Is Your POS Ready For Black Friday?

The Link between POS Throughput and Sales

It’s Black Friday tomorrow! Now I know, Black Friday is the huge shopping day after Thanksgiving in the US (and seems to be gaining popularity here in Canada), but it’s so much more. That retailers and restaurant owners often don’t understand the greater importance of this day is more than a little surprising. Whether it is Canadian or Is Your POS Ready For Black Friday?American, the symbolism of Black Friday for retailers and restaurant owners needs to be clearly understood. In addition to being a big shopping day for brick and mortar stores and online retailers alike, Black Friday is the date that accountants say retailers stop being in the “red” for the year and begin making a profit – or are in the “black”. That retailers operate for 11 months of the year at a financial loss is a mind blowing concept that many people have a hard time coming to grips with.

Black is Good

Black Friday seems like such an ominous term. Too bad it can’t be Green Friday… it sounds nicer, and more like money… but we Canadians don’t have green money… Oh well. Black Friday it is and we should be glad for it. If nothing else it’s a date on the calendar which seems to give us permission to pull out the garland, play carols over the loudspeakers, and start those Christmas promotions rolling. It gets customers excited about the Christmas season, even if they’re not quite ready yet. So it’s a calendar date you should mark every year as an important reminder of your need for POS Readiness.

What is POS Readiness, you ask? Have you taken the required steps to review your POS and make any necessary improvements and do the proactive maintenance on your point of sale system to ensure your Christmas season hums along profitably? Let me put it another way: If your profit for the year is earned over the next 4 weeks, it means that customers are going to spend more money over the next 4 weeks than they have all year. Ideally, you want them to spend a lot of that cash with you. Are you ready to take advantage of it? Remember, failing to plan is planning to fail.

Do NOT Make Customers Wait

I can’t stand waiting to spend my money. In fact, I won’t. I have too much to do, too little time to do it, and zero tolerance for wasting time being made to wait for a retailer. If I walk into your store or restaurant and see a line-up I may turn around at the door. If I don’t turn around and end up in your checkout line, during my idle time waiting I start thinking about what is not being done while I’m waiting or what I have to do next. Make me wait too much longer, and if I don’t really need or want the item you’re selling me, or I think I can pick it up more conveniently somewhere else, I’m gone. This is death for a retailer. If I happen to find it at the next place easier, faster, and it’s cheaper or better, I’m probably gone forever. I’m not alone in this behavior.

A recent retail time survey done by Great Clips, a Hair Salon chain, recently determined that your customers are not willing to wait long either – 5-10 minutes or less is considered reasonable by 94% of respondents. Any longer than that and they think your business is poorly run, or worse, that you don’t care about their business. Long wait times was ranked 2nd by those surveyed as the thing that annoyed them most – it was a close second behind “rude staff” which was ranked number one.

Study Your Lines

Take an honest assessment of your lines – if you haven’t opened your retail store or restaurant yet, look at the lines in the stores of your peers, and by lines, I mean the line-ups at the point-of-sale terminals or cash registers. Are they long? Are they too long? Get a stopwatch out if you have to. Do customers have to wait longer than 5 minutes to spend their money with you? To solve this you need to take a good hard look at your point-of-sale system. Do you have enough POS terminals to serve your customers at the busiest times of your year? In my experience the answer is no. That’s because most retailers tend to say the same thing when investing in point-of-sale, “We’re not that busy Monday to Friday, we really just need it for Saturdays,” or my seasonal favorite, “We’re only open from this date to that date, we really don’t need it during the rest of the year.” If there was ever a formula for retail or hospitality failure, that most assuredly is it. Most people buy their cash registers for the first 11 months of the year – and they think they can coast on what’s “satisfactory” for the most crucial periods of sales. You can’t. Not if you want your business to thrive over the long-term and have a loyal customer following.

Let me put it another way. If you wanted to move a pile of something from the front of your store to the back of your store, would you get it there faster and easier if I gave you one wheelbarrow or two? Now think of your POS system – your cash register – as your financial wheelbarrow, and you need it to carry the money of your customers from their pocket to your pocket. It’s mission critical – you can’t do it effectively or efficiently without it.

It’s one of the simplest principles in retail – the more POS you have, the more money you make. You will find that more POS terminals increase your non-Christmas sales too. Why? If you’re a restaurant your table turns happen faster due to the increased efficiency and redundancy, so your customers are more likely to come to you for breakfast, lunch, or before a movie time, when time is of the essence. Get them in and out quickly and they will return again and again. If you’re a retail store, triple-A+ personality types like myself are more likely to stop on the way home after work for that quick one or two item pick up, and if happily affected, are more likely to make it a routine. But if you make me late for work after lunch, or drag out what has already been a long day while I’m trying to knock something off my “Honey-Do” list, you’re never going to get me in your store again.

Cashiers! To Your Posts!

If a POS terminal is installed but there is no one there to man it, is it really there? If you do have enough POS terminals at your point of sale, please, PLEASE, man them with staff. There are few things more annoying to your customers than standing in line only to find that you have 5 POS stations but only two of them are open. If you doubt this fact consider your local bank, which is famous for having 7 teller wickets, but only two are open. Customers hate it. If you appropriately personnel your operation your customers will show their appreciation by spending more money in your store.

Every Business Has A “Black Friday”

I recognize that not everyone benefits from the wave of consumer insanity brought on by the Christmas season, but I would be willing to guess that nearly every retail operation has something similar to it. The Black Friday for a garden centre might be the Easter or Victoria Day weekend, depending where those dates fall and what the weather is like. Their “Christmas” season comes in the spring. They literally make it or break it during a short period of time between April and June.

So what’s your “Black Friday”? Put another way, what is the most important day or days of the year for your business? What about Mother’s Day, Father’s Day, Valentine’s Day, Halloween, Thanksgiving, or New Year’s Eve? For summer seasonal businesses it’s all about June to August, with their Black Fridays being the two or three coveted long weekends in between. The number of POS stations you have is directly linked to how you are able to cope with the increased sales volumes at those critical times. Your ability to cope with the increased traffic is directly linked to your image in the eyes and minds of your customers. Ultimately, what your customers think about you is the only thing that matters. Image is everything.

If you’re reading this today, it may be too late for Black Friday, maybe even too late for the Christmas season of 2012. But it’s never too late for a retail or restaurant manager to recognize this important customer service strategy. This lesson is universal for any retailer or restaurant; you just need to apply these principles to your busiest season and adjust appropriately. If you do, you and your customers will see a lot less red and your bottom line will be more likely in the black.

Grocery POS Catapults Vincenzo’s Into The Future

Italian Grocery Store Says Armagh A Perfect FitVincenzo_Grocery_POS_Checkout

With plans to more than triple in size in 2008, the Caccioppoli brothers knew they had to find a grocery POS system that could handle the growing needs of Vincenzo’s, the family’s bustling grocery business in Waterloo.

After looking at a number of systems and providers, they opted for Armagh and the Catapult grocery POS system – they haven’t looked back.

“We wanted a system that would be faster and more reliable than our previous system,” recalls Carmine Caccioppoli. “We also wanted something that would allow us to take advantage of new technologies. We looked at probably half a dozen different grocery POS systems, and the Catapult system was really in that niche that we were looking for.”

Armagh as a company, he adds, gave the brothers a sense of comfort that they would be well looked after. “Some of the other providers were very large, and we didn’t feel they would be as responsive as Armagh has proven to be over time.”

Carmine notes it was also important to find a system that would adapt to their unique style of food retailing. “We are the kind of store where people enjoy shopping, and as a result of that we sell a high volume of gift cards. The Catapult grocery POS system is really strong in this area.”

Another unique feature about Vincenzo’s is its partnership with local providers who deliver specialized products like seafood and fresh meats. “We needed a grocery POS system that would allow customers to pick up these products in the store from our partners, and pay for them along with everything else at the front end. Catapult does that seamlessly, and provides accurate reporting at the end of day so we can reimburse our partners for their sales.”

Vincenzos_Italian_Grocery_Store_Front_Waterloo_OntarioCarmine notes that his brother Tony appreciates Catapult’s ability to provide fast and detailed reporting on any aspect of sales within the store. “It lets him know, for instance, what is working and what is not. He also uses it to help motivate employees to promote sales.”

From humble beginnings operating out of the family home more than 40 years ago, Carmine says his family is pleased to be serving the needs of children and grandchildren of original customers.

To download the pdf version of this onsite report click here.

About Armagh, The POS Specialists

Armagh has been serving the grocery POS industry in Canada since 1979, delivering solutions for a range of operators, from single-unit small businesses to multi-unit national chains. We are specialists in touch screen and scanning point of sale (POS) systems for both restaurants and retail stores, cash registers, scales, liquor inventory control systems, and grocery label and wrapping equipment.

With 30+ years POS industry experience
the sales staff at Armagh provides experienced consultants in point-of-purchase management, customer service efficiency, process automation, and restaurant order management.

Armagh’s award winning Catapult Grocery POS Software is best-in-class, and Armagh is a Certified Toshiba POS Partner.

Knowing The Rules

Gift Card Laws In Ontario

Gift cards are the gifts that keep on giving, or at least they are for retail stores and restaurants. But there are rules for gift cards in Canada. Provinces across the country have legislated what retailers and restaurant owners can and can’t do, and merchants need to understand what they are. The rules have been in place since the Consumer Protection Act was changed on October 1st of 2007, but I regularly see my clients incorrectly apply the law to their programs, or ignore the law altogether. On the other hand I get a lot of questions about the gift card regulations from people trying to follow them but aren’t sure how to get the right information, so if you haven’t learned what they are, you may want to read further and become informed – it’s better late than never.

Activation Fees

Prior to the legislation it was quite common for “Activation Fees” to be charged by store owners on gift certificates and gift cards, the logic being that they were providing a “service” to the customer in creating and offering the gift card. Logically, you can understand the point of view of the merchant; after all, the drug store will charge you at least 5 or 6 bucks for a birthday card to stick it in, why not charge a modest fee to cover the cost of the plastic gift card, envelope, and the significant cost of the purchase and maintenance of the gift card technology? The Ontario government doesn’t see it that way though, and prohibits any activation fees on gift cards.

There is one notable exception in the case of shopping malls (rather than individual retailers). Shopping malls may charge an activation fee of no more than $1.50. The reason for this exception is perhaps that shopping malls that sell gift cards redeemable at any merchant tenant within the mall will not be the direct beneficiary of that gift card purchase, so the $1.50 fee is to compensate the mall for the trouble and cost of issuing the card. This seems to me to be an inconsistent position for the government to take. If the government won’t allow retailers to levy a fee, thereby expecting the retailer to take on the cost of the gift card program, it seems to me that the retailers of the shopping mall should shoulder the same burden. But, it’s government legislation after all, and government doesn’t need to make sense or be consistent.

Dormancy Fees

Some retailers and restaurant owners want to levy a gift card “dormancy fee” for unused balances on gift cards that haven’t been used for a specified period of time. According to Ontario gift card legislation, dormancy fees are banned. That means you can’t impose a fee, penalty, or charge on unused card balances and have it reduce the card down to zero over time. The logic of most merchants for doing so was to solve two problems – reasonably imposed dormancy fees eventually eliminated forgotten or lost cards from the merchant’s gift card database; dormancy fees also contributed to the merchant’s cost of maintaining the technology that housed the gift card “liability” over extended periods of time – conceivably customers could hold onto gift cards for years. The Ontario government has decided that concern is immaterial; merchants are not allowed to charge dormancy fees.

Once again, there is an exception for shopping malls. They must maintain the gift card values that they sell for a minimum of 15 months. Consumers may request an extension of an additional three months by requesting it from the mall during the 15th month after they purchased the card. After that, the mall is allowed to charge a “dormancy fee” on the 19th month and monthly thereafter on unused balances of no more than $2.50 a month.

Fees That Are Permitted

Not all fees pertaining to gift cards are banned. Merchants may charge a fee to customize a gift card. What this is exactly I’m not certain, but it’s written sufficiently vague so as to allow merchants some wiggle room with regard to shipping fees for cards ordered online or over the phone, fancy envelopes and packaging to put gift cards in, and other related materials or services.

Fees may also be charged to replace a gift card. Most gift card policies include (or should include) some sort of statement referring to replacement. Many merchants simply state that they will not replace a card that is lost or stolen. If you do allow for a replacement policy, and I think you should consider it for customer service purposes, Ontario legislation allows for the merchant to charge a fee to replace the card.

Expiry Dates

As of October 1st, 2007, no expiry dates are allowed on gift cards. That includes any expiry dates for cards that are unused for any period of time. This is problematic for most merchants, because it means that they must maintain a gift card database (which is a liability to the merchant) for an unspecified amount of time. This can be inconvenient and costly to the merchant. The Ontario government does not appear to be sympathetic to that argument.

Gift Card Policy

Your gift card policy, exclusions, limitations, and replacements, for example, must be clearly defined. I recommend that you print it on the back of the card or the promotional material used to sell and deliver the card. If your gift card policy exceeds the available printing space on the card, you can direct the customer to a page on your website that is designed to clearly outline your gift card policy.

Loyalty Cards

Ontario gift card legislation does not apply to loyalty cards, so if you have a customer loyalty program that allows customers to generate points that can be redeemed as cash value at the point of sale in exchange for products or services, legally the merchant may charge fees and allow them to expire as they see fit. The legislation also does not apply to cards that have federal jurisdiction such as prepaid phone cards. Cards, certificates, vouchers, or coupons that provide a specific product or service, such as one massage at a spa, are also not covered under the legislation.

Fines And Penalties

Some retail and restaurant owners will choose to ignore the gift card rules or feign ignorance of them, and they do so at their own peril. In Ontario, fines for non-compliance with gift card and consumer protection legislation ranges from $50,000 and/or two years in prison for the individual and the corporation can be fined up to $250,000. Fines are similar for the rest of Canada.

Integrity Matters

There is no question that the benefits of gift cards are significant for merchant and customer alike, but retailers and restaurant owners need to be aware of the rules and regulations that apply to gift cards and make sure that their own gift card programs are not contrary to the law in their province or territory. Merchants not only risk fines and penalties for non-compliance but they also face a consequence far worse – the potential damage of their own goodwill and credibility in the eyes of their customers.

For more information about Ontario gift card rules visit: http://www.sse.gov.on.ca/mcs/en/Pages/Gift_Cards.aspx