At some point you have probably seen an ad or had a salesperson selling a “Free” or low-cost point of sale system. Free offers sound enticing enough, but in the restaurant business is there really such thing as free?
No, of course not.
Understanding the Restaurant Point of Sale Landscape
Restaurant software companies actively develop ‘loss-leader’ and ‘subsidy marketing’ techniques to attract new business. These companies are owned by large payment parent companies who control credit card processing rates. These nationwide companies might be publicly traded, or venture backed. The goals of these companies are for greater market share and aggressive financing techniques to gain new business. In many cases, these systems are proprietary and can only be used with the one payments provider. Remember when the iPhone came out and the only wireless provider was AT&T?
When you enter into a contract and are “locked in”, your ability to move to a different processor changes and you’re giving the provider the ability to tack on added fees. These hidden fees are either padded into the merchant statement or automatically enrolled.
Point of Sale Dealers on the other hand are service-based businesses providing solutions to restaurants by reselling hardware, software and services known as a restaurant POS solution. These solutions are closer to the actual cost of ownership of a Point of Sale System but with a high degree of alignment with the customer. In almost all cases there will be a higher level of local service and a better overall solution aligned to the needs of the business (compared to the needs of investors). An example of high degree of alignment with the processing side of the business is Cervion’s Processing Pledge where customers can choose from a variety of preferred payment providers or choose their own processing company.
Research
It’s important to understand exactly what you are purchasing when it comes to a POS System, after all it is the backbone of your restaurant operations. When you see a “Free” POS Solution, ask yourself the following questions to see if it is really the right solution for you.
- Is this the best product for my business needs?
- How is the actual cost of the hardware, software, and services being subsidized?
Read the Contract
There are many reasons you might need to terminate from a contract early; you end up needing a solution with more advanced features or your restaurant has to close temporarily or even permanently. Many of these contracts with free POS providers require liquidated damage fees for software, hardware and credit card processing. These early termination fees can cost a restaurant thousands of dollars.
Credit Card processing
Are you required to use a specific credit card processor? If so, this means they are getting you in the door with a low-cost point of sale solution, but their real money is in credit card processing fees. Beware and make sure you completely understand how the fee structure works.
We have seen it a lot, restaurant owners find a point of sale, which might be what they need at a low cost, but when they get their monthly bills, the processing fees are hundreds of dollars more than expected every month.
Proprietary Hardware
Many point of sale software companies offer the hardware free, but not without caveats. When it’s time for a piece of hardware to be fixed or replaced, it’s going to cost you as it’s not typically included in contracts for “free” or low-cost POS solutions. Of course, it’s not cheap either! Much like owning a luxury car, when something happens you have to bring it to a special mechanic who orders special parts. This is the same situation; you will need to go through your point-of-sale company to replace the parts which can be extremely costly.
Now that you’ve done the research, is the “free” offer really “free”? If not, it’s time to look for a local point of sale provider, like Cervion Systems. As your local, trusted point of sale expert, we provide solutions that are best for your business needs. We want to watch you succeed, not sell you on a cheap solution where you’ll be looking to run far away in a few months. Not only do we offer point of sale solutions with advanced features that are a perfect fit for a full-service restaurant / bar atmosphere; our contracts are short, easy to read and are not highly punitive with liquidated damage fees. You can choose your own credit card processor, or we can refer you to our friends and family processing program that offers affordable processing fees. Lastly, you are not locked into expensive hardware that only we can provide. You can choose to purchase or lease equipment from us, replacement is then included in your contract or you can bring your own hardware and we’ll install everything for you!
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Cervion Systems is a Point of Sale provider with offices in New York, Pennsylvania and South Florida. Founded in 1996, with over 20 years of professional POS service experience, Cervion is the leading VAR (value added reseller) offering restaurant Point of Sale. Cervion provides restaurants and bars with local sales and service, modern Apple iPad point of sale systems and affordable programs for new and existing restaurants. Please contact Cervion Systems at 877.476.7246 or sales@cervion.com.
