Wednesday, September 26, 2012

Avoiding the "Blame Game"

No matter what the economic conditions are, it seems some retailers look for any way possible to save some money when investing in a retail point of sale system.  Many times they end up purchasing the point of sale software from one vendor, the computers from a different vendor, and the peripherals (cash drawer, barcode scanner, receipt printer, etc.) from yet another vendor.  In the end, they save a few bucks but also set themselves up for what is know as the "blame game".

Loosely defined, the blame game is when one vendor blames problems on the other vendor and the retailer is stuck in the middle (all while still trying to run a business).  Say that the receipt printer stops working - the vendor that provided the receipt printer will blame the software vendor and vice versa.  Not fun to deal with when your system is down.

Best advice is to always purchase everything (computers, software, peripherals, training, installation and on-going support) from one vendor. While it may appear to cost more initially, you will have one vendor to call for everything related to your point of sale system - no blame game!

Monday, September 24, 2012

Speaking of Workshops...

Link to information about an upcoming FREE (yes FREE) workshop at the Idaho Small Business Development Center that focuses on retail point of sale technology and how to budget for a point of sale system:

Note that this workshop can also be conducted online or at a location near you (in the past year these workshops have been held from Helena, MT down to Reno, NV (and points in between).

DirectPOS - Boise, ID and Spokane, WA
Idaho Small Business Development Center

Sunday, September 23, 2012

Owning versus Renting Point of Sale Systems

One of the more recent trends in specialty retail point of sale systems is the ability to 'rent' a system. Generally one monthly payment includes the software, hardware and support.  Traditionally, point of sale systems have been purchased outright (or leased with intent to own after 3 to 5 years).

This question came up again when I was co-chairing a retail technology forum at the IFTD show in Reno, NV.

The answer simply comes down to down works best for your budget. An outright purchase means that you own everything and can start enjoying a return on investment with your system. However, just like some people prefer to lease a car, a monthly rental payment tends to be easier on your budget.

Things to watch out for when renting a point of sale system include the following:
  1. Is everything included in the monthly payment (software, hardware, support and upgrades)?
  2. Do you still have access to all you customer and inventory information should you decided to switch to a different system?
  3. What happens if the company goes out of business?
  4. How are hardware repairs handled?
The final pondering point we talked about at the conference is that renting will cost more in the long run. With a typical point of sale system starting around $3000.00, we determined that utilizing a similar system with a monthly payment of $79/month will cost $4740.00 over the course of five years.

In the end - it is what works best for you and your budget.  Of note, there are some 'free' point of sale systems being offered. We all know that nothing is free - these companies make money on the back end by charging higher fees for credit card processing or similar services.

Sunday, September 16, 2012

How Gift Cards Increase Net Profit

Looking again at data from retail surveys conducted by the Nation Retail Federation and National Cash Register, it is probably not well known that simply selling gift cards through your retail point of sale system can actually increase your net profit.

How?  It boils down to three things that generally happen when someone purchases a gift card from your store:
  1. The gift card is set aside or given as a gift and forgotten about.
  2. The gift card is used for a purchase but the customer under-spends. The gift card has a value of $50.00 but the customer only spends $45.00 and never uses the remaining amount. I personally tallied up the various partially used gift cards in my laptop bag and they all had unused balances of $.87 to $2.84.  The unused portion of a gift card is pure profit for you.
  3. The gift card is used but the customer over-spends. The gift card has a face value of $50.00 but the customer spends $65.00.  That is a 30% increase in the transaction amount.
Factoring these three things, retailers reported net profit increases of 1% to 3% by simply offering gift cards. Considering that point of sale systems  have built in gift card functions, it should be an easy decision as to whether or not to offer gift cards.

When researching point of sale software, I always encourage the retail store owner to make sure that there are no hidden fees related to the selling or redemption of gift cards. The only cost should be for the card itself as the point of sale software should track the gift card sale and redemption (and remaining balance for the customer who wants to reload or fully utilize the cards value).

Even with just a 1% increase in net profit that could equate to $1250 or more annually - depending on your annual gross sales.  There is also some time savings involved since your no longer have to track paper gift certificates as your point of sale system will take care of it for you.  Not a bad deal for simply selling a piece of plastic!

Are you in the US and in need of no cost retail point of sale advice? I'm happy to help and can be reached on my cell at 208-340-5632 (mountain time) or via email at

Thursday, September 13, 2012

Your Employee's are Stealing from You - But Here are Some Things Point of Sale Can do About it.

I'm currently working on a workshop for the Idaho Small Business Development Center leadership as well as a expanded workshop for the clientele who want to learn more about specialty retail point of sale systems.  In gathering some updated data for the workshop (which allows a retail business owner to properly budget for a point of sale system), I came across a surprising statistic on retail theft from the National Retail Federation (NRF).

The survey indicated that employee theft accounts for 43.9% of all retail theft (or "shrinkage" as we like to call it in the industry).  This would account for intentional and unintentional employee theft (which I will explain further a bit later).  Naturally, that is a large percentage - higher, percentage-wise, than even shoplifting!  An official overview of the NRF survey can be found here:

Almost every time I talk to retail store owners about employee theft, the response normally is "not at my shop - my employee's are trustworthy". Based on the survey, that may not be fully true. But, employee's may not be intentionally stealing. Here is a how most point of sale systems can help prevent intentional and unintentional employee theft:

Intentional employee theft: security settings in point of sale software will help prevent an employee from discounting the price of an item, voiding an item, taking a return, or voiding a sale without permission from a manager.  The customer display (little screen that faces the customer which shows items as they are rung up and then an overall total) that comes with a typical point of sale system can help keep an employee honest as well.  If the customer display says "$0.00" but the employee gives a total amount due of $124.95 then something is amiss.

Unintentional employee theft: use of barcode labels with prices will eliminate the need for an employee to guess what the price may be.  Inventory control puts checks and balances in place when it comes to trying to sell a product that is out of stock. Finally, the system does tell the correct amount of change to provide since I rarely find anyone who knows how to correctly count change anymore.

Studies by National Cash Register and feedback that I have received from retail store owners indicates that using a point of sale system will increase net profit by up to 3% by simply reducing employee theft.  That equals about $7,500 in additional net profit for a typical specialty retail store.  Not bad since this is only one aspect of a point of sale system.

Next up - specialty retail point of sale systems for 2013 and beyond as well as more data on how point of sale increases a stores net profit.

Your comments and personal experiences with employee theft and retail point of sale systems are welcomed!

Are you in the US and in need of no cost retail point of sale advice? I'm happy to help and can be reached on my cell at 208-340-5632 (mountain time) or via email at