Paytronix Admin

As gift card sales come roaring back and diners return with gusto, it’s worth taking a hard look at a common but costly practice that ends up taking a toll on restaurants: using gift cards as comp cards.

Complimentary (comp) programs entitle guests to receive products or special discounts at your restaurants. Whether used as a goodwill gesture for guests or to extend a privilege to employees, providing comps is a part of doing business.

Restaurants use gift cards as a means to comp guests. Like paper certificates, guests readily recognize gift cards, which are convenient to issue, and easy to redeem. Unfortunately, comp programs follow distinct financial accounting procedures. Failure to isolate comp transactions from standard gift card transactions creates a “double taxation” penalty that can overstate your sales tax and income tax burden by as much as 12%!

Common pains of comp programs

Comps typically represent 3-5% of total sales — a meaningful slice of your business — and are often not well controlled or properly processed. The main risks of poorly administered comp programs include fraud and abuse, as well as improper financial accounting.

Fraud and Abuse – No One Wants to Lose Money
Inadequate measurement and control of comp programs can result in fraudulent behavior. Paytronix customers report that restaurants lose one in 10 controllable comp dollars to fraud. Paper certificates lack inherent controls and are particularly susceptible. Fraud is not limited to paper-based systems, though. A discount button on your POS system without appropriate controls also invites overuse and abuse.

Improper Financial Accounting = Increased Tax Burden
Improper processing of comp transactions also causes needless financial losses. Recording the value of comp transactions requires specific accounting treatment. You fall victim to the “double taxation” penalty when that treatment is applied incorrectly.

Fundamentally, this taxation penalty occurs because the comp value is a restaurant expense, not revenue. When you fail to appropriately recognize this expense, you artificially inflate your revenues, overstate your net income, and thereby overstate your income and sales tax liability. This overstating is a costly and unnecessary expense.

Gift Cards, the Common Offender
This taxation penalty often arises when comp situations are handled by issuing a gift card. A gift card is the wrong device for comp transactions. Comp cards and gift cards are both valuable elements in retaining and attracting guests. But, they are distinctly different instruments.

A gift card is sold to guests, represents taxable revenue, and appears on the balance sheet as an accounting liability until redemption.

The value on a comp card is recognized as an accounting expense. A comp should appear as a discount that lowers the subtotal of a guest’s check and reduces the amount of tax associated with the transaction. The comp is given to a guest – not sold – and therefore should be reflected as a business expense, not as revenue.

Consequences of Mixing Gift and Comp Cards
Companies have sometimes had to restate earnings to correct for improper comp treatment. This is because they could not differentiate their comp and gift card balances and were forced by auditors to expense 25% of the combined outstanding balance.

Many chains try to backout the comp transactions in their general ledger, but it is difficult to differentiate these transactions and to accurately account for the amount of comps extended. For example, some companies require that receipts be mailed to corporate for processing. This is a labor-intensive process where lost and unidentified receipts understate the true comp amounts.

Interested in the latest news on Gift Cards? Check out our 2022 Restaurant Gift Card Report

Plus, you cannot back out the sales tax. States generally conduct audits based on POS reports, not general ledger data. Assigning proper tax rates gets very complex when a check has different items with different tax rates and is paid with comp and other tenders.

In short, fraud and mishandled comp programs cost you money, so our comp cards provide you with a safe, practical way to offer complimentary value to guests while halting fraud and assuring proper accounting for every comp transaction. 

Today, the Top Women in Restaurant Technology Awards program honored Regina Jerome, Senior Vice President of Information Technology at Uno Pizzeria & Grill, as one of a select number of outstanding women from both restaurants and technology suppliers who are reimagining restaurant processes and operations while demonstrating excellence in leadership, inventiveness, and skill. As a longtime partner of Uno Pizzeria & Grill and a close collaborator with Regina, the entre Paytronix team celebrates this honor. 

Regina has been active in restaurants ever since she was a head waiter 32 years ago.  She’s served as a leader in every step of the restaurant IT chain at well known brands such as Bertucci’s and Legal Sea Food, and as Senior Vice President of Information Technology at Uno Pizzeria & Grill where she led the transformation of their tech stack.   

Want to learn about the transformation of Uno’s Tech Stack straight from Regina? Listen to our partner webinar with The Spoon. 

Since launching Paytronix Order & Delivery, Uno Pizzeria & Grill has taken more than 58,000 orders across its 100 restaurants. The brand has also consistently seen the totals for online checks be 10% larger than those placed on-site. 

What Regina Jerome accomplished at Uno Pizzeria & Grill in 18 months would have taken five years somewhere else. Her deep understanding of restaurant systems, her ability to integrate those systems, and her focus on collecting and analyzing system data so that Uno can make better decisions have made a big impact on the brand.  Regina’s Hospitality Technology Lifetime Achievement Award is well-earned, and the whole Paytronix team celebrates with Regina.   

Congratulations! 

It’s a food-service marketer’s dream: the ideal guest experience from couch to couch. 

A great promotion targets the proper segment of guests with an impeccably relevant offer. When the offer is redeemed, the order experience is frictionless to prevent transaction abandonment. And of course, the right follow-up message is then sent to ensure that guests will continue patronizing your brand (and tell their friends).

Paytronix takes the guesswork out of this process with tools that enable the savvy marketer to create a perfect menu, streamline the guest experience, and keep customers coming back.

1. AI to IA^SM: Artificial intelligence is the key to creating a customized guest experience. Your guests want to feel recognized as soon as they walk in the door or log into your mobile app. That means sending relevant promotions via effective segmentation, building customer profiles, and knowing the right follow-up message to send after a transaction – all on an individual customer basis. The Paytronix platform sums it up with “artificial intelligence to individual action.” (AI to IA^SM). Drawing from a deep well of customer data, centered around customer behavior and sales trends, machine learning tools can create targeted campaigns that help you get the most out of your marketing dollars.  
    
   Want to read about AI to IA^SM in action at Caribou Coffee? 

2. Order Experience Builder: With online ordering becoming ubiquitous, customer expectations have shifted. Conditioned by Amazon, guests now expect a simple, straightforward, branded experience. The stakes are particularly high for restaurants, as guests are easily frustrated by out-of-date information and wary of establishments with poor ordering interfaces.   
    
   Paytronix provides substantial customization from the beginning, enabling you to incorporate the latest features right away with a lower cost of ownership. New features like Order Experience Builder^SM and FEEDback^SM are part of an end-to-end platform that helps marketers delight today’s digitally connected consumers. Order Experience Builder changes how marketers design and deploy online ordering, providing the tools to create powerful, interactive, and appealing online menus simply and easily. Meanwhile, FEEDback facilitates instant responses from customers at the time they place and receive their order, enabling managers to reply to comments in real time, when the opportunity to foster long-term loyalty is strongest.
    
   Leveraging AI-driven guest intelligence as a core part of the platform, the Order Experience Builder offers the best of both worlds. Restaurants no longer need to choose between using a standard ordering template and paying a designer for a customized site.

3. Multi-variant Menu Testing: Your menu is more than just a list of dishes – it’s a playbook for your customers. And every great playbook needs to be analyzed. The Paytronix platform allows for multi-variant menu testing so you can examine all of the small details that ultimately make a big difference in a guest’s experience. Through menu testing, restaurants are able to experiment with menu designs and use AI to find the most effective layout for items and descriptions. Determining the right menu configuration can boost your average basket size and increase loyalty enrollment.

So are you ready to make guests happy from couch to couch? Request a demo of Paytronix Order & Delivery or consult the great resources for online ordering on the Paytronix website.

Two decades ago, the only item in a food service establishment’s tech stack was the point-of-sale (POS) system. Such an arrangement is nearly unthinkable today, as a thriving modern restaurant relies on a dizzying number of advanced solutions. Technology impacts every customer touchpoint, every interaction between front and back of house, every accounting decision, and every supply concern. 

As an industry leader in ordering-and-delivery and loyalty software for the past 20 years, Paytronix has helped optimize the tech stack of thousands of clients. These simplified tech stacks limit the staff actions required to complete a task, integrate more smoothly across platforms, and empower a better guest experience. What do we recommend? Give these tips a try:

1. Slim Down Your Tech Stack

Paytronix reduces your restaurant’s tech stack through an all-in-one customer experience platform that integrates with your current POS. The platform enables you to create and deploy omnichannel campaigns in five minutes or less while combining your services. And clients that combine their online ordering and loyalty programs increase order frequency by an average of 18%.

No tech stack is too complex. With over 450 integrations, Paytronix has you covered.

2. Integrations:   

A lot has changed over the last 25 years. Restaurant tech stacks now encompass nearly every aspect of front- and back-of-house operations, making the integration of disparate technologies critical for efficient operations. 

Paytronix has handled hundreds of integration projects ranging from the simple to the complex, and those haven’t been limited to in-house systems. Many involve third-party delivery platforms like DoorDash and Uber Eats. You no longer need to sweat multi-platform updates in the middle of a Friday night rush because the Paytronix platform automatically pushes menu changes to all of the third-party platforms to which your business subscribes.

Interested in integrations for your company but not sure where to begin? The Paytronix Integrations Playbook gives you the inside scoop.

3. Master the Art of Delivery.

Once the pandemic took hold, millions of Americans who had never considered delivery as an option found themselves using ordering platforms for the first time. That trend seems here to stay, as recent surveys indicate that 93% of restaurants have or plan to offer the ability to order online. Millennials and Gen Z have also shown a tremendous willingness to order from home. When those generations visit your ordering site, will they like what they see?

Paytronix brings its best-in-class Order & Delivery product to restaurants of every category type, both through customizable first-party ordering and simplified third-party integration. Your restaurant will be easily able to support both platforms through the integrations mentioned in the previous section. 

Moreover, the delivery experience can be taken to the next level with a custom bundle of other Paytronix products, such as loyalty and feedback tools. Giving your guests the ease of ordering, getting rewards, and providing feedback on one easy-to-access digital platform will result in more orders and larger basket sizes. 

Is an inflated tech stack taking the wind out of your IT group’s sails? Paytronix is ready to make your day. Request a demo of Paytronix Order & Delivery or consult the great tech resources on the Paytronix website.