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July 19, 2012

5 Ways Pay at the Table (PATT) and Self-Serve POS Systems Pay for Themselves

If you’re the owner of a small to medium sized eatery that’s either a Quick Serve Restaurant or a casual dining establishment, you may have thought about implementing a pay-at-the-table (PATT) solution, but the chances are very, very good that you have not implemented it. Why? Well, for starters, there’s cost. And for good reason, at least until very recently. Traditionally it cost $1,500 to $5,000 per license per register – and that’s just the license.

Then there was the equipment that had to be bought. And, typically, a monthly support cost of $200-$500 per register. Plus training. So even if you liked the idea and were flirting with it – it went the way of many good ideas that are just too expensive to implement. And that’s why 95 plus percent of small business owners don’t have a POS system like Macy’s or JC Penny’s or even a grocery store. It was just too expensive. And so, chances are, you’re still using clickety clack viny electronic POS terminals that are a relic, a thing of the past.

But suppose the cost turned out to be a small fraction of what you’re thinking it costs? What would you do then?

First, let’s talk about how it works, from the point of view of your customer. One option is putting one or more self-service Kiosks in strategic locations to augment the traditional ordering and payment system, creating in-effect a self-service fast lane for those inclined to use it. A more comprehensive alternative – and the one that should be the goal of every progressive Quick Serve Restaurant or fast casual eatery, is a dedicated station at each table. Imagine something as intuitive and convenient as an iPad, right on the table, with easy to use touch-screen controls, a beautiful and enticing graphics interface for ordering, a simple and easy to use payment processor, and in between ordering and paying – an option for games, entertainment, and information.

Consider the following benefits:

Secure Transactions at the Table

Consumers today are increasingly conscious of the fact that the traditional restaurant experience is one of the few situations in which their credit card leaves their possession and is out of their control – and they correctly recognize this as an invitation to fraud. Retail figured this out a long time ago – hence the prevalence of customer-facing stations which allow the transaction to be processed without the card leaving the possession of the customer. Retailers know that if the card never leaves the customer’s possession, their liability for fraud is all but eliminated.

The Upsell – And “Item-Based Recommendations”

Self-serve terminals never forget to upsell, and research shows that customers are more receptive to an upsell pitch from a kiosk than from a human. This is backed up by various surveys which have shown that deployment of self-serve touch-screens invariably results in increased check averages – producing quick ROI for the deployer. How much of an increase? “On average, we’ve found a 15 percent-per-ticket increase when customers use kiosks,” said Madeline Pantalone, vice president of innovation and market strategies at EMN8, an established kiosk vendor. Other vendors reported similar increases. “We’ve learned customers don’t mind being asked whether they want to upgrade to a combo or if they’d like dessert. We’re not upselling by saying, “Do you want this. Do you want that?” We’re providing options. A variant on the upsell is “Item-Based Recommendations” – just like what you experience when ordering
books from Amazon. Customers who ordered this, also ordered this.”

Turn Your Tables More Quickly

The average checkout and payment procedure of 90 seconds is far faster than the amount of time it takes in most restaurants – even fast-casual – to hail the wait staff, get the bill, hand over your card, get it processed, and get it back. (Estimates in different restaurants range from a low of 2 minutes to a high of 11 minutes for traditional payment processing, with an average of around 4 to 5 minutes being typical). Multiply the time savings by the number of tables served , and this translates into more customers served – again, ROI for the deployer.

Savings in Labor Costs

The move to automated ordering and payment allows the restaurant to focus more on fulfillment of orders, and less on receiving them. There is no question that fewer wait staff are needed – and if there is a need to hire more fulfillment staff, this means there are more orders being taken and more money coming in than under the manual system. Again – ROI for the deployer.

New Revenue Streams

The same terminal used for ordering and payment can also deliver entertainment, advertising, and information. Revenue streams include advertising dollars, and pay-for-games. More ROI for the deployer.

So with all these benefits what’s keeping restaurant owners from adopting the new systems?

The biggest reason: Lack of understanding and fear of price point. Chances are, the average owner of a QSR or fast casual restaurant or small chain is operating on the mistaken assumption that deploying a system is cost prohibitive. What these entrepreneurs don’t understand is that the development of tablet technology has created an entirely different model based on a simple concept – “software as a service.” The iPad alone has created an opportunity for cash-strapped restaurant entrepreneurs that is as profound as the emergence of desk-top publishing as a technology two decades ago. What had previously cost $20,000-$50,000 can now be acquired at a tiny fraction of that cost. Gone are the days of a huge upfront investment. The smart entrepreneur today can get the same features that the “big boys” have, all at a small, affordable monthly fee.

There’s no doubt about it – mobile technology, iPhones, and iPads are revolutionizing the POS industry. Buy the software – and off you go.

Rick Berry is the President of ABC Mobile Pay, Inc, a Valencia, California based company specializing in providing ‘software as a service’ affordable POS solutions. Rick can be reached at