App sale

POS systems are crucial, but technology doesn’t always work – Marketplace

The early days of the pandemic were the perfect time to sell POS systems to restaurants. Point-of-sale technology that allows customers to order food using QR codes and devices that allow servers to swipe credit cards at diners’ tables have enabled restaurants to transition to contactless dining and to take away.

But while the popularity of point-of-sale systems has leaps during the pandemic, some business owners have concluded that some of the new technologies don’t always work so well.

A few weeks ago, Marisa Johnson worked at a market and cafe near San Diego called Al Fresko. At the start of her shift, she went to call customers with the marketplace’s point-of-sale system, Square, and the screen went “completely black,” she said.

Johnson tried to restart the machine. She unplugged it and tried another outlet – while customers waited to buy fancy olive oil, cocktail mixers and a blanket.

“I see all these items, and in my head, I’m doing the math like, ‘Oh my God, this is a huge buy. I can’t let this go,’ Johnson said. “I’m just trying to find ways to make that sale happen.”

A big sale like that is a big deal for Al Fresko.

“Being a small business in this unique era, if we have a sale for a few hundred dollars, we really need it right now,” owner Jenny Niezgoda said.

To make matters worse, Johnson couldn’t even reach Niezgoda when the system went down because Niezgoda was out of town, visiting family in Texas.

“It’s just, like, the worst thing that can happen when you decide to walk away [for] your first vacation in five years,” Niezgoda said.

With the system down, Johnson made a quick decision: She asked customers to pay using the Venmo app instead. This method worked for the rest of his shift. It was a stressful day, Johnson said.

“You just have to be nice and charming and funny and make light of it, and let them think it’s funny and cute, and they’re actually having a good experience, when it’s an inconvenience” , Johnson said.

Niezgoda said Square shipped a replacement part a few days later.

Before these types of payment systems appeared, businesses used separate devices to handle credit card payments and customer orders. New POS systems like Square do it all, said Lisa Ellis, senior equity analyst at MoffettNathanson.

“It includes that hardware, the card reader, the business software, and the payment processing, all in one package,” Ellis said.

But it does mean that when a POS system fails, it can spell disaster for a business.

“At the end of the day, you can’t really control your own destiny,” said Steve Chu, co-owner of Ekiben, a sandwich restaurant in Baltimore. “There are so many different external factors that go into making a POS system work well.”

On a busy weekend about a month ago, Chu’s POS system, Toast, had a service outage. Chu said he couldn’t do much about it.

“You could call customer service, but in this case it was like, ‘We know there’s a breakdown. Give us some time, and we’ll fix it,'” Chu said.

Toast offers an offline mode that allows businesses to continue accepting payments during service disruptions. But Chu said that wouldn’t have done much for him because customers still wouldn’t have been able to order online. He said the outage probably cost him hundreds of orders, which could have brought in thousands of dollars.

“We had nothing to do for about four hours,” Chu said. “It really blew our minds.”

Throughout the pandemic, POS systems have had to add many additional features. MoffettNathanson’s Ellis said that includes things like contactless payments, QR code ordering and curbside pickup.

“As soon as you had the pandemic, it was essential that you could do the curbside pickup, right?” said Ellis. “And so some of these products may have rolled out features out of necessity, very, very quickly.”

Ellis said these point-of-sale systems handle about a quarter of customer transactions for small businesses. She said the dollar volume the systems handle has grown 30% every year.

“It wouldn’t surprise me if there were growth issues from a customer support and service perspective because they were shipping products as fast as they could to try and keep up with demand,” Ellis said. .

Point-of-sale company Toast wrote Steve Chu a check to reimburse him for business lost during the service outage. Square said it continues to invest in the resiliency of its systems and offers a warranty on equipment.

That said, Chu is on the hunt for a new POS system. Just like Jenny Niezgoda.

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