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The Green Sheet Online Edition

July 14, 2008 • Issue 08:07:01

Building business at the curb

By Bulent Ozayaz

Do you often get takeout food from your favorite restaurants? Ever take advantage of carside pickup and wonder why you had to watch your meal get cold on the seat next to you while the server took your credit or debit card back inside to ring up the transaction?

If so, you may have experienced an opportunity in the offing. Sales at full service and quick service restaurants are expected to top $344 billion in 2008, according to the National Restaurant Association.

The association also reported that more than nine of 10 family-dining and casual-dining restaurants offer takeout, as do about 78 percent of fine-dining restaurants; furthermore, 47 percent of adults would use carside takeout if their favorite restaurants offered the service.

Better service, better volume

Both diners and restaurant operators have a shared interest in carside takeout. It gives consumers more ways to satisfy their daily meal plans, and it gives restaurant operators an opportunity to increase sales volume with very little impact on overhead.

So, why isn't carside takeout commonplace? The problem is that restaurants and consumers are converging on a major bottleneck at the POS caused by outdated methods of payment acceptance.

For you, as ISOs and merchant level salespeople, this provides a perfect opening to introduce a discrete payment solution that can be implemented without major changes to existing operations and systems.

Many restaurant owners are eager to update card acceptance because it can bring significant advantages for table turns, which increases potential revenue, as well as productivity and efficiency.

In addition, many restaurateurs want to take advantage of PIN debit payments, which are less expensive to process and are requested by an increasing number of patrons.

Bringing these benefits into the main dining room with pay-at-the-table systems can be a lengthy sell, however, because it requires adapting systems and processes to a new way of doing things, as well as changing the prevailing mindset about the value of buying extra equipment for servers.

Easy implementation, easy sell

But the carside payment option is a different equation altogether. Introducing a carside card acceptance solution is much less intrusive to restaurant operations because it doesn't require any change to dining room workflow. And carside payment helps restaurant operators relieve congestion at the curb.

Typically, restaurants will reserve two or three parking spots for carside pickup. The customer pulls in and a server comes out, hopefully with the food and check in hand. The consumer hands over a card, and the server takes it back inside, leaving the diner to wait and wonder how long his or her food will stay hot.

If the restaurant has a busy takeout business, additional cars may be cruising by, waiting for one of those spots to open up. Worse, according to many restaurant operators, many consumers don't want to watch their cards disappear, so they pull into a parking spot, hop out, and walk into the restaurant to pay at a cash register.

This largely defeats the purpose of carside pickup and may confuse the staff.

To speed customer service and reduce car lines, restaurants need to deliver food to a car and accept payment in one trip. That requires a purpose-built wireless payment solution that can be easily carried and operated by both server and consumer.

If an establishment already has a Wi-Fi network in place or an Internet connection for attaching a wireless router, there is little, if any, cost for adding this service. If Wi-Fi is not an option, a general packet radio service cellular device can be used with relatively low service fees.

Carside payment today can be stand-alone, use a hosted gateway service or be integrated with restaurant management systems.

The latter option represents a significant opportunity for you to broaden your portfolio and demonstrate familiarity with systems that provide advantages - such as retrieving checks by invoice number, eliminating server errors and double entry, and therefore minimizing out of balance situations at the end of the day.

Restaurants can implement carside payment using from one to three devices, depending on business volume, without any major changes to dining room operations.

Less hassle, less churn

Accepting payment carside at the point of service provides immediate benefits. Better efficiency allows restaurants to realize increased revenue through faster turn times. And because consumers never lose sight of their cards, they feel good about patronizing restaurants offering carside payment because the possibility of data skimming is virtually eliminated.

Furthermore, with the ability to accept PIN-based debit, a restaurant can shave off an average of 40 cents per transaction. Converting just 100 transactions weekly could generate savings of more than $2,000 annually - more than enough to justify the investment.

In addition, debit-enabling terminals make your relationships with merchants stickier because the systems are key-injected, and switching service providers would require that terminals be taken to another location, causing a temporary loss of a valuable part of merchants' POS systems.

For the payment professional, a carside payment sale creates a relationship that can be cultivated for a potential pay-at-the-table solution down the road. An estimated 300,000 small-chain or independently owned restaurants have more than $150 billion in combined revenue in the United States. This represents a very lucrative niche.

For you, the window of opportunity is wide open to adapt early to this new market solution and differentiate yourself, so you can compete on value, rather than on price. end of article

Bulent Ozayaz is General Manager and Vice President, Wireless Solutions, North America, with VeriFone. He can be contacted at bulent_ozayaz@verifone.com.

The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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