restaurant Archives - Armagh Cash Register and POS Systems Since 1979

Knowing The Gift Card Laws

Oct 1

Gift Card Laws In Ontario Gift cards are the gifts that keep on giving, or at least they are for retail stores and restaurants. But there are new gift card laws in Canada. Provinces across the country have legislated what retailers and restaurant owners can and can’t do, and merchants need to understand what they are. The rules have been in place since the Consumer Protection Act was changed on October 1st of 2007, but I regularly see my clients incorrectly apply the law to their programs, or ignore the law altogether. On the other hand I get a lot of questions about the gift card regulations from people trying to follow them but aren’t sure how to get the right information, so if you haven’t learned what they are, you may want to read further and become informed – it’s better late than never. Activation Fees Prior to the legislation it was quite common for “Activation Fees” to be charged by store owners on gift certificates and gift cards, the logic being that they were providing a “service” to the customer in creating and offering the gift card. Logically, you can understand the point of view of the merchant; after all, the drug store will charge you at least 5 or 6 bucks for a birthday card to stick it in, why not charge a modest fee to cover the cost of the plastic gift card, envelope, and the significant cost of the purchase and maintenance of the gift card technology? The Ontario government doesn’t see it that way though, and prohibits any activation fees on gift cards. There is one notable exception in the case of shopping malls (rather than individual retailers). Shopping malls may charge an activation fee of no more than $1.50. The reason for this exception is perhaps that shopping malls that sell gift cards redeemable at any merchant tenant within the mall will not be the direct beneficiary of that gift card purchase, so the $1.50 fee is to compensate the mall for the trouble and cost of issuing the card. This seems to me to be an inconsistent position for the government to take. If the government won’t allow retailers to levy a fee, thereby expecting the retailer to take on the cost of the gift card program, it seems to me that the retailers of the shopping mall should shoulder the same burden. But, it’s government legislation after all, and government doesn’t need to make sense or be consistent. Dormancy Fees Some retailers and restaurant owners want to levy a gift card “dormancy fee” for unused balances on gift cards that haven’t been used for a specified period of time. According to Ontario gift card legislation, dormancy fees are banned. That means you can’t impose a fee, penalty, or charge on unused card balances and have it reduce the card down to zero over time. The logic of most merchants for doing so was to solve two problems – reasonably imposed dormancy fees eventually eliminated forgotten or lost cards from the merchant’s gift card database; dormancy fees also contributed to the merchant’s cost of maintaining the technology that housed the gift card “liability” over extended periods of time – conceivably customers could hold onto gift cards for years. The Ontario government has decided that concern is immaterial; merchants are not allowed to charge dormancy fees. Once again, there is an exception for shopping malls. They must maintain the gift card values that they sell for a minimum of 15 months. Consumers may request an extension of an additional three months by requesting it from the mall during the 15th month after they purchased the card. After that, the mall is allowed to charge a “dormancy fee” on the 19th month and monthly thereafter on unused balances of no more than $2.50 a month. Fees That Are Permitted Not all fees pertaining to gift cards are banned. Merchants may charge a fee to customize a gift card. What this is exactly I’m not certain, but it’s written sufficiently vague so as to allow merchants some wiggle room with regard to shipping fees for cards ordered online or over the phone, fancy envelopes and packaging to put gift cards in, and other related materials or services. Fees may also be charged to replace a gift card. Most gift card policies include (or should include) some sort of statement referring to replacement. Many merchants simply state that they will not replace a card that is lost or stolen. If you do allow for a replacement policy, and I think you should consider it for customer service purposes, Ontario legislation allows for the merchant to charge a fee to replace the card. Expiry Dates As of October 1st, 2007, no expiry dates are allowed on gift cards. That includes any expiry dates for cards that are unused for any period of time. This is problematic for most merchants, because it means that they must maintain a gift card database (which is a liability to the merchant) for an unspecified amount of time. This can be inconvenient and costly to the merchant. The Ontario government does not appear to be sympathetic to that argument. Gift Card Policy Your gift card policy, exclusions, limitations, and replacements, for example, must be clearly defined. I recommend that you print it on the back of the card or the promotional material used to sell and deliver the card. If your gift card policy exceeds the available printing space on the card, you can direct the customer to a page on your website that is designed to clearly outline your gift card policy. Loyalty Cards Ontario gift card laws do not apply to loyalty cards, so if you have a customer loyalty program that allows customers to generate points that can be redeemed as cash value at the point of sale in exchange for products or services, legally the merchant may charge fees and allow them to expire as they see fit. The legislation… Read More

In Search of Goldilocks’ Handheld POS

Aug 1

Not too big, not too small… just right. The latest electronic device in the mainstream is the tablet computer – and they have definitely gone mainstream with literally hundreds of sizes, shapes, brands and Operating systems, to suit just about any user. If you own a tablet, then you already know they are not a replacement for everything – they are terrible computer replacements and if you’re trying to buy a tablet to replace your desktop or laptop you’ll probably be disappointed. What they are great for is specific tasks or things you want to do. Some of them are great entertainment devices, and casual web surfing on them is fun. There are thousands of handy apps to keep you occupied or provide you with very specific information or perform specific (read: limited) functions. This doesn’t mean they won’t be computer replacements in the future. I think the tablet format will eventually replace the computer, and the stock prices of the major PC manufacturers certainly reflect that assessment. But until the tablet and handheld industry figures out what customers are looking for and addresses their product shortcomings, there will still be challenges. One of those challenges is the actual size of the tablet’s form factor, despite what you may have heard, size does matter. Especially to the “Goldilocks” restaurant owner looking for the perfect wireless handheld POS tablet solution. A couple of weeks ago I was reading the iMore.com blog, part of the Mobile Nations group of websites, and stumbled upon an article where they speculated two things: 1. “If” Apple will release a 7” tablet, fondly known at the moment as the iPad Mini, and 2. “Why” would Apple offer a 7-inch iPad, in seemingly direct competition with the iPad 2 & 3 and priced around $200? To read the full article written by Rene Ritchie, go to: www.imore.com/apple-release-7-inch-ipad. Ritchie is usually pretty thorough, but in this case I think he misses an important client segment which is extremely important for Apple if they wish to continue growing their market share in a seemingly already saturated market – Business. He barely mentions the business user, but I think the 7” tablet is uniquely suited to the business category, for example the restaurant looking for a device as a restaurant handheld POS terminal, for example Ipad handheld POS, and here’s why. 4” Is Too Small When Handheld POS terminals were new to the POS market, and we were installing devices like the Symbol MC50 wireless handheld, the number one objection we received from restaurants was, “they’re nice, but they’re too small. It’s hard to see the screen and touch the buttons. The servers would prefer to just go and use a POS terminal.” When the 4.4” x 2.32” iPod weighing in at 3.56 ounces hit the scene, the POS industry rushed to show off POS software running on them. The touch sensitivity was dramatically better, we didn’t need to use a stylus anymore, and the user experience was greatly improved. Still however, we had the same complaint from new and existing clients alike, “It’s handy, but it’s too small.” 10” Is Too Big When 10” tablets like the Apple iPad and Toshiba Thrive were released to market, we geeks in the POS industry were elated. Finally! A wireless handheld device we could use as a mobile POS that was large enough to satisfy people with the worst eyesight and the fattest fingers! Off we went to the first demonstration, and proudly pulled it out of our briefcase. People were in awe of our 1.44 pounds and all 9.5 inches of Appley Goodness. When the newness wore off, they said, “That’s sexy, but you know, it’s way too big. When the server is done taking the order, where the hell will she put it?” 7” Is Just Right When Apple releases the iPad Mini, I expect there will be a boom in Apple products once again. Except it won’t be for the entertainment segment – who wants to watch Netflix or surf the web on a 7” screen when you can do it on a 10” screen? It won’t be teens – they would far rather own an iPod or a mobile phone to listen to music, play games, and communicate to Facebook, Twitter, BBM, and email. I think the 7” tablet will be largely preferred by the cost-conscious and size sensitive business segment – and I think you’ll see the first visible usage out in restaurants as handheld POS devices, like POS for the ipad, for tableside order taking service. Large enough to see and use comfortably but small enough to carry around and store in a restaurant server’s change pouch, a 7” tablet is just right for the restaurant looking to deploy wireless handheld POS so they can take advantage of the efficiencies of tableside service. What if Apple Doesn’t Release a 7” Tablet? Don’t forget that Apple releasing a 7” iPad Mini is still purely speculation – albeit educated speculation based on Apple’s manufacturing partners reporting their own manufacturing numbers. And based on Bloomberg’s reporting on those numbers Apple is manufacturing “something” new and it looks like a 7” tablet. But, hey, if they don’t, it’s Apple’s loss. As a restaurant owner you should not wait, you should simply select a 7” Android or Windows tablet you like and deploy that. The benefits of deploying wireless handheld POS in your restaurant far outweigh the drawbacks of not using Apple. Don’t Wait Until The Bears Return to Your Restaurant People have a habit of waiting too long to use technology. Experience is the best teacher, and with technology the spoils go to the people who get in on the ground floor. So when people ask me, “How long should we wait for the right tablet?” Don’t wait at all! Do not forego the benefits and ROI from deploying wireless handheld POS in your restaurant! The profit increase from deploying tableside service will more than pay for you to… Read More