Between 2015 to 2018, noncash payments grew by 6.7% per year, which was 1.6 percentage points higher than the previous three years. With so many consumers going cashless, restaurants have more reasons than ever to implement payment processing solutions that speed up transactions and protect sensitive credit card information.
With integrated payment processing, credit card numbers and other transactional data automatically sync with your POS system and accounting software, giving you a comprehensive snapshot of your restaurant’s daily sales. Since order entry and accounting errors can be costly, here are the top reasons you can’t afford to miss out on integrating your payments in 2020:
Your Customers Don’t Like to Wait
Two researchers at INSEAD business school studied the effects of waiting in line and found that customers are heavily influenced by the outcome when assessing the quality of their overall experience. Even if customers have to wait a long time, they will rate the experience as positive as long as it ends well – meaning they are able to get their food, pay fast, and be on their way. The study also concluded that consumers would rather wait in a slow moving short line than a fast moving long line even if they have to spend the same amount of time. As a result, a payment processing system that works efficiently and reliably is crucial for delivering a positive outcome, even if customers are initially frustrated by a long line at the checkout.
It Protects Your Customers’ Data
With payment processing integrated into your POS system, you avoid the security issues of manually entering credit and debit card numbers. Daily batching means that payment information automatically syncs with your accounting software, allowing managers to focus on the many other tasks they have to complete. They no longer have to trust others to handle sensitive information, making it more difficult for people with malicious intent to access your customers’ private data.
By deleting cardholder data after a transaction takes place, POS software works with your credit and debit card processing system to ensure PCI compliance, meaning you won’t be as much of a target for data breaches as restaurants who store this information on their servers.
It’s Easier to Avoid and Correct Mistakes
Without an integrated payments system, restaurants risk losing money even if they proactively address the possibility for error. According to one estimate, it can cost $1,400 per month to manually verify that the total check amount matches the POS payment amount when you factor in the time employees spend going through each transaction.
Failure to take this precaution, however, can lead to even more losses. One all too common scenario occurs when a server charges a customer’s credit card once for the pre-tip amount, and another time for the correct amount including the tip. By the time you notice this double entry error, you may already be losing business from a negative review pointing out the mistake on social media. Even if the customer brings this issue to your attention, the time spent looking into and correcting it—especially if compounded over several guests per week—can negate any profit you would have made from the transaction in the first place.
Device agnostic payment processing solutions work with any POS system, saving you from the need to upgrade both your payment and point of sale technologies at the same time. They also help you avoid double entry errors by syncing pricing information directly from the menu stored in your POS system, freeing employees of the burden of manual price entry and tip calculation.
Knowledge is Power
Last November, Carrols Restaurant Group, whose 1,000 locations make it the largest operator of Burger King restaurants, saw its same-store sales drop by 2.9% and revenue decrease by $12.4 million due to a double discount error. Although the CEO of Carrols attributed this to a mistake rather than a specific accounting or systems issue, having a more robust real-time reporting structure may have allowed the company to catch the error faster.
While double promotion errors started appearing in early June, Carrols did not catch the mistake until late August, and it persisted even though some employees felt they were undercharging customers. Payment systems that integrate with your POS terminal and automatically send data to accounting software in real-time, or at least on a daily basis, allow your managers to analyze smaller batches of payment information to make sure actual revenues from a promotion are in line with projections.
For more payment processing topics, check out our posts on payment solutions trends in 2020 and the reasons your customers are committing friendly fraud.