Hidden Costs of Outdated Bar POS Systems

Operational inefficiencies that cost you money 

Wasted labor 

In the fast-paced world of bartending, every second counts. When your bar’s POS system isn’t pulling its weight, you’ll feel the inefficiencies at every turn. 

The most apparent effects are slow ticket times and less-than-stellar turnaround. Those lingering moments can add up quickly when your bartenders have to wait for a lagging POS system or manually ring in orders on a cash register. These inefficient protocols are a strain on your staff and can cause your customers to lose patience.  

However, they can also drain your budget. Consider how much you’re paying for labor to do tasks that your bar’s cloud-based POS system could otherwise automate. For example, tedious manual inventory, guest management, and mobile ordering are just a few of the jobs the right technology can do for you.  

Inventory losses 

Did you know that modern bar POS software can also double as an inventory management system? That’s right! When you input detailed menu information and accurate inventory counts into your system, your POS system can let you know when you’re running low on your best-selling items and help you determine which ingredients to include in your next order. This can reduce both wasted items due to spoilage and lost sales when you under-order key ingredients.  

A cloud-based POS system such as CAKE lets staff know right in from them what’s 86’d and available to order. No more having to walk back to customers and sadly let them know you’re out of the dish they want.  

A great POS system holds a vast amount of data. You can use all this information to pinpoint weak links in your operation. For example, when you compare your actual inventory with your theoretical inventory (according to your POS system), you can identify menu items that tend to get heavy pours–or bartenders who don’t follow pour guidelines. Then, adjust your menu or your training protocols to address the issue.  

Compliance Risk 

Your obsolete POS system can also be a major compliance risk. When companies stop offering software updates, your bar or restaurant is more vulnerable to dangerous–and costly–security breaches. As your legacy POS system enters the End of Service (EOS) stage, you will no longer receive critical security updates. This means your bar won’t meet the PCI standards every business must maintain, and you could face hefty fines in return.   

Even if you don’t suffer from a data breach, you’ll almost certainly face increasing malfunctions from your aging POS system, including longer transaction times and glitchy user interfaces.  

The emotional toll: Stress, burnout, and lost opportunities 

Owner and manager frustrations 

When Tak Matsuba began managing The Japanese Tea House in San Francisco, he knew something had to change. There was often a line of 35 customers outside waiting for service, and their old-school cash register only slowed down the operation.  

But when the Tea House adopted a cloud-based POS system, they immediately reduced their lines by half and increased staff tips by 50%.  

Ippudo, a popular New York City sushi spot, also cut their wait times in half by implementing mobile waitlist management. 

These improvements aren’t unusual for businesses that make the switch. When you have a solid business model, welcoming staff, and products your customers crave, sometimes the only missing piece is the right POS system to bring all these winning elements together.  

Staff morale 

A 2018 study found that employees whose workplaces utilized outdated technology were 450% more likely to consider quitting than those who worked for up-to-date companies. These numbers are pretty compelling–and when you consider the high employee turnover rate of bars and restaurants, they’re even more staggering.  

Employees who face an uphill battle just to complete the bare necessities aren’t likely to go above and beyond to craft the perfect customer experience. They’ll be too busy compensating for outdated technology, making their jobs harder.  

Don’t assume your customers aren’t picking up on the tension your staff is feeling. When your employees are struggling, it can throw off the whole vibe of your establishment.  

Missed marketing opportunities 

Unfortunately, outdated bar POS software can take away from the ultimate customer experience in more ways than one. If your existing system can’t incorporate detailed information about your guests, it’s probably time for an upgrade.  

Elite restaurant POS systems can integrate loyalty programs to encourage customer retention. These programs reward your customers for their purchases in the form of discounts, vouchers, and free menu items. They also allow you to gain valuable insight into guest preferences and cater to their specific needs.   

A strong loyalty program can help you turn first-time visitors into repeat customers, so this is a marketing strategy you won’t want to miss out on. 

Security risks and your bar’s reputation 

Data breaches 

Outdated bar POS systems can significantly increase the risks of serious data breaches. When you’re working with obsolete hardware and storing sensitive data on your own internal servers, your chances of data theft are magnified, putting you and your customers in a dangerous position.  

Remember, analog systems like cash registers won’t necessarily keep your information safe, either. These old-school systems don’t allow you to pre-authorize credit cards, so your staff might have to physically hold onto a customer’s card to start a tab. This puts your employees in an uncomfortable position and presents a significant liability.  

Finally, data breaches can target programs you might not think about, like tax software. Unless your Internet connection is fully locked down, you’re only asking for trouble.  

Downtime disasters 

Internet outages never occur at a convenient time, especially in a busy bar. When your legacy POS system loses connection, everything grinds to a halt.  

Even cash registers can fall victim to faulty connections. They depend on the Internet for every credit card purchase, so when your signal falls flat, you’ll have to resort to cash transactions or writing down credit card numbers, which makes customers uneasy for good reason. 

Fortunately, modern solutions can help you avoid these disasters.  

If you’re unfamiliar with cloud-based POS systems, you might assume they’re more dependent on a reliable Internet connection than any other method. However, they have built-in protocols to mitigate interruptions. When these systems lose their Internet connection, they keep on truckin’. Your staff can continue inputting orders and running credit cards. As soon as your service is re-established, your POS will automatically upload all the necessary information to the cloud.  

Negative reviews 

Wasting time with an outdated POS system could ultimately come back to haunt you in the form of negative reviews. When customers experience unusually long wait times and slow service, they might choose to vent their frustrations on search-engine listings, social media pages, or online forums. These public complaints can tank your reputation and cost you future customers.  

With the rise of alternative payment methods, such as QR codes, guests might eventually lose patience with spots that only take cash or credit, especially when they know your competitors are taking advantage of these technological advances.  

Of course, you may never hear about these grievances from your customers. They could simply choose to find a different bar that meets their needs and stop visiting to your establishment.  

Beyond hardware: Is your POS software out of date? 

Missed features 

You might update your POS software religiously, but that still doesn’t mean your setup is ahead of the curve. Legacy systems simply aren’t built like the new and improved options.  

First, your POS should supply you with plenty of valuable data that you can use to increase your bottom line. Advanced analytics are a basic feature of modern cloud-based POS systems. When you put this technology to work, it should inform you of critical shortcomings in your operation and shine a light on your customer’s preferences so you know which elements to prioritize.  

Your competitors are probably already using this data to gain an advantage. If you don’t arm yourself with the same knowledge, you’ll likely fall behind.  

Finally, you’re missing out on popular features like seamless online ordering, guest management software, and tableside ordering. Check out this case study on how one of these elements revolutized Pacific Sushi’s business.  

Integration headaches 

You’ll find tons of valuable integrations out there, but most are made to work with modern cloud-based POS systems. When you try to implement these features into legacy systems, you’re bound to run into some speed bumps.  

However, with a state-of-the-art cloud-based POS service, you can enjoy maximized efficiency through integrated inventory management systems, loyalty programs, and employee scheduling software. You can even use certain integrations to record and pay your sales tax every month without having to think about it.  

These streamlined systems can reduce your workload, increase your revenue, and make it easier than ever to satisfy your customers.  

Action time: How to spot an outdated POS and what to do 

Red-flag checklist 

If you’ve wondered how to determine when it’s time to upgrade your bar and restaurant POS system, you’re not alone! Here are some telltale signs that it’s time to move on. 

• Frequent system crashes. 
• Your system is too slow to keep up with your fast-based business, even when the software is fully up-to-date.  
• Your POS system is a glorified cash register–you can only use it to ring in orders. 
• Your bartenders and servers are using one or two central terminals instead of handheld tablets for tableside ordering.  
• It doesn’t help you manage inventory in a meaningful way.  
• It can only process cash and card transactions.  
• You can only access important data from your on-site terminals (and that data is limited).  
• It can’t support innovative integrations. 
• You must maintain expensive in-house servers.  
• You’re paying a premium for old-school hardware that’s quickly becoming obsolete.  

Hidden-cost worksheet 

If you’re still unsure about investing in a new POS system, consider tracking your current expenses to see where you’re losing money. Here is a Google Sheets template that can get you started.  

Next steps 

Once you decide you’re ready to make the change, it’s essential to partner with a POS provider that can meet your needs, provide around-the-clock support, and work with you to bring your vision to life.  

CAKE’s revolutionary POS software was made with bars and restaurants in mind. Our suite of technology allows you to streamline your operations, enhance your customer experience, and boost your bottom line.  

Contact us today for a personalized demo to learn how we can help you get ahead of the curve.  

Conclusion 

If you’re still clinging to an outdated POS system, it might be time to consider what an upgrade could mean for your bar or restaurant. After all, if you’re not embracing cutting-edge technology, you can expect to be left behind. While we don’t often endorse jumping on the bandwagon just because everybody else is doing it, welcoming modern technology is an exception.   

Ancient tech doesn’t just hold you back in the modern era of online ordering and automation. It also opens you up to major risks like data breaches, compliance issues, and excessive shrinkage.  

A great bar POS system can simplify your day-to-day operations, make it easier for your employees to do their jobs, and enhance the customer experience. It should also increase your bottom line! If your current system isn’t cutting it—or you’re curious about how a POS system upgrade could revolutionize your bar or restaurant—reach out today for a free demo or consultation.