Archive for the “Consumer Insights” Category

How to target the lucrative summer traveler market

Targeting the lucrative summer traveler market

With the summer vacation season in full gear, C-stores should take advantage of travelers who are passing through for work or pleasure. Just as brands segment and market to their regular customers, it’s also possible to reach out to different categories of travelers with tailored offers designed to get them into your stores and buying more.

Download the Paytronix report, Where All Roads Lead: Why Your C-Stores Should Target Travelers

In this report, Paytronix explains the data science behind segmenting travelers from other customers and then further subdividing the segment into frequent and occasional travelers. The report describes how marketers can leverage this data to:

  • Identify trends within the traveler population
  • Determine what products each segment is purchasing
  • Develop marketing strategies to target each segment

Travelers represent a tremendous opportunity for brands to reinforce their unique value propositions. Whether they are truck drivers coming off the road after a long day, or vacationers in the midst of generating lifelong memories, the members of this segment deserve special attention. Targeting them can go a long way toward building loyalty and increasing revenue.

Understanding Comp Cards vs Gift Cards

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. 

Paytronix Congratulates Regina Jerome on Her Hospitality Technology Lifetime Achievement Award

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! 

Using data to emerge as the Halloween Hero

Every year the competition is on: which house is going to give out the best stuff at Halloween? Not everyone can be the legendary one that gives out full-sized candy bars. And then there are the folks that go all out with decorations, creating a haunted experience that rivals Disney. And let’s face it, you’re not going to be the Red Sox catcher who gave out autographs when facing an empty candy bowl. […]