Point-of-sales downtime kills profits

How much does POS downtime cost?
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Over the weekend, I was cruising in my car, running on fumes. I held my breath down the freeway, fearful that I would run dry, but I had to get to my favorite gas station—I’m loyal that way. Finally, I made it there, only to find that their network was down, meaning they couldn’t accept credit or debit cards and the ATM and Redbox weren’t working. Being a person of the future, I rarely carry cash, so I had to find someplace else.

In my area, there are about six gas stations to choose from within a mile radius. I had gone to my favorite gas station to fill up as usual, but was instead forced to cruise up the street to a competitor, whose gas was a little more expensive. Their network was up, so I was able to use my card. Obviously it was much easier to pay a few cents more per gallon instead of going somewhere for cash and returning to the first gas station. In any case, I got my gas and continued on my adventure.

Cut to a day later. I was on the road headed home from lunch. I remembered that my beer fridge was empty (yes, I have a dedicated fridge for beer), so I thought I’d grab more from the gas station while I was out. Of course, I chose to go to my favorite station again because it has the coldest beer out of any of the other gas stations (that’s why it’s my favorite). You know what I found? The network was still down a day later—no credit or debit cards, no Redbox, cash only. This time, I went to the grocery store across the street where the prices are the same, but the convenience is lower and the beer isn’t nearly as cold.

The thing to think about is the fact that I didn’t choose to go to the gas station’s competitors. The gas station made that decision for me by failing to hire someone who can eliminate their downtime quickly. Their network downtime prevented them from getting my business in two instances over the course of two days. Also, remember that we’re talking about my business exclusively. This is a very busy gas station with many other customers. How much other business did they lose?

Let’s suppose that this gas station averages about ten visitors in an hour. That’s probably low compared to their real number, but ten is an easier number to work with. Now we have to decide how many people would actually use cash to buy gas instead of going somewhere else. Eight of the ten people I asked here at StorageCraft said they only use cards and would go somewhere else if the network was down. Using those numbers would mean eight visitors per hour don’t make a purchase at this gas station, and that doesn’t even account for the fact that of those that carried cash, none of them had enough to even buy a full tank. This particular gas station opens at six a.m. and closes at midnight. That’s eighteen hours a day. Multiply that by two days and you’ve got thirty-six hours. Thirty-six times the eight customers an hour is 288 out of 360 people who couldn’t make a purchase from the gas station. Whether they were buying a pack of smokes or gas is irrelevant for a business with such slim profit margins—they need every customer they can possibly get to make money when, according to the Seattle Times, gross profits on gas sales can be as low as 3 cents a gallon.

This is just a small example of how an everyday business can lose money very quickly when their computer systems go offline. I can also tell you that this particular gas station has had network issues in the past as well, and I was forced to go somewhere else then, just as now. How many times can a business really afford to keep experiencing network downtime? There should be no reason why a business should have to watch their loyal customers drive across the street into the open arms of their smirking competitors.

Want more about downtime? Do you think your business can afford it? Check out the article “Can you afford downtime?

Photo Credit: skpy via Compfight cc

Casey Morgan

Casey Morgan

Casey Morgan is the marketing content specialist at StorageCraft. U of U graduate and lover of words, his experience lies in construction and writing, but his approach to both is the same: start with a firm foundation, build a quality structure, and then throw in some style. If he’s not arguing about comma usage or reading, you'll likely find him and his Labrador hiking, biking, or playing outdoors -- he's even known to strum a few chords by the campfire.

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