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POS Solutions submission to the ACCC on customer loyalty schemes

POS SOFTWARE

We were asked and did provide a submission in response to the Australian Competition and Consumer Commission’s (ACCC) customer loyalty schemes draft report 

The final report is available here.

Unfortunately, the final report we feel tends to concentrate in our view on the large loyalty programs and ignore the problems that small and medium-sized businesses (SMB) have here.

Our concerns were several. The first one is that the demands for a privacy statement constitute a significant problem for SMB. These documents can be huge; for example, the Velocity Frequent Flyer Terms and Conditions is about 28,000 words while the Qantas Frequent Flyer Terms is over 20,000 words. Both documents would take over an hour just to read. The cost of producing such a document to an SMB is high, so we were happy that the commission did explicitly accept our solution that a standard privacy statement by appropriate industry organisations should be looked into.

On the other problems, we brought up that SMB would find it challenging to manage a loyalty program over many years the ACCC was silent, and we are disappointed with that. Let say, for example, an SMB business changes its computer system. Now we do not lockout our former customers but many of our competitors do lockout their former customers, I have seen them do it frequently. Many charge hefty fees to run reports on old data files.

A client of ours, asked a compititor of ours to run some reports from his old data. He was quoted $450/hour as he was an unsupported user. When he asked how long it would take, he was told it was unclear but as a punt about 5 hours but it could take longer.  

Now if there has been a change of ownership, this may involve an exchange of legal letters first, which costs a lot before the SMB business owner can get access to the information required, and this takes time. So if there is a dispute other this with either the customer and/or the former owner, it may be impossible to get the required information. The prospect and reality of fraud here are huge. 

One tip, I do feel is that if you are buying an SMB that uses a point-based loyalty program that you clear up this problem before taking over. 

 

 

 

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Insurance on your point of sale system.

POS SOFTWARE

 

Your point of sale system has value and needs to be considered in your business insurance policy. It does not take long for a thief or a fire for you to lose it.

In my experience, the major insurance companies, on cost give a very competitive insurance rate, but you need to be aware that often

Chancy in the sense that often for the most unexpected reasons. 

I have seen them reject claims and the person being insured get nothing. 

They rarely move quickly.

I have seen people being arguing over the settlement for a long time.  It is not a lot of fun when you have a $20,000 bill that you paid for an emergency installation, because you need to have a working computer system is still not reimbursed a year later.

They often do not pay all

Particularly with fraud when the numbers get very high the insurance companies pay only a percentage. Say on a $1 million dollar claim, the judge nominates you for a  10%  legal slap on wrist, well that will be to you $100,000 plus maybe legal fees which will not be reimbursed.

There are several points I would recommend that when getting your business policy you consider.

When getting your business policy you consider.

Physical damage

How much is it going to cost you to install and replace the damage? 

You need here to also consider portable business equipment, like your mobile phones and laptops.

Loss of business while it is being replaced

These costs can quickly add up.

If you offer services like phone cards, bill payments, etc, you may not be able to sell these products until the computers are up and running.

You may need more staff to do the ordering.to record sales, etc

Your VIP club which now on many of our sites is generating about 4% of their trade is off.

If you have a website, it may be affected too.

Then there is loss of goodwill.

Public, Products, Privacy etc. Liability

Here is a horror scenario that happened. A power spike caused a monitor to explode, which sent flying glass throughout the shop. Luckily it was after hours, and the shop was empty, but what would have happened if it was when the shop was open and busy?

Privacy laws and the consequences of breaking it are very scary. There are special policies for this too.

If your EFTPOS is hacked, you might be responsible click here. It would not take long, with skimming your EFTPOS to build up a fair bill. Say you do 40 a day, over six days = 240 EFTPOS transaction. Say $2,000 taken off each that is $500,000+ plus damages plus legal etc.

Miss use of your systems, have a read here.

This is all worth thinking about this when making your business insurance policy.

 

 

 

 

 

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Proof of purchase

POS SOFTWARE

In the point of sale software, there was a record of a purchase of an item by a customer unknown. A person who had no proof that they purchased that item, came in and showed that item and demanded a refund.  The store manager was very suspicious, and soon this started a debate of what exactly is required for proof of purchase.

As a rule for a person to exercise their rights for a refund, a replacement, repair, etc, for an item, they need some proof of purchase. The problem here is that under Australian Consumer Law, it is not described what sufficient proof of purchase is. What it state is that the person must be able to demonstrate that they did purchase that item reasonably. If they can that, then a store may be breaking the law if it denies them this right.

It does not have to be a receipt; for example, here is some example of what proof of purchase can be:

  1. A bank or credit card statement
  2. An agreement with the store, eg a lay-by note
  3. An email

One problem, I can see here is what happens with faded receipts, if I come into your store with essentially a blank sheet of paper, what would you do? If it was me, I would insist on some other evidence.

If you want to know more, click here.

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Notifying us of a change in business ownership

POS SOFTWARE

A person rings us and asks for support. We do not know him although we know the shop. He then asks us for information on how to get a customer listing. Okay, do you see the problem we have?

Here are several more reasons

- We have a policy of free training for new owners, not letting us know means the new owners miss out of a service they could use. 

- The new owner does not own the point of sale licence until we are notified. As such, the former owner of the shop may be responsible for the cost of services that the new owner has incurred.

I am sure you can add a few more.

So there are many sound reasons for making sure that we are notified on a change of business ownership, preferably before the actual transfer takes place. 

All it takes is a few minutes to let us know, then allow us a few days for your request to be completed.

If a valid email address is on the form, both the Releasor and Acceptor will receive an email confirmation once the change of ownership has been completed from us.
 

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Single Touch Payroll

POS SOFTWARE

Single Touch Payroll (STP), I had a few enquires today about it and questioning the advice sheet that we issued about when they need to be ready for STP. What is happening, I think is that all these salesmen for payroll and accounting systems are starting to push everyone to get their systems that they are giving my clients questionable and possibly misleading information. 

The current situation is listed here.

https://www.ato.gov.au/Business/Single-Touch-Payroll/

"

  • Large employers with 20 or more employees should now be reporting through STP, or have applied to us for a later start date.
  • Small employers with 19 or less employees will need to report through STP any time before 30 September 2019 - this is a gradual transition, and not all employers will start reporting at the same time.  
  • If you're an employer with four or less employees you will have additional options."

If all your employees are family members, you actually can get more time still.

But overall most SMB organisations need to decide on how they will handle STP soon, but if you need more time the ATO will probably give it to you and what is right is that they have announced that there will be no penalties for mistakes, missed or late reports for the first year.

Unfortunately, the banks did decide *NOT* to get involved so now if you have not made any decision on how to handle STP, you need to look at the list of ATO approved solutions here.

Note although many of these say that they are free but actually in the details you will see they do have costs in the fine print. Looking through the list the only really free option that I liked was Payroller. Although I confess, I have never used it and have no idea how good it is.

Of the accounting packages, looking at this list that my clients use, Reckon I saw will now be $5 per month extra and MYOB will be $10 per month. 

One big problem I do see with all of this is that in a large business, the payroll is done by the paymaster and the petty cash office does the disbursements (petty cash). In SMB these officers are the same people who prefer to do these together, so saving them time and money as its only one transaction. The problem with STP is that these disbursements will if done as now will show in the STP transfer, which is sure to cause issues with an ATO officer trying to reconcile the figures they are getting as they do not consider a disbursement a payroll item. The only solution is to split these payments up and do them separately, but that is going to cause more work and extra costs to the SMB business.  I cannot see a solution to this with the way it is now. Whatever way you decide to go, you need to investigate this problem.

I hope this all helps.

Update: Some people pointed out to me that they are upset as they feel that the ATO is forcing small businesses to engage 3rd parties with extra costs. I know the problem as I have been using for many years a combination of an old payroll package and a spreadsheet that I programmed many years ago. These have worked just fine.

Well, there is nothing any of us can do, you now need to either download some phone app and manually entering the info or using a current payroll package that costs and will give you no benefit. 

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Warning if you have a business facebook page

POS SOFTWARE

The NSW Supreme Court a few days ago here, made a stunner of a decision that a commercial owner of a Facebook page can be sued for comments made by other people on their FaceBook page.  If you want to read a non-technical article with a decent discussion on the matter, click here. This is well worth a read. 

Although most were stunned, I was not as I do know something about these matters as we were taken to court by a competitor and part of our defence was we felt some of the comments said about us were pretty bad and in fact, they were making up comments about us online. In our case, they settled out of court giving us a substantial five-figure settlement so it never got to a decision, but here it did which is the problem. 

This matter will undoubtedly go to appeal. All that the judge ruled here is that there is a case abd that it can go to trial. It may require a change in the law because if it stays, it will have a dramatic impact on our rights of freedom of speech. 

Okay, what can we all do about it *NOW*? 

For now, those that run online a site including Facebook pages, need to make changes. Currently, we allow whoever wants too, to write what they want on our pages. Now it looks like the court expects us to vet all comments before they are published or at least to delete any comments in a reasonable time or we can be sued too. Currently, I check our Facebook page almost every day, and so far I have never deleted any comments there, but I reckon that now I may need to be prepared to do so. I suggest you do something similar too until this matter is resolved. Knowing our courts and parliament on an urgent matter like this, this matter will be with us for many years. 

 

 

 

 

 

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EOFY last chance

POS SOFTWARE

As the end of the financial year approaches, many of you, as are most people now, considering their plans for any last minute changes this year and what they are going to do next year. 

 

There are several considerations that you should be aware of approaching 30 June date.

 

Currently, the new EFTPOS rates are starting to roll up, and they all seem to be up.  If you intend to stick with your present provider, I suggest you find out now what the new rates will be. If you want a comparison, Assembly thought Westpac (which if you are with Westpac is an extremely inviting option) and Tyro EFTPOS both of which we interface into now have good deals. These rates, I think they are going to look in retrospect a lot better when you are in 2019/20. If you want to know more, let us know ASAP as we are looking at ten days left.

 

Also, the government accelerated investment allowance for 2018/9 ends then too if you are looking at upgrading your computer and/or software requirements well again it is only ten days left.

 

PS If you are starting to budget for the next year, check out your new insurance rates, I got a shock when ours came in. 

 

 

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Webinar on the end of year reporting

POS SOFTWARE

The End of the financial year is an essential time for businesses. We all need to complete the bookkeeping for our tax returns and plan for the new fiscal year. Putting the hard work now can help you get your business organised and prepare for the year ahead.

 

As a minimum, I would suggest you need to get the following in order 

Sales reports
Stock Valuation
Customers Outstanding
Subagents Outstanding (if applicable)

Creditors Outstanding (if you do it from the point of sale software)

 

You need to go over these now as you need to see what can be written off in the debts and stock if you wish to claim a tax deduction for this year.  Otherwise what will happen is these losses may end out in next year's financials.

 

 Click here for a webinar on End of Financial year reporting from your point of sale software. It discusses in detail these reports

Although not required from our software, I do recommend that you do make a special End of Year Backup to store in case you need to refer to it. The 30/June this year is a Sunday. You may also want to check out the ATO Record keeping evaluation tool

Also, note that your stocktake needs to be done very soon, which we will have a webinar on very soon.

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End of the financial year 2019

POS SOFTWARE

The end of the financial year is just coming. We know that this will be for all of us is a very busy time.

Here are some steps from your point of sale software required.

Contact your accountant and get a list of documents that they require. Although our software does not require any additional handling for the end of the financial year, I would suggest as a minimum you need to prepare the following documents

Sales reports
Stock Valuation
Customers Outstanding
Creditors Outstanding
Subagents Outstanding

To do this I would suggest that 

  1. Review your bad debts and credit the accounts that you deem to be bad debts to zero. Otherwise, you may find yourself having to pay income tax and GST on these debts.
  2. Looking at the creditors listing, crediting out what is not going to be paid.
  3. Review your stock. Consider writing off old stock.
  4. Take an end of year backup of your information and file it away somewhere. Remember you will need to keep this for seven years at least after you lodge your return. Please do not use any EL Cheapo USB sticks

To help you we are doing some webinars on these subjects

 

 

  1. Stocktake 
  2. Sales reports 
  3. Stock Valuation 
  4. Customers Outstanding 
  5. Creditors Outstanding 
  6. Subagents Outstanding
 

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Australian Retail Cannabis Market

POS SOFTWARE

US state cannabis laws


This is a map from the Wikipedia of the legality of cannabis by states now in the USA. On October 17, 2018, Canada became the first G7 nation to legalise recreational cannabis fully.  In both places the retail market is enormous. The legal US Cannabis industry grew by about 25% a year to $10.4 billion in the U.S. in 2018, and it now employs more than 250,000 people.

So many retail experts think that soon will come a cannabis boom to Australia. I know I just spoke to one of these experts. To give you a feel of how big they think it is going to be the Australian legal cigarettes sales are about 6 billion dollars, the Australian Cannabis Market he was expecting to become about $22 billion. That may be long term and include cannabinoid-based medicines which are predicted to make a significant impact on the pharmaceutical business. 

Based on the US figures, for retail and using their tobacco industry sales as a base which are 125 billion U.S. dollars, so based on that in Australia, as a first level approximation, I would expect about 500 million dollars and such an industry would employ about 12,000 people. That, of course, would grow as time moves on. You can see why these experts are excited.

What I do know is that currently, medicinal cannabis farms are sprouting up around Australia, with demand for the product ramping up. 

Is it coming for recreational use in Australia, I think so but when I have no idea. It certainly does, however, give food for thought. 

 

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