3 Ways Internet Outages Are Killing Your Restaurant’s Profitability

    Why businesses need to maximize connectivity to limit losses.
    Technology | December 4, 2018

    istockphoto / baona

    It’s no secret that Internet-based tools have entirely transformed the restaurant landscape over the past few decades, from payment processing and rewards programs to training and scheduling. While this technology has largely added convenience for restaurant leaders, employees, and guests, the reliance on connectivity has also introduced new challenges to the industry—especially when Internet outages occur.

    Because customers have come to expect this convenience, restaurants risk disappointing them and losing their business when they can no longer perform essential tasks, such as accepting mobile orders or processing credit and gift cards, because of an outage.

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    1. Back-of-House Equipment

    Many restaurant kitchens use some kind of equipment that offers Internet connectivity. For example, ovens in chain restaurants often now have pre-programmed recipes that can be updated chain-wide with the push of a button at corporate. An Internet outage could keep an update from occurring, meaning that food isn’t cooked correctly until service is restored.

    Additionally, Internet outages keep this equipment from management notifications when it needs maintenance to preventing total equipment failure or when the equipment is down and needs immediate attention. In either case, by failing to receive those service notifications quickly, restaurants risk not only losing business for the length of time the equipment is out of service, but also disappointing customers who may not come back.

    2. Service

    Similarly, many restaurants now rely on the Internet to power their ordering systems. Whether front-of-house orders are placed in a system that is connected to the kitchen by the Internet, or whether the Internet is used to receive mobile orders, it’s crucial that this technology has minimal interruptions to maximize profits.

    Internet outages may also impact access to scheduling tools, meaning that managers may not be able to complete their schedules for the week or employees may not be able to check what times they work. This could lead to gaps in coverage, as well as potential issues with predictive scheduling laws that require schedules to be available to workers within certain timeframes.

    3. Payment Authorization

    Many restaurants find ways to work around Internet outages, such as processing credit cards when the Internet is out without access to real-time payment authorization. While this helps restaurants keep customers satisfied, it can lead to costly chargebacks.

    Chargebacks happen when a card is accepted and the account associated with it didn’t have enough money available to cover the transaction. Many contemporary payment processing systems automatically keep these cards from being accepted, but when restaurants can’t connect to the Internet for authorization, there is no way for a restaurant to tell if those funds are available. Once the Internet is restored and the payment is finally processed, credit card companies will reverse payments that have already been made to a restaurant, and the restaurant loses not only the cost of the transaction, but the food and labor costs associated with the meal in question.

    In their 2018 “State of Chargebacks” report, Kount and Chargebacks911 found that a quarter of survey participants said the chargeback rates in their businesses were over 1 percent. Juniper Research’s “Online Payment Fraud” white paper reports that chargeback costs eat up .47 percent of global merchant revenue every year.
    To find out how restaurants can prevent financial losses from chargebacks, service, and operational issues, join QSR and Cybera Thursday, December 13 at 2:00 p.m. Eastern for a webinar. Technology experts will weigh in on how restaurants can minimize Internet downtime and improve profitability.

    By Peggy Carouthers