visibility, vendor response and ease of use, among other things.”

While only a small percentage of the payments the retailer makes each month are by virtual card, Lawton says the program has met their objectives. In addition to reducing paper check expenses, Hobby Lobby receives a revenue share for each virtual payment.

“We think of it as another payment option — another way to meet the needs of vendors who are open to a card payment,” says Lawton.

“This was new for us, and Commerce was right there to answer questions and make the process operate smoothly,” notes Lawton.

“We appreciate the Commerce team that supports us,” adds Shary Hayes, executive administrative assistant to Hobby Lobby’s chief financial officer. “Their customer service is outstanding! They are always right there for us and correct any issues that may arise. Kudos to Commerce Bank!”

CommercePayments^® solutions are provided by Commerce Bank.