But losses mount for the home furnishings e-retailer that went public in October.
A Schlotzsky’s Deli franchisee is rolling out a cell-phone-based payment system that allows customers to obtain payment authorization codes before they even place their orders, speeding up the checkout process.
Line-busting is becoming a common phenomenon in high-throughput retail locations. Employees with hand-held, wireless devices can check out customers apart from the POS terminals and speed them on their way. Now a Schlotzsky’s Deli franchise in Overland Park, Kansas, is testing what might be called self-service line-busting with a web-based cell phone payment option.
Instead of waiting until placing the order to begin making payment, Schlotzsky’s customers who subscribe to Wirca Inc.’s PocketChange network can initiate payment while standing in line. The customer calls PocketChange to determine his open-to-buy and receives an authorization code. After he has given his order, the customer gives the clerk the authorization code. The POS terminal, which is equipped with the Aloha Technologies Inc. web-based point-of-sale platform, links to the PocketChange web site to effect the transfer of funds.
So far, the system is working well enough that the franchisee plans to expand it to other locations. “I work the cash register and always ask customers how they like things,” says Bart Hastert, president of franchisee BCT&G Inc. “Everybody’s been really positive about PocketChange because of the ease of use.”
Wirca is subsidizing payment processing fees during the test, but the fees Wirca is planning to charge are a little less than what BCT&G typically pays for conventional Visa or MasterCard processing fees, Hastert says.
Customers using the mobile payment system first call up the PocketChange network to create an account that can be funded with money transferred electronically from credit card or checking accounts. While standing in line in a retail establishment, customers use their cell phones to check the balances in their PocketChange accounts. As long as there are funds available, they will get a 3-digit authorization code to give to the sales clerk at the counter. The clerk then enters the code into the POS terminal, which is constantly connected over a high-bandwidth line to Wirca’s web-based server, and within 10 seconds gets a reply on authorization.
Hastert says he plans to make the PocketChange system available in a second Schlotzsky’s in nearby Olathe, Kansas. That will require implementing the Aloha web-based POS system in the Olathe store at a cost of about $23,000 for four POS terminals. But the company says the investment is worth it to keep up with new ways of serving customers. “It’s the wave of the future,” says co-owner Geri Restivo.