Yes, you read the title of this article correctly: your POS system can help you slow The Great Resignation.
I've worked with thousands of restaurants over the years and certainly the last year and a half has been the toughest most have known. The ecosystem has changed, and it’s anyone’s guess when things will return to a pre-pandemic sense of normal.
Seating and spaces have been reconfigured to accommodate COVID mandates, in addition to menus reworked due to supply chain shortages.
But we can all agree that labor shortages continue to linger as a major issue. According to the New York Times and data from the National Restaurant Association, restaurant employment has risen each month this year, but staffing levels at quick-service and fast-casual restaurants was still down 6 percent over the same period.
Further, there is the domino effect: when one employee quits, more stress is placed on those who remain. Soon, another employee will quit, and unless new employees are hired to replace those who depart, the domino effect continues and the business buckles under the strain of too-few employees. Not to mention the quality concerns of constantly having to recruit, rehire, retrain, and repeat this process with new employees.
Some restaurants have closed altogether not because of COVID restrictions but because of an inability to retain employees. It feels like you can’t scroll through social media these days without finding a post complaining about service at a restaurant or reading about a restaurant closure due to staffing issues.
If there were a way to stave off people quitting, reduce stress, and increase pay for employees—while improving the dining experience for customers—wouldn’t every restaurant owner be interested?
One answer answer lies in the POS system. A smarter, more responsive, up-to-date POS system that can not only bring additional revenues to your establishment but also keep your employees happy. Let’s take a look.
1. Accept tips.
Tipping at quick-service restaurant/fast casual restaurants is now the norm and a must.I’m continually shocked that some restaurants in this category still do not accept tips.
According to the New York Times, in 2019, 48.5 percent of customers left tips in cafes, and 46.5 percent of customers left tips in fast casual restaurants. Indeed, people do believe in tipping, even in restaurants without waitstaff. These tips would go directly in your employees’ pockets.
Make sure your processor has the tipping module turned on, and you’d be surprised how much your customers will leave in tips. Ideally this should be a simple call to your processor or POS provider if this isn’t already enabled.
2. Program for on-screen tip suggestions.
Great! So now you realize the importance of asking for tips. But do you have smart tip capabilities enabled, such as tip on screen or tip suggestions?
Automated buttons with tip suggestions are the way to go, and can increase tip amounts by upwards of 50 percent. The higher, the better of course, because this means more money for your employees. Make it easier for your customer to simply select from an on-screen option of “$1, $2, $3” for example and watch your overall tip amount skyrocket.
More tips equals happier staff. Happier staff and you should see less turnover.
According to the New York Times article on tipping cited above, the average tip for both cafes and fast casual restaurants was around 17 percent, but this number can be increased with a smarter POS.
People can still select "No tip," but you’d be surprised that even at quick-service restaurant and fast-casual restaurants, people overwhelmingly leave tips, especially if you provide it as an easy on screen option.
3. Adjust tip errors as they occur.
When doing old-school tips on receipts (paper), it’s not unheard of for employees to forget to enter their tips at the end of their shift, we’ve all seen it. I’ve personally seen many businesses who either eat the tip in this scenario or don’t pay the tip out to their staff as it was never entered. Overall this should be a very easy fix to your processor to have this adjusted.
Making sure you are working with a company that has impeccable service can easily make these headaches a nonissue and quickly put the lost revenue back into your employees pockets.
4. Flexible Ordering Options
Beyond tipping, self service and order at the table options are growing in popularity. Online ordering, QR codes, kiosks, and tableside tablets have all become commonplace in the post-COVID world. These trends will continue throughout 2022 and are great options for restaurants to add.
These options do require more work on the part of the customer but they allow you to run your restaurant more efficiently even if short staffed and put less stress on your employees. Less stressed employees mean happier employees and ideally less turnover.
5. Offer cash discounting.
This has been a trend for several years now, even before the pandemic: offering different prices for payments by cash vs. a credit or debit card.
While this might seem like it only provides a benefit for the restaurant owner, it can also offer a benefit for the employee. By not having to pay processing fees, a business owner can instead reinvest the funds back into the business and redistribute to their employees.
These savings can be used to hire more employees or provide tips, bonuses, or gift cards to current employees. It’s a win-win: the business owner pays less to the processor, and employees get extra money.
As an example, I personally know a restaurant owner who saved $4,000 per month in processing fees when switching to our cash discount program. From these savings, he distributed $1,000 to employees in the form of tips, with some restrictions, of course—the employees had to work 25 or more hours.
6. Make sure your POS is responsive and has backup options.
Your business relies on a POS system that cannot fail—especially during high-volume times like lunch and dinner. And generally your system is reliable. However, does your business have a backup option if your POS or credit card machine fails? It’s a question most restaurants don’t consider until it’s too late. I’ve personally seen restaurants lose thousands of dollars in a single day due to their POS being down.
When a POS system is down, everyone suffers: customers can’t pay with cards (which means they might order less, or simply leave altogether), leading to less sales and ultimately less tips. Not to mention the stress your staff faces when telling customers your POS system and credit card acceptance is down. This also can lead to a lower overall tip percentage as a customer may not have as much cash on hand to leave the same tip they usually would on a card.
Your processor, including any and all software and hardware, are key components to not only accepting payments but also reducing employee frustration and turnover. Make sure you have a backup plan. You may not think you need it now, but you will certainly wish you had it if/when you need it.
7. Offer (and promote) gift cards.
Gift cards offer so many benefits for restaurants. I'm always surprised when restaurant owners don’t offer them, especially when there are gift card programs that come entirely free.
Aside from the obvious marketing and branding benefits, when people carry a balance on a gift card, they are aware of it and they know that they need to spend it. Customers might be using a gift card because they received it as a gift (obviously), but loyal customers might just buy gift cards for convenience and keep adding a balance to it for themselves. If you regularly offer gift card promotions—i.e., save 10 percent when you add money to the card—you can ensure steady usage.
But how does it help your staff and reduce turnover? Allow customers to tip via gift card. I’ve seen customers leave hefty tips when paying via gift card.
In sum, better paid and less frustrated employees are happier—and stick around. While higher tips and less stress about the restaurant’s processes and IT might not be the only factors that keep a worker from quitting, every little bit helps.
Take a closer look at the features of your POS system. Determine which features can be added to enhance the experience not only of your employees but also of your customers. Don't be afraid to ask more of your processor, and if they aren’t willing to work with you to improve your operations, even in small ways like adding tip buttons or even answering the phone immediately when you call, then it’s time to re-evaluate your relationship with them.
Technology is out there to help everybody win, and in today’s ecosystem, quick-service restaurant businesses must use every advantage to their benefit to retain their talent.
Dustin Magaziner is CEO of PayBright, founded in 2021 with the motto, “Merchant Services, Done Right.” Top to bottom, PayBright is focused on providing agents and ISOs, and in turn their merchants, with the absolute best experience in the industry. By offering the absolute best rates, no contracts, free terminals and POS for each merchant and true transparency, PayBright has found a way to set itself apart in an industry of little differentiation. Feel free to reach out to Dustin with any questions at firstname.lastname@example.org.