Leaving money on the table

16Jun08

I had some family in town for the weekend. On Sunday, we decided to visit a neat little gift shop that sells design and architecture-related products. Once we picked out the items to buy, we went to the checkout area. The cashier started to ring up our purchase, but quickly discovered the cash register was broken. And not just one of them: the store’s entire point-of-sale system was down. We waited patiently, but the manager squashed our hopes by saying that it could be hours before the POS system would be working again.

We asked if there was another way to make the purchase, like having them total the purchase by hand and paying cash. We even said they could keep the change. But no matter what we offered, the store insisted they couldn’t sell us anything until later in the day. The best they could do was hold the items for us, and it was our job to come back when things were working again. Begrudgingly, we accepted this mediocre compromise.

Did we eventually go back and buy the stuff? Well, we tried to, but the POS system went down again just after we arrived. And I’m guessing people who try again are the exception, not the rule. Conservatively, I would say at least 50% of people who are denied a purchase due to technical difficulties never end up returning to complete that purchase. The number might even be as high as 80%. And this trend impacts both real-world and online merchants. When this happens, it’s money left on the table — revenues and profits you can’t ever get back.

What’s the solution? You simply have to provide an alternate purchasing method when the main one is down. Online merchants are great at this — they’ll typically give you a phone number to call when the website’s checkout system isn’t working. But local stores usually just give up when the cash register malfunctions. To remedy this, they could take cash from those who have exact change, or setup a website that staff can reach from the store’s computers to process credit card transactions when the POS is down. In any event, there’s significant money to be gained by ensuring that willing buyers have a way to make a purchase, no matter what goes wrong at the store level.



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