Tuesday, November 4, 2014

Why You Should Be Avoiding Clover, HarborTouch & QuickBooks Point of Sale

As I am now receiving near daily calls and emails from folks considering the Clover point of sale solution, I wanted to explain why you should not be considering point of sale systems like Square, Clover, HarborTouch, and QuickBooks point of sale.

The only assumptions I am making is that your business is generating at least $60,000 in annual gross sales and 90% of payment is made using debit or credit cards.

When you purchase a point of sale system that requires you to use one specific company for merchant services, you are at the mercy of that company when it comes to the rates that they charge you for merchant services. What I have seen happen time and time again is that these companies will raise your rates every 90 days or so.

While paying 1/2% more in merchant service fees (which is what seems to be the norm with these companies) may not seem like much - lets see how that adds up over 5 years.

If your business processes $200,000 in debit and credit card transactions annually the 1/2% is $1000/year so you could easily end up paying $4000+ in excessive merchant services fees over the course of 5 years.

I don't know about you but I would rather have that money as profit!

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 (I am on Mountain Time) or via email at kevinantosh@gmail.com. There is also a contact form to the right that can be used to reach me.


  1. You can put any kind of spin on this you want to. Pretty much every POS system is proprietary on some level. If you want to process credit cards integrated through any POS, you must get the POS company involved. You are then at their mercy, which most make money off the processing. So you may be able to pick from a handful of processors with some POS systems, but since they are losing out on that revenue, they normally charge a hefty fee. If you ever want to change again, guess what, you must get them involved and pay whatever you want. Processing and POS are simply intertwine too much to have them separate.

    My biggest argument with some POS systems like Harbortouch is this. They are not in the business to make money off the POS like everyone else. They're a processor and since they are investing thousands of dollars into the merchants business, they are more motivated than anyone else to improve the system so your business grows and you process more cards. They don't break even for at least several years. Would you not want a processor that is more of a partner than someone that brings no value to the table?

    This is business, it comes down to how well the business person negotiates things. Processing fees are always negotiable. We are all in business to make money as well. Just some companies like Harbortouch have more skin in the game than others, so what's important to them is more in line with what's important to the merchants. I don't see any other company still willing to invest thousands of dollars into a merchant's business. All of the cheap tablet pos systems don't even compare.


    1. Curtis - thanks for taking the time to comment. My personal experience as a retail store and restaurant manager (plus having provided a variety of point of sale systems to thousands of businesses over the years) is that being locked in to using one company for merchant services means paying higher merchant services fees. That is why I stress that point of sale systems need to be flexible so a merchant can pick, choose, and change who they use for merchant services.

      Systems like Retail Pro, Microsoft RMS, NCR Silver, MICROS, and Bindo POS work with nearly every merchant services company. Switching merchant services settings in these programs is very easy and any costs are nominal (if any) and easily recouped via lower merchant services fees.

      Again - I appreciate you taking the time to write a thoughtful comment!

  2. Kevin,

    The systems you mentioned, especially NCR and Micros, must have the dealer involved. They do not charge nominal fees! That's why companies like Harbortouch became involved in the POS space because all of the POS dealers were locking them out. Taking over the processing and if you are lucky to even earn the processing business, they charge the merchant so much money that it discourages them to process with anyone but who they are partnered with. Merchants very seldom have access to the settings of the software to be able to change the processing information. Every big name you mentioned definitely do not allow that.

    When it comes to paying higher processing fees, that's all relative. Compared to what? If there is $100 worth of profit on an account, you could ALWAYS say the merchant is paying too much. You could say there should only be $80, $50, or even $20/mo in profit. If there is even a dime of profit on the account, anyone could say they are paying too much. The important thing is what they are paying is comparable to the industry average and not higher. We are all in business for a profit right? What's a reasonable profit margin is subject to one's opinion but the best baseline to use is the industry average. But to say one is paying 0.50% too high, I could then say the same thing on what you think would be a fair profit margin.


    1. I have personally worked with every POS solution that I mentioned (still have full working copies of many of them) and, aside from MICROS, the merchant services settings are easily changed by someone with average software skills. If a business owner wants to hire someone to make the changes then they will likely pay for an hour of labor.

      The 1/2% higher than normal fees is not something that I made up but comes from real world experience having seen actual merchant services statements as well as folks contacting me via this blog site, at speaking engagements, and via my YouTube channel. In some cases I have been contacted by folks who have ended up paying 4.5% for card present transactions (and these are retail stores with good credit and low risk card present sales).

      Obviously business owners have to weigh and factor what is important to them. My goal is to only point out what I have learned over the years and let folks decide for themselves what is important to them.

      Thanks again for the comments - we have different viewpoints but this is a good way for business owners to see both sides of a service that is essential to their business.

  3. As a Merchant Services provider, and a provider of Clover systems, I think you raise a good issue. However, merchants are not necessarily as 'stuck' as you suggest. The systems you've mentioned such as Micros for example, while allowing you to choose from a few processors, charge hefty fees to reprogram anytime you want to change - usually rendering it infeasible. I have seen Micros charge $200 per terminal to change a couple settings so you can swith processors. For restaurants and some retailers, that can quickly approach $1000 or more. Not to mention the other drawbacks of these systems such as licensing, maintenance fees and software upgrades that don't necessarily apply with Clover, Intuit and newer app-based and cloud-based systems.

    If this is a big concern for merchants, virtually every system can 'turn off' internal cc processing allowing you to still use the full functionality of their systems while swiping cc through a standalone terminal. Then you can choose any processor you want.

    In other cases I have found Clover merchants being overcharged so much by the bank that sold them the system that the reduction in fees is enough to pay for an entirely new POS system. Seems crazy but it happens. Banks are like convenience stores when it comes to cc processing, the most expensive way to go.

    Bottom line: know who you're doing business with, what processor, what sales agent, and who the local rep is. All should be solid companies with a track record. Even the local rep should have years not months in the local area and provide references if you ask. Check them out.

    'Buyer beware' is still a foundational principle in a free market system. Do your homework, don't fall for cheap programs that are too good to be true, and don't be afraid to ask "what if I want to change processors" or "what happens if we close our doors?"

    Tim Gilbertsen

  4. Hi Kevin,

    I found your blog post searching for POS system comparisons. I'm curious why you wouldn't recommend Harbortouch to customers? I agree that if a customer is spending a large chunk of money upfront out-of-pocket for a new POS system, customers should have the option to use whatever merchant provider they want to, but that isn't always a good thing either.

    With several traditional and mobile systems we've sold over the years, nearly every customer wanted to use their bank or some merchant provider you've never even heard of to integrate into their POS. Then they have to go through a 3rd party gateway to make the connection with the POS and merchant provider. And then again, the customer would have to call another number to resolve processing issues. My point is the integration between the POS and merchant provider can sometimes be a sticky situation. Additionally, I’ve seen where not all POS features may be available to a customer depending on what processor they’re using.

    I personally like what Harbortouch (I am a Harbortouch dealer for full disclosure) has done to help merchants. I like the fact that everything is integrated and the customer has one phone number to call when there is an issue. That call doesn’t come to me, the merchant provider, the gateway, it goes to Harbortouch support. There is a great deal of value in that.

    Yes there is a 3 contract involved with the merchant, but if Harbortouch is going to invest in a business by providing the hardware and software with no up-front costs, then yes there is going to be a contract and of course they want the credit card processing. I’ve seen where some dealers will charge high processing rates under the guise of offering a free pos system, but that is not how I run my business. There are a lot of quality and honest Harbortouch dealers out there. I’ve worked the numbers with the other systems I used to sell, and I personally save my customers thousands of dollars over 3 years comparatively on the POS and merchant services.

    I appreciate the opportunity to express my opinion and to share my experiences. And thanks for opening the discussion.

    Best, Jason.

    1. Thanks Jason for your insights - much appreciated!

      This post is several years old but the core advice still holds true - never invest in a POS system that locks you into using one company for merchant services. I've seen/heard way too many complaints over the years.

      As for multi-vendor support, the easiest way to avoid the "blame game" is to use a preferred payment provider that is familiar with your POS system. I've found that this makes for seamless support while still keeping your options open.

      Again, your perspective is much appreciated as I'm only passing along what I have personally encountered over the years as a Retail/Restaurant Manager and the sales/support of over 20 different POS systems - including HarborTouch, Clover and QuickBooks Point of Sale.

      On a side note for other readers - Jason does mention some things that shows he is looking out for the merchant and not just trying to make a buck - nice to see that!