At the Georgia Restaurant Association annual meeting in June, several experts in the POS industry sat down to discuss why it’s so important for restaurants in Georgia to validate compliance with PCI requirements, some tools to help you, and what’s on the horizon. Here is a synopsis of their conversation.
According to 2012 Verizon report, 54 percent of data breaches in the past year have been in the hospitality industry, and that’s increased over prior years.
“You are a restaurant. You want to serve people and make them happy,” says Brett Lockwood, partner with Smith Gambrell & Russell who chairs the firm’s Technology Transactions Practice.“But you also have PCI security data issues to deal with, and that’s just the reality.”
“It really is important to check your business financially,” says Larry R. Godfrey, director of sales engineering for Heartland Payment Solutions. “Your customers are trusting you with their data. It really is your job to protect that.”
The Current Dangers
The main issue in today’s hacker and credit card theft world is that the U.S. still uses a credit card with a magnetic stripe – that black bar on the back of every card.
“What makes it so dangerous is that all your personal data is stored on that mag stripe, such as your name, your phone number, your address,” says Walt Davis, general manager of Retail Data Systems Southeast. “As a restaurateur, you’re responsible for protecting your consumers just as much as some of these big companies.”
In 2002, credit card theft reach epidemic levels in the U.S. So in 2003, Congress passed the FACT Act (Fair and Accurate Credit Transactions Act), which prohibited businesses from printing more than five digits of any customer’s credit card number or expiration date on a receipt.
If a breach occurs, you have the option to do nothing, but it could ruin your business. In a nutshell, your bank will contact you that they have detected a credit card breach that has originated at your restaurant. You’ll contact your internet provider and credit card processor, and you’ll be required to stop processing credit cards immediately. You may have to pay a forensic auditor, who will find your security holes.
“That forensic audit is going to cost you anywhere from $8,000 to $12,000 minimum,” Davis says.
You’ll also contact your POS provider, and they will have to re-secure the site. You’ll have to buy a brand new computer server, because your old server is now evidence of a federal crime and is now federal property.
Not only that, but if you are a small business that experiences a breach, you will then be treated as a Tier 1 company to ensure measures are taken to keep a breach from happening again.
“Tier 1s have to go through this validation process every year that can cost tens of thousands of dollars. Even if you’re a Tier 4 that suffers a breach, you’re going to be held accountable for doing that for some time in the foreseeable future,” Godfrey says. “So if you want to take cards after the breach, you’re going to be treated like a Tier 1. You’re going to have to pay a company to come in and do an audit every quarter.”
Davis notes that on top of these costs, the restaurateur is also liable for the fraudulent charges – i.e. they are the one who must pay the customer back for the charges that showed up on their credit card statement.
Still, one of the most prevalent ways to steal credit card information today is through a RAM scraper, which accesses the credit card data on your RAM at the moment before it is re-encrypted. The criminal can use many ways to access your computer and install malware, including obtaining passwords or accessing your computer via Facebook or email. “This is the most common pattern of theft that’s being used in most restaurants,” Davis says.
“Why should you care about credit card fraud?” asks Davis. “Because you, the merchant, will be held responsible. Not your bank, not your POS provider, and not your credit card company.”
And that can get expensive.
There are four tiers of merchants based on the number of transactions they do annually. Most restaurants, aside from national chains, fall into Tier 4. While Tiers 1 through 3 are required to validate 100 percent compliance, they must spend hundreds of thousands of dollars to do so. Independent businesses like most of the restaurants in Georgia, however, cannot afford to spend that kind of money to validate compliance. But it’s important that they do so. The restaurants are expected to self-assess themselves and are still held liable if fraudulent activity occurs.
“The reason you have to do it is when you sign your merchant agreement with your credit card processor, regardless of who that processor is, there’s a section on data security and privacy,” Davis says. “It clearly states that you are to do the following things to be compliant: You’re supposed to have a firewall, you’re supposed to have data security, and you’re supposed to complete a self-assessment questionnaire.”
The catch-22 is that they will not ask you for proof of these things until a breach has already occurred.
“Most merchants totally underestimate credit card fraud and the consequences that follow,” Davis says. “Those fines cover the costs banks incur when they have to reissue the cards,” Godfrey says. “But the main cost is the buyback. Not only do you incur these costs, you’re responsible for paying back that consumer who had that fraudulent charge filed against them. So that, a lot of times, is the biggest expense.”
For these reasons and more, it’s so important to validate your compliance now and not after a breach occurs – not just for monetary reasons, but for your restaurant’s integrity.
“There are companies out there who will help you with the compliance aspects,” Davis says, “but nothing can help with the loss of your brand.
“This is serious business,” Davis says. “It is not about filling out these forms just to make the processors happy. Validate your compliance. There is no other option. As a restaurateur, you owe it to yourselves, your merchant and your customers to protect their data.”
Thankfully, there are several new technologies on the horizon that can help restaurants protect their customer’s data better. One has been around for more than a decade in Europe and is headed our way this spring.
“The primary thing about the European payment system is the microprocessor chip that’s embedded into the cards,” says Mike Seymour, COO of Postec.
Known as EMV (Europay, Mastercard, Visa), the processing system reads a 1” square chip in the corner of the card when you insert the card into the reader.
“The chip card systems based on EMV are being phased in across the world with names such as IC credit or, most commonly, Chip and Pin,” Seymour says, adding that 30 percent of payments worldwide today are EMV payments.“What that refers to is the microprocessor chip that’s embedded in the card, plus the four-digit pin that the consumer enters at the time of the transaction, like you would in the U.S. with a debit card transaction.”
Sixteen years after the development of the EMV and 12 years after its launch in Europe, Visa announced plans in October 2011 to push the U.S. toward adopting the EMV standard, and Mastercard has also followed suit, Seymour says. The initial push by Visa is to have all credit card processors in the U.S. support EMV by April 1, 2013.
“In dollar terms, credit card fraud represents nearly 7 cents for every $100 of debit or signature transaction in the U.S.,” Seymour says. “Based on EMV rollouts in other countries, fraud can be expected to drop by 50 percent or more once the transition is complete.”
Are EMV and smart cards enough to completely protect your business when they come online next year? Not necessarily. “Smart cards will prevent someone from using a fraudulent card. It’s much more difficult to make a counterfeit smart card than it is to make a counterfeit mag stripe card. Hopefully it will cut down on the amount of cards that come into your business that are fraudulent,” Godfrey says. “That’s really the power behind the EMV and smart cards.”
The transition won’t happen overnight, Seymour cautions. “Everybody’s going to have to replace all their card readers,” he says, adding that for a while, the readers will be able to accept all kinds of cards as the country transitions. “Ten, 15 years from now, mag stripe cards will be extinct.”
For now, there are still several things you can do to protect your restaurant from hackers and credit card thieves – and for good reason.
“A lot of folks think that hackers are just going after big business,” says Heartland’s Godfrey. “But what’s happened over the past few years, is that [large] Tier 1 merchants have done a pretty good job of securing their networks and systems, so really where the hackers are going now is where the doors are unlocked. They know with a lot less effort, they can get into a smaller business.
“They’re not going to get as much data back, but it’s a lot easier for them,” Godfrey says. “So that mid-tier merchant, with 11-100 employees, is really right in the crosshairs of the hackers.”
Along with the Chip and Pin card, tokenization and anti-encryption are two other methods that can help reduce the risk of your restaurant being hacked.
“The important thing to know about these technologies is that they’re not mutually exclusive of each other,” Godfrey says. “In fact, using all three is the way to really protect your system.”
Tokenization adds an extra layer of protection to your customer’s data. It’s similar to encryption, except it virtually can’t be cracked.
“There’s no mathematical correlation between that code and the original value, so there’s no way you can figure out that original card number from the token,” Godfrey says. He says this type of protection cannot protect you from customers using fake credit cards, but “it’s great when you have to hold on to that card number after the fact.”
Anti-encryption, aka point-to-point encryption, encrypts the card data as soon as the card is swiped.
“It’s tamper resistant,” Godfrey says, noting that it works best against RAM scrapers. “If somebody went in there and tried to mess with it, it would just wipe itself out. If you’ve got something hackers want, and that’s the credit card data, what encryption
does is it removes the value. So even if they do get in, there’s nothing of value to steal.”
Where is all this headed? While the Chip and Pin cards are coming our way next year, many experts predict that, ultimately, using our smart phones to pay for things will be most popular.“If you ask me, I think smart phones is where we’re going to go,” Godfrey says.
“The consumers are going to drive some of that. I think the younger generation especially wants that ability,” Seymour says.“When you look at the percentage of smart phones and how that’s increased over the past few years, my personal feeling is that yes, that’s where we’ll end up.”
â€œOne of the most interesting aspects of SmartMenu is that itâ€™s health-based. It can help the customer make better food selections by suggesting side items and other add-ons that make up a healthy meal,â€ explains Chan. â€œI donâ€™t consider myself that knowledgeable about making healthy choices. I wonâ€™t think about how many calories are in the handful of chips I just put in my mouth. The general public just doesnâ€™t have this wisdom. Theyâ€™d like to make their own choices, but they’re not knowledgeable enough, so SmartMenu give them the tools to help balance their diet.â€
Itâ€™s all about choice
SmartMenu is an interactive POS system that providers diners with a very personalized ordering experience. The self-service terminal allows customers to select their meals quickly and efficiently and, at the same time, it tracks and addresses their preferences, such as if the person is health-conscious or price-sensitive. When a diner swipes his or her card, SmartMenu recognizes the person and automatically suggests what he or she ordered on the previous visit. If the customer asks for recommendations, SmartMenu will make suggestions for selections, up-selling from the regular menu or the healthier menu based on those stored preferences.
Jiten Chhabra, founder and CEO of Usable Health, says that SmartMenu is a great help to not only health-conscious diners but also to those with specific health concerns such as high cholesterol and diabetes.
â€œIf a customer indicates that he or she has specific health needs, the system will address those needs,â€ says Chhabra. â€œSmartMenu incorporates a â€˜food swapperâ€™ engine that will make recommendations for menu items and suggest combinations of items, such as â€˜have a small salad and a small sandwich,â€™ to the customer. Even if a restaurant doesn’t have many healthy choices available, SmartMenu can make selections based on portion sizes.â€
Itâ€™s a win-win situation â€” operators make more money on margins by selling combinations of menu items that wouldnâ€™t otherwise be found by the customer, and customers are able to satisfy their taste buds and their health needs at the same time.
Customers also have a choice between using the technology or old-fashioned counter service. SmartMenu is meant to work in tandem with restaurant employees, so if a customer feels more comfortable talking to a â€œrealâ€ person, they can bypass the terminal and place their order with a cashier.
Personalized ordering = a healthier bottom line
Point of sale systems are designed to lower operating costs, but SmartMenu takes that design a step further.
â€œThe traditional POS system was not designed with improving the diner experience in mind,â€ explains Chhabra. â€œSmartMenu makes the ordering process interactive so that the diner doesnâ€™t feel ignored. It also makes the ordering process â€˜intelligentâ€™ by taking food item margins into consideration before making suggestions to the diner.â€
According to Usable Healthâ€™s data, when SmartMenu is implemented, on average, operators start instantly saving at least $500 a month due to decreased labor costs, and the average increase in check size is at least 15 percent.
Chan agrees, stating that SmartMenu has definitely decreased Tin Drumâ€™s operating costs by cutting down on labor. And since customers enter their own orders, there is less chance for cashier error â€” this improved accuracy makes for less waste.
SmartMenu also has increased revenues for Tin Drum. â€œIt raises the check average by making up-sell recommendations to customers on a consistent basis,â€ Chain explains. â€œIt also cuts down on customer wait time, so the orders are coming into the kitchen faster.â€
Additionally, the system manages the redemption process, saving the operator valuable time.
â€œWe donâ€™t have to accept coupons anymore. I donâ€™t have to count them manually and track them myself,â€ says Chan. â€œThe system does it for me.â€
SmartMenu as a marketing tool
SmartMenu logs a variety of data about customers including how long a person looks at a menu item and whether or not they order healthy options. This information comes in handy as a marketing tool for operators who want to target certain customers with specific offers.
â€œThe system lets operators configure deals and promotions themselves without paying an outside vendor,â€ explains Chhabra. â€œFor example, if you see that your restaurant is empty at certain hours, you can notify your customers to come take advantage of a special during that particular time and increase your business.â€
Chan adds that SmartMenu has given him the flexibility to launch whatever kind of promotion or loyalty program he desires.
â€œIn the past, restaurants had to go to the expense of printing gift or loyalty cards and setting up a program. With the SmartMenu system, I log on to my account and set up special offers for my customers whenever I like. Then, all I have to do is post the offer on Tin Drumâ€™s Facebook page to get the word out,â€ he says. â€œAnd all customers have to do to take advantage of the offer is log in when they come in to one of our restaurants.â€
â€œIn a way, I feel like Iâ€™m sort of a partner to [Usable Health] in developing SmartMenu. I can offer them opinions and share real-time experiences, ideas and suggestions,â€ Chan says. â€œI think this is just the beginning of this kind of technology. The personal choice terminal presents a lot of opportunity for both restaurants and customers.â€
It wasnâ€™t so long ago that a restaurantâ€™s success depended on good word of mouth and maybe â€“ fingers crossed â€“a favorable review in the local newspaper.
Today, itâ€™s all technology driven. Whether itâ€™s Twitter, Facebook, emails, blogging or apps, technology is the name of the game and restaurants may, in fact, be the industry segment that is on the cutting-edge of marketing via technology.
Almost $800 million was spent on mobile marketing last year, up more than 160 percent from 2009, according to the media research firm BIA/ Kelsey. More than 100 billion text messages are received or sent each year, and the use of mobile coupons should reach 300 million globally by 2014, according to Juniper Research.
It has not gone unnoticed by restaurant owners that more than 34 million Americas get their dining and restaurant information from a mobile device. Marketing gurus know itâ€™s the wave of the future. Many restaurants, particularly chains or multi-location stores, such as Dominoâ€™s Pizza and Starbucks, have their own apps. The W Atlanta Downtownâ€™s Bar has its own app but also is devoting more time to geo-centric apps such as Gowalia that allow for an experiential interaction. Other use third-party vendors such as OpenTable.com and Snapfinger.com.
Today, smart restaurant operators use these apps and other technology to send daily reports about specials, run loyalty contests, allow customers to order, pay by phone, figure out how many calories a dish has, make reservations, view menus, offer feedback and even show maps for directions. And itâ€™s a two-way street; restaurateurs use technology to manage previous and future reservations made by customers.
â€œIf you think about it, a personal device, whether itâ€™s an iPhone, an Android or other smartphones, is the one form of communication that people cling to 24/7,â€ says Pablo Henderson – W Atlanta Downtown’s Bar Happenings manager.Â â€œWeâ€™re communicating with our customers or potential customers in real time. In addition, our relationship with our customers is strengthened because we give them access to something that not everyone has. Itâ€™s like belonging to an exclusive club.â€
â€œSo many more customers are tech savvy,â€ says Sari Bernstein, marketing director for Here To Serve Restaurants in Atlanta. â€œThey receive newsletters via email, look for special offers via phone and mail. The money we used to spend on print advertising is going towards other ways to advertise these days with a better ROI.â€
Each of the Here To Serve Restaunts, including Coast, Strip, Noche, and Aja, has its own Facebook and Twitter page. â€œItâ€™s a great way for them to stay in front of their followers/friends with daily specials and events going on in the restaurants constantly,â€ she says. â€œTwitter is fantastic to get a message out real quick. If we decide at the last minute to run an offer in the restaurant, we donâ€™t worry about putting together all the artwork to relay the message. We can just easily tweet about it and watch how quickly that message can virally spread.â€
Wow Bao, a restaurant concept from Chicago-based Lettuce Entertain You Enterprises, offers a telling case study on how it connects with its customers in innovative ways. Wow Bao wanted to engage customers with a mobile offering while building brand awareness and loyalty (and increase revenues) through its social media efforts. To engage customers more fully, it partnered with Mocapay, a mobile consumer engagement platform, to offer its customers exclusive mobile offers and allow them to securely pay using their mobile phones.
Using Mocapayâ€™s platform, Wow Bao started mobile marketing and issued mobile VIP comp cards to its customers. In addition Wow Bao sent out mobile reminders to customers who hadnâ€™t redeemed their card or who still had a remaining balance.
In addition to the mobile comp card, Mocapayâ€™s embedded mobile technology allows Wow Bao to create, monitor and measure campaigns in real-time. In return, it also provides valuable information including redemption rates and purchasing behavior that gives Wow Bao a better sense of its customer, allowing a more targeted and personal relationship with every interaction.
For Wow Bao, the use of integrated social media resulted in increased loyalty and revenue. Its VIP comp card has been extremely successful with a 24 percent redemption rate at the point-of-sale and a nearly $10.00 average ticket.
To promote their breakfast menu, Wow Bao ran a mobile promotion one day for three hours. Customers who were part of the mobile program were sent a mobile message to receive a free breakfast bao between 7 a.m. to 10 a.m. the next morning. The promotion saw an eight percent redemption rate, which is three to four times the average of direct mail coupon redemption, according to the Direct Marketing Association.
â€œWe believe mobile is the next frontier for the restaurant industry and an amazing channel to directly connect with customers and build brand loyalty to increase store visits,â€ says Geoff Alexander, managing partner of Wow Bao. â€œWe are able to take our mobile marketing strategy to the next level by incorporating secure, mobile payments while also reaching our customers in a personalized manner.â€
â€œThe restaurant business is the perfect industry to showcase the benefits of an end-to-end mobile marketing solution. People do not always have cash, but usually have their mobile handsets with them at all times,â€ says Doug Dwyre, president, Mocapay. â€œThere is a shift in the marketplace towards the mobile channel as a viable way to establish customer loyalty and extend the value of a brand in real-time.â€
Other restaurants are reaping the rewards with similar technology creativity.
Doc Cheyâ€™s Noodle House, which has three Atlanta locations, has active Facebook and Twitter pages, but it also uses technology to increase its operations and entice customers with a prize. Customers who show that they checked in for their reservation using Facebook or Foursquare get a raffle ticket to win an IPad2.
The marketing is both direct and subtle. By enticing customers with the chance of an iPad2, it is giving them an incentive to go to its Facebook page, where they can become more engaged. Checking in ahead of time, just like at an airport, allows diners to be seated promptly, which increases customer satisfaction. The iPad2, at this point, is almost beside the point.
Technology guru Jonathan Kaplan, who sold his company to Cisco Systems for more than $500 million, is starting a California-based restaurant chain called The Melt. Relying on location-based mobile technology, The Melt is using technology in all aspects of the business including ordering. When ordering, customers will receive a QR code that could be scanned at any restaurant, allowing the customers to pay through their phone, skip the line and get their food faster.
So where is technology going these days?
Henderson admits that restaurants are facing technology clutter. â€œYour message now needs to be a lot louder,â€ he says. â€œBeing an early adopter of new technology was once enough to reach influencers, but now everybody is on Facebook, Youtube, using S.E.O., and the web has more clutter now. We are looking for new ways. Video, for instance, has become a big part of our story-telling process.â€
â€œItâ€™s really the beginning,â€ says Bernstein of Here to Serve. â€œPeople can use their phones for almost anything these days, and we are constantly looking at new technology to further our relationship with our customers and strengthen our brand.â€
Still, Henderson yearns for the good old days. â€œWord-of-mouth marketing is still the best and oldest form of marketing and one that relies on simple principles such as quality, service and a great story,â€ he says. â€œYes, automatic order takers may become a growing trend, but it wonâ€™t replace the role of a friendly cocktail waitress.â€
Ellen Weaver Hartman is president and CEO of Hartman Public Relations, based in Atlanta. Hartman has more than 30 years of experience in building strategic communications campaigns for some of the worldâ€™s most well-known brands. In addition to consumer and business to business communications, she has expertise in corporate communications, social responsibility, media relations and crisis management. To contact Ellen Hartman, email firstname.lastname@example.org
When Chris and Michele Sedgwick reconcepted their Roswell restaurant to Bistro VG, the kitchen was also updated with several new pieces of commercial cooking equipment to save time and energy.Â One piece added was the electric RATIONALSelfCooking Center. Owner Chris says, “The combi oven gives my chef additional creativity with our new menu while producing a high-quality, consistent product for our customers.” The oven is programmable, allowing Bistro VG’s chef to input his own recipes, which any chef can prepare with the simple push of a few buttons.
As Director of Construction and Development for Ted’s Montana Grill, Ed Bazor has a lot on his plate. But nothing is more important to him than his role as “Head of the Green Team.” Ted’s restaurants take their environmental stance very seriously, and it shows in their kitchen equipment. In their last two locations (Cumming, GA, and Bozeman, MT) they installed two gas-fired, tankless water heaters manufactured by Noritz. These two heaters are used in tandem to jointly ensure there is hot water on demand for frontand back-of-the-house operations. “We have not had them in operation a full year, so I can’t tell you the overall water or energy saving yet,” Bazor says, “but I will tell you that I have already seen huge benefit in the ability to eliminate 25 to 30 square feet of restaurant space because they hang on the wall. That is an upfront cost savings of $1,500 per year in real estate.” He also noticed his maintenance cost has been minimized because water flowed through the tanks instead of sitting in them. He states, “Neither restaurant has had one service call in the past 10 months. Even if we experience a moderate savings of energy, this equipment has saved me in real estate, installation expense, maintenance and space. I call that a significant savings overall.”
The world’s largest fast-food restaurant made a major decision to switch to electric fryers, and the results have been dramatic. The Varsity has been able to turn out their renowned food faster than ever, and its inside temperature has dropped significantly, especially in the kitchen area. “It has been fantastic,” says Gordon Muir, Varsity President and grandson of founder Frank Gordy Sr. “Our building is not just cooler, it’s more comfortable. I walked out into the lobby on a recent day when it was 100Âº outside, but it was cool at The Varsity. That’s a first.” Their kitchen temperature now stays below 80Âº. The Varsity’s 18 fryers work feverishly every day, cooking up the French fries and onion rings that helped make it famous. Not only are the electric fryers cooler, but they are also more efficient, easier to maintain and much easier to clean, according to Muir.
Middleby Marshall’s WOW! Gas Conveyor Oven was named the 2009 Product of the Year by the Gas Foodservice Equipment Network at the NAFEM show. This award is presented annually to a manufacturer that brings to market a natural gas appliance that highlights outstanding innovation and technology in foodservice equipment. The oven has an “energy eye” that starts the belt only when it senses product. When the belt does not have product, the energy eye puts the oven into a sleep mode to save energy. The oven cooks most products in three to four minutes. Georgia-based Stevi B’s Pizza restaurant’s Senior Vice President of Corporate Operations Seth Salzman says, “This oven runs 20% faster. For us, we can replenish our buffet faster, providing less waste because of our quicker reaction time.”
Niagara Conservation’s commercial, high-efficiency prerinse spray nozzle is certified by the Food Services Technology Center and endorsed by the Green Restaurant Association to reduce water usage by 80%. It has an insulated handle and is interchangeable with all brands.
Large to Small Expenditures Bring Big Return on Investment in the Kitchen
What's the catalyst for replacing old equipment? What finally pushes a chef over the edge and pries open the checkbook?
For Chef Patrick Gebrayel, it was the water dripping on his head in the kitchen at Dunwoody Country Club. "I finally got tired of the water coming down from the air conditioner registers on the ceiling," he says.
When Chef Gebrayel dug in to investigate, he found that what was making his head wet and his kitchen hot and humid in the summer and cold in the winter was also causing incredibly high energy usage through the facility.
"The biggest consumer of energy in the kitchen is the ventilation system," Chef Gebrayel says. He found that one of the 65-lb. doors leading from the kitchen to the banquet area stayed ajar while the hood was operating. The hood system was pulling so hard in its attempt to evacuate the hot air from the kitchen that it was literally sucking the air out of the entire building.
Chef Gebrayel's solution: to minimize the heat the kitchen put into the atmosphere during operation. The key was to find equipment that didn't throw off heat or that kept the heat it generated inside the equipment itself. Once he had installed this type of equipment, Chef Gebrayel was able to slow the kitchen hood speed down by almost 70%. As a result, the building chiller no longer had to work at 100% capacity just to cool the building; the kitchen hood was no longer pulling the air conditioning out of the building.
Even if slowing your kitchen hood doesn't seem to be an option, you can make small changes to make existing equipment more efficient and less expensive to operate. Chef Gebrayel recommends using a mechanical engineer to balance the hood, basically customizing its performance to the physical characteristics of the kitchen and restaurant.
"You don't want salad to blow off the plates every time the kitchen door opens," Gebrayel says. By spending $300 to $400 for hood balancing, the proper adjustment of cubic feet per minute per facility square foot can be optimized. Replacing the lights inside the hood with CFL bulbs can save in electricity costs. "They handle the vibration better," Chef Gebrayel explains. By replacing only 12 incandescent bulbs with CFLs, Dunwoody Country Club saves $1,800 to $2,000 a year.
Although his starting motivation was comfort, he found that energy savings and a better work environment go hand in hand. As part of the $450,000 renovation of the 4,000-square-foot kitchen at Dunwoody Country Club in 2008, Chef Gebrayel went in pursuit of equipment that would enhance both efficiency and comfort.
One of the newcomers to his kitchen was the Eloma combination. "It's a German manufacturer," he explains. "It doesn't throw heat into the atmosphere because it's so insulated and the door seal is very, very tight."
The manufacturer boasts that the oven can provide up to 46% energy savings versus a conventional oven and that Eloma ovens require no preheating. Although the Eloma requires a chemical cleaner, it uses very little - one 2-gallon jug of cleaner lasts roughly a year, even cleaning the oven based on daily use. The patented cleaning system can be started at any time, without the need to cool down the oven, saving staff time and equipment downtime.
Richard Gorowitz, Sales Manager at Atlanta Fixture, says, "Many of our customers today who are building restaurants or remodeling are looking for â€˜combi' ovens, using a combination of traditional convection cooking and steam cooking, simultaneously or independently. Another benefit of interest is that combi ovens save kitchen space and can combine functions of two or more pieces of kitchen equipment. This in turn can eliminate the amount of overall kitchen space needed." Gorowitz observes that purchases motivated by energy savings are split about evenly between ovens and refrigeration. For operators in the market for energy-efficient walk-ins, Gorowitz recommends Bally, Arctic and Master-Bilt.
The Dunwoody Country Club kitchen also welcomed a new fryer system. "Fryers are huge gobblers of energy," Chef Gebrayel explains.
When replacing his fryers, Chef Gebrayel turned to the "Ultrafryer," developed for the fried chicken industry. The self cleaning gas Ultrafryer uses a baffle system, meaning the gas burner is inside a tube.
The Ultrafryer baffles are high efficiency and its burner size is 20% of that of the normal fryer. It has twice the efficiency of a normal fryer because the heat stays inside the unit. Chef Gebrayel found that the 100-lb. Ultrafryer uses less energy than his normal 50-lb.-capacity fryers. Because the Ultrafryer burners don't fire all the time, "it doesn't burn up the oil," Chef Gebrayel says, adding that the shelf life on his fryer oil has almost doubled since making the switch to the Ultrafryer.
Quality construction can make a difference in all types of kitchen equipment. Chef Gebrayel's search for equipment that both saves money and contributes to kitchen comfort led him to a dishwasher made by Meiko.
Most manufacturers don't insulate their dishwashers at all. Unlike the thin-walled steel boxes most manufacturers market, the Meiko has 1Â½-inch-thick panels. "It takes less energy to heat up and saves energy throughout the cycle," says Chef Gebrayel.
The construction of the Meiko dishwasher provides "cool-tothe- touch" exteriors even while the dishwasher is running at full cycle. Meiko states that by reclaiming heat generated during the wash cycle and using that "waste" heat to prewarm the rinse cycle water, its dishwashers conserve energy during operation.
Chefs can find equipment like this Meiko quickly by spending time at trade shows like the North American Association of Food Equipment Manufacturers, where scores of equipment manufacturers have models available for inspection and handling.
To save even more electricity and make the kitchen more comfortable, Chef Gebrayel advised chefs to "kill the heat lamps!" He recommends using heated countertops instead. Not only do heated countertops save energy, but they also save counter space and clear the line of sight between the kitchen team and the front of- the-house team. As an alternative, Chef Gebrayel suggests using 110-watt retractable lights and providing the capability of using three or seven lights so that not all are on during off-peak demand for the heat lamps.
Savings can occur in more than just energy bills. Kitchens can cut their ongoing water bills as well by installing equipment that by design uses less water.
The Dunwoody Country Club kitchen renovation included installation of foot pedal sinks. As compared with sinks turnedon by hand levers, Chef Gebrayel's foot pedal sinks introduce a subtle difference in the hand-washing process. The user turns the water on by stepping on the foot press at the base of the sink. They wet their hands, step off the pedal and thereby turn off the water. At that point comes the soap and then the 20-second count starts. They step on the pedal again to turn the water back on and rinse.
The water doesn't run constantly throughout the process, and dirty hands never touch a sink lever. The results are better sanitation and reduced water consumption.
The operators who will survive in the current economic environment are those who take action to drive down their operating costs. A safer, more efficient kitchen saves in terms of employee morale and retention in addition to energy costs.
"Any time you turn something on, you're using a resource: gas, electricity, water, whatever," Chef Gebrayel says. Increased expenditure in the back of the house requires increased revenue generation in the front of the house. "I want to ease the pressure on the need to chase more and more revenue" just to break even he says. Finding and installing equipment that saves operating costs is a major step along the road to better margins.
Shed More Light on the Subject
Spending a little more to save a lot more over the long haul drives Chef Gebrayel's decision on how and where he invests in lighting. From a total cost of ownership standpoint, Chef Gebrayel found that replacing his 26 four-bay fixture T8 tubes with three T5 tubes saved money on his electric bill and produced a "really bright" kitchen.
The T5 tubes offer 10,000 hours of life (three-and-a-half to four years of continuous use) versus the T8 tubes' life of 4,000 to 6,000 hours. Chef Gebrayel boasts that his T5 bank consumes 25% less electricity than the T8s did. To maximize the effect of the brighter tubes, Chef Gebrayel installed fire-resistant plastic wall covering in bright white. The wall covering reflects even more light with benefits that go beyond energy savings. "A bright kitchen is a safe kitchen," Chef Gebrayel observes.
Low-Tech But High Savings
Sometimes, performance isn't about the latest technology. Chef Gebrayel relates his experience using flooring made of PVC from recycled milk jugs. The flooring is cost effective from the start because the material is permanently installed over the existing flooring. "You don't have to pull up ceramic tile or resurface," he says. The main attractions of the milk jug flooring material are its resistance to heat and the incredible footing it provides. Chef Gebrayel tested his new flooring by pouring hot oil on it and having his banquet manager walk through the kitchen in street shoes. "He just didn't fall down," Chef Gebrayel laughs. Even the workers compensation inspector was impressed to the point where Dunwoody Country Club received a reduction in workers' compensation expenses. Another side benefit is that the flooring has reduced breakage. Plus, "We no longer have floor mats," Chef Gebrayel says. "We clean the new surface periodically with enzymatic cleanser." It's cleaner, safer and easier than most conventional flooring systems. Who would've thought a milk jug could do so much.
Get the Facts Before You Spend
Chef Gebrayel warns that equipment marketing material is usually just that: marketing material. Brochures may be a fine place to start, but for comparative technical and performance data, Chef Gebrayel relies on other sources. Some of his favorites:
www.fishnick.com. This website has a wealth of technical information, from white papers to self-conducted site survey forms. It's sponsored by Fisher Nickel, an engineering consulting firm, in conjunction with Pacific Gas and Electric Company, but is fuel neutral and presents research conducted on all types and models of foodservice equipment.
North American Association of Food Equipment Manufacturers (NAFEM). Chef Gebrayel recommends NAFEM shows as great places for hands-on research. "You can educate yourself," he says, by finding equipment "that's better constructed for a lower price and better warranty than some big-name models." Here's the link to NAFEM's list of innovative equipment and products.
Gas South and Georgia Power. Chef Gebrayel sites these energy partners for bringing more than utilities to their corporate customers. "They will help you understand the energy usage of particular equipment," he says.
Successful restaurant operators understand the adage, “it’s not what you make, it’s what you keep that counts.” Controlling costs and maintaining sales volume are essential. Fortunately, there are software tools available to help manage cost, generate more sales and increase revenues.
Point of Sale (POS) technology applications help manage a restaurant’s two largest variable expenditures – food and labor. Alan Wright, Vice President of Hospitality Sales for Postec, a reseller of POS solutions, says the most important aspect of effectively using technology is “finding technology that fits with your operational rhythm.”
Inventory control can range from the macro to the micro. One of the micro applications is the ability to handle spot inventory at the end of a shift. For example, at shift end a report is generated giving a piece count of all your proteins. The manager on duty can quickly count the line box inventory to reconcile usage. By focusing on the most expensive items per shift, applying technology plays two important roles. First, it communicates to employees that inventory is closely guarded. Walt Davis, Southeast General Manager and Operating Partner for Retail Data Systems, a POS reseller, remarked, “when the economy goes down, theft goes up.” Managers are able to isolate the cause of waste much more closely in the short term. Monthly or weekly inventory reports cannot perform this function of immediate cost control. Secondly, the technology highlights any staff members who might need additional training.
POS technology has many exciting functions for managing labor costs. The POS system can act as a virtual comptroller. These applications monitor employee timesheets and send a text alert to the manager on duty when an employee is nearing overtime. It can also monitor the timesheets of minors and send text messages signaling mandated breaks or shifts exceeding Labor Board regulations. Greg Teague, Food and Beverage Director at Barnsley Gardens Resort, commented he would like to see the use of biometrics for timesheet applications (biometrics is the use of a thumb print to log on to a computer). Teague explained by using biometrics “you either clocked in or you didn’t.” It is a solid solution to the problem of employees padding payroll.
Customer service is central to maintaining revenue. Ultimately, customer satisfaction is only as good as their last experience. Consistently, excellent service is the hallmark of successful operations. QSR Automation’s kitchen software options are applications focusing on providing real-time information to keep back-of-the-house operations running smoothly, enabling the restaurant to provide a great dining experience. Their products work with various POS solutions to scan the incoming orders and direct items to the proper station. Its intelligent routing has the ability to hold back items that are faster cooking until the other, longer cooking items are underway. The “all day” feature keeps stations on track. If the kitchen is getting behind, an alert notifies management that the front ticket is over 25 minutes old. It tracks the time of reorders and missing items for an accurate picture of how the kitchen is running. It can also coordinate orders so all the food is the freshest and fastest possible. Niko Karatassos, Director of Operations for Buckhead Life Restaurant Group, has utilized Retail Data Systems to provide a solution to include QSR’s products working in conjunction with his POS system, Aloha. He states, “our kitchen video system is a real breakthrough. It allows our restaurants to have better control on the speed of our service and improve the consistency of our timing.” Additionally, the expediter monitor helps assess if a staff member, a station or even a menu item is consistently holding up table times. These forecasting aspects are designed to keep operators out of the “weeds,” thus increasing customer satisfaction.
New developments are on the horizon for restaurant technology. One example is employee pay cards. A pay card is a Visa card that is given to employees instead of a check. Wages are directly deposited into employee accounts. This eliminates time spent tracking uncashed checks, the disruption of employees coming in to pick up checks, check fraud and stolen checks. Employees are paid immediately without incurring any check cashing costs. The card and account belong to the employee, so they can access online banking for bill paying and the card is transferable from job to job.
Quick-service restaurants are also pioneering two new applications: kiosk ordering and contactless payment options. Installing kiosks saves labor and cuts down on staff errors. The Subway restaurant chain and Moe’s Southwest Grill are experimenting with kiosks, allowing customers to select their own order. Contactless payment is similar to a windshield sticker for toll roads. It is a form of radio frequency identification. Ty Hardison, Vice President of Business Development for Vantage Card Services, explains, “contactless payments are more secure than credit cards because the data cannot be extracted from the chip. Also, you are instantly aware if your chip is stolen because it is on your key ring, cell phone or other frequently used daily item.” As added security, it has a small limit because it is designed to replace small cash transactions.
The defining factor for what is right for your operation is finding a balance between applications that produce the greatest results for the lowest cost. “How does this application maneuver in the heat of battle” is a yardstick that Teague uses. Do an assessment of the operational obstacles and the tasks that require large chunks of time. By implementing one or two cutting-edge technology solutions, restaurateurs can increase productivity and profitability immediately.
For business owners, connecting to customers is a top priority. The ongoing evolution of internet technology makes it easier and cheaper for restaurateurs to reach their target customers. More and more owners and chefs are learning to put email marketing, the internet, customer databases, blogs and social media to work for them. The ultimate goal of marketing with technology is to maximize customer information while minimizing inconvenience and intrusion for loyal customers.
BUILDING A BASE
“Deciding how you will use customer information and building a foundation for collecting and storing that data is the first step to any database-driven marketing program,” explains Stacie Hanna, an independent marketing and public relations consultant. While Hanna was the Director of Marketing for Buckhead Life Restaurant Group (BLRG) launching an e-mail marketing program was one of her first major projects.
“First, we analyzed our objectives and how the program could help us accomplish them. One important goal was to build our customer database for regular e-mail communications and for other direct marketing programs. Then, we found a technology partner to help us build the back-end functionality,” says Hanna. “It’s important to consider a program like as a part of an overall marketing strategy – especially in the context of what else you are doing to boost your presence with customers online.”
Starting with a relatively small list of customer e-mail addresses collected in various ways, Buckhead Life Restaurant Group sent an e-mail offering a $25 Ultimate Card as incentive for joining the company’s new e-mail program. Signing up for the program and receiving the incentive required guests to input information about themselves into an online database. It also encouraged viral growth by allowing recipients to forward the invitation to friends and families. Within a week, more than 20,000 people had signed up for the e-mail program – an astounding response by any measure. “The key to the long-term success of the program was to use the customer information respectfully, with relevance,” says Hanna. The program launched in 2001 and still remains a powerful marketing resource for the restaurant group.
Buckhead Life Restaurant Group’s Ultimate Gift Card
Restaurant owners want to collect information not only from a la carte diners but also from patrons at private parties and special events. Customer comment cards are another option from directing individuals to your website. Whenever possible, secure a second piece of identity information, such as a birthday or anniversary. And clearly, in this internet age, obtaining a customer’s email address is key. Once this information is obtained, the restaurant employee can enter the details and preferences into the database. “Ask for contact information in whatever ways are appropriate for your business whether offering a card at the table, providing the ability to sign up online or when a guest calls for reservations,” adds Hanna. “It’s important to respect the customer’s privacy and priorities. Some will eagerly offer a few minutes to share information but others may be turned off. It’s best to offer multiple avenues to suit a variety of preferences.” Tell your customers that you appreciate their loyalty and would like to add them to your database. Ask customers to fill out “keep in touch” cards, so that you will be able to keep them informed.
More and more restaurants are using mutually beneficial online reservation companies such as Open Table (www.opentable.com). From the customer’s standpoint, Open Table is an easy way to check on current availability and reserve a table. And a booking automatically provides the restaurant with the customer’s name and email address.
IMPROVING THE SEARCH
Like it or not, the internet has become a vital part of doing business. In order to maximize opportunities via the web, restaurants must focus on designing and updating their web presence, ensuring search engine optimization. Chief Experience Officer of Sherpa Web Studios (www.sherpawebstudios.com) David Felfoldi explains, “there are a number of tricks to improve your web presence. Most restaurant websites are in a flash format, which allows for fancy visuals and multimedia. That may create an appealing atmosphere, but it is bad for search engines and your website might be overlooked during a search, in favor of another non-flash option. Also, whenever possible, the restaurant name should match the domain name. Finally, content is king. If your key phrase isn’t in the website content, then your site won’t be listed.”
MAKING IT WORK FOR YOU
Once customer information is gathered, it needs to be used in ways that are most beneficial to your restaurant. “Obtaining the customer’s name and email is important for general communication but when possible figure out how else you can serve them,” says Hanna. “Find out if a weekend a la carte customer is also the person who organizes the monthly luncheon or dinner events for his firm.”
The use of gift cards has increased dramatically in the last few years. Consider sending out promotional gift cards specifically to people who have employees of their own. Look for ways to tie promotions and events into opportunities for collecting information, such as offering gift cards that require activation, typically entering the user’s name and email, before being used. Ned Barker is the General Manager and Partner of My Panini, an Atlanta restaurant focused on lunchtime catering and office delivery in addition to serving their eat-in breakfast and lunch crowds. Barker explains “we promote our gift cards on the website. People then use the website to order a card, and activate them online. Once we have their email address, we send them a monthly newsletter with events and promos. Sometimes we add more credit to the gift cards, like on their birthday.”
BACK TO THE CUSTOMERS
The final, and most important stage of the marketing cycle is effectively communicating back to the customers. Once the database is established, customized emails are a good way to let customers know about any particular off-the-menu specials, events or other features.
Hanna also mentions the power of partners, “it is wise to form partnerships with other businesses who have a similar customer base. For example, a high-end restaurant and a high-end boutique located next to each other can cross-market by inviting customers to events, such as a shopping event at the boutique, catered by the restaurant. ” My Panini puts this into practice by working with Atlanta’s Eon Condominiums. For their Earth Day promotion they are handing out My Panini gift cards. Positive publicity and exposure increases for everyone involved.
Personal recognition also can have a very positive effect in the restaurant industry. Customers enjoy getting to know the staff and management, and vice versa. “People like to be recognized and they are more willing to part with their information if it ultimately gives them a better dining experience,” adds Hanna. Recognition often leads to a more personal touch from the restaurant’s staff, perhaps a better table and better service. However, it is important to strike a balance between what is appropriate and what quickly becomes too much. In this fast-paced information age, people can be a bit guarded with their personal information. And the type of restaurant plays a factor as well. Blanket marketing, especially at the fine dining level, can have a negative effect. Respectful subtlety is key.
Many restaurateurs hire professional mass email marketing firms such as Fishbowl Marketing (http://www.fishbowl.com/), Constant Contact (http://www.constantcontact.com/) or Atlanta’s Trend Influence, the company that initially helped Buckhead Life launch its program. Fishbowl’s Chief Marketing Officer Michael Murray explains “the restaurant business is the largest single industry that has very little real access to the consumers. Once they leave your restaurant, the connection is lost. Putting your restaurant name in front of your customer can lead to people in the seats.”
Fishbowl Marketing’s customized email.
Octane (www.octanecorp.com) is another company that helps people connect with their customers in an interactive setting. Social media is the latest trend in internet marketing and involves such sites as Facebook and MySpace. “The new potential is to connect with people daily and expose them to your promotions throughout the day, rather than just with a monthly email,” explains Brandon Sutton, president of Octane Interactive. By all accounts, internet-related marketing is fast becoming the most efficient way to connect to an increasing percentage of your customers.
Three top marketing and public relations professionals were asked: “What one piece of advice would you provide to a restaurant about marketing?” Here were their responses.
Melissa Libby of Melissa Libby and Associates
Be open to new opportunities.
Participate in community events.
Find a non-profit organization that you care passionately about and focus your giving there.
Mary Reynolds of The Reynolds Group
Great marketing always begins within the four walls of the restaurant.
Skilled and defined hiring practices, excellent training, education and mentoring of your team should be the number one “marketing” initiative for restaurant owners and chefs.
Dean Trevelino of Trevelino Keller Communications Group
Build a Marketing Calendar. Every restaurant needs to develop an annualized marketing calendar as early in Q1 as possible. Once identified, you can determine where to place your public relations emphasis, your online/social media initiatives, in-store creative and any traditional marketing vehicles such (direct mail, couponing). Also, your marketing calendar should identify your community based initiatives and sponsorships. That calendar should be broken down into several key areas:
When a shiny new industrial-strength stove, grill or cooler is wheeled into a kitchen, a feeling of exhilaration fills the air. But successful restaurateurs know that decisions about what and when to order new equipment are driven by business need, not to satisfy a desire for the latest playthings. The good news is that some of the most functional equipment can also be a heck of a lot of fun to work with.
Such is the case for Chef Dennis Davis at Virginia Highland’s Sala Sabor de Mexico restaurant when it comes to his new Tuff Grill. “We were looking for something more rustic that produces higher heat,” Davis says of the wood-fire grill. And yet, “it is incredibly simplistic and flexible. You load it up and you can control the temperature on each side of the unit.”
The Tuff Grill was a logical choice for Davis and his crew because not only does it flavor their Mexican cuisine with the wood-smoked flavor they sought, it fit into Sala’s rustic decor. “With the Tuff Grill, you can taste the smoke in the chicken breasts and especially in all of our fish dishes,” he says, adding that there is a positive noticeable difference in the way people are responding to the food since he has been using the Tuff Grill.
While the Tuff Grill imparts smoky flavor into the cuisine, Davis also enjoys its low maintenance. “It’s always the biggest issue with a grill, but with this unit, it’s really not that bad,” he says. “The beauty of the grill is that it has no moveable parts. It’s archaic in that sense, but that makes it easier to clean than a gas grill because there are fewer nooks and crannies for ash buildup.”
Before he purchased his “wood-fired wonder,” Davis worked with a standard gas Imperial Grill. While he was happy with it and got the mileage he wanted out of that piece of equipment, Davis says that the grill wore out quickly due to the demands of his kitchen. After four years, Davis and the staff decided it was time for an equipment change. “Gas grills can pop, warp or simply break down,” he says. “After realizing that we had it in our budget, we went with the Tuff Grill. We hope to avoid the wear and tear on this wood-burning grill. I think it is the way to go.”
Davis is also fond of Sala’s Imperial Salamander. The broiler gives tomatoes and veggies a smoky taste, and at three and a half feet wide by two and half feet tall, it’s a space saver. The unit is above Davis’ stove, which gives him plenty of room to work on his stovetop.
The Tuff Grill and Imperial Salamander are user-friendly according to Davis. “The Tuff Grill is easy. It might take a little effort to get going, but once it’s on, you get great results,” he says. “The Salamander is great. You just turn it on and go.”
“Simplicity” is the credo that Executive Chef Kevin Rathbun follows when purchasing kitchen equipment for his three restaurants: Inman Park’s Rathbun’s, Krog Bar and Kevin Rathbun Steak. “I’m frugal when it comes to equipment,” Rathbun says. “I don’t need a signature kitchen that’s on display. I just need firepower.”
As the owner of three successful restaurants, one might think that Rathbun is sitting pretty with only the finest equipment. Nothing could be further from the truth. Rathbun operates on a shoestring budget and is a fan of used equipment. For example, Rathbun paid about $400 for a range when he started out and still depends on that range to this day, affectionately referring to it as his “go to piece.”
When it comes to broilers, Rathbun prefers the Southbend over the Imperial Salamander. “Most steakhouses use them,” Rathbun says. “I can see why. The Southbend balloons the meat, seals the juices and cooks quite fast.”
For years, Chef Kevin has raved about his Big Green Egg at home, so he purchased large versions of “the world’s best smoker” for his kitchens. “The Egg provides so much creativity,” he says. “It’s great for pork shoulders and of course tomatoes and onions. It retains so much moisture.”
When it came to ventilation, Rathbun didn’t skimp when he purchased a Captiveaire system. “It’s a little more money, but it’s worth it for safety reasons,” he says. A clean kitchen is a safe kitchen and, “sooner or later, you have to get back there.” That is why his equipment is on wheels and has quick release options.
Since Rathbun wears several caps in addition to his chef’s hat, he and his partners are on the frontline of kitchen equipment purchases. “A lot of the time we go directly to the company and do the talking and research,” he says. Among the equipment in Rathbun’s kitchens are Blodgett Convection ovens and Hobart stationary and handheld mixers.
At the Intercontinental Buckhead, Director of Food and Beverage Bixente Pery manages Au Pied de Cochon restaurant, the hotel bar, room service and banquet facilities. To juggle multiple demands without compromising his goals for high quality, he chose Rational ovens, which have been a big hit with Pery and the culinary staff. “You can steam, you can use it as a regular oven and even regenerate food which means it goes from the oven to the plate, no covers or trays are involved,” he says. “When you can regenerate food, you can really serve restaurant-style with our banquets.”
Bixente Pery has been dealing with Rational ovens for the past five years and vows that he will not go back to what he calls the “old way.” The “old way” for Pery was firing up the oven, putting on plates and using covers. “Sauces would burn or food would come out dry,” Pery recalls. “Quality was not top.” Pery says Rational ovens avoid those pitfalls and in the end, save time and labor.
Upgrading or purchasing new kitchen equipment can be a daunting task. Just ask Chef Olivier DeBusschere of downtown Atlanta’s Nikolai’s Roof. Since his kitchen sits atop the Hilton, he is limited in his equipment choice. “We cannot have a wood-fired grill because of where we are at,” DeBusschere says. “We have the Lange line of equipment from the stove to the vent system. The newest part of it is my stovetop.” While he appreciates having a new stovetop, DeBusschere’s is more excited about his new Pacojet ice cream maker, which he uses to make sorbets and soft parfaits.
With so many equipment options and new technology available, some chefs still prefer keeping things simple. Rathbun admits he may one day upgrade his equipment line; he says that he would like to have a complete Jade product line because “those pieces look dynamite for French-style kitchens.” And he points out that warranties can be an advantage to purchasing new equipment by offering “peace of mind.” But he doesn’t feel that warranties should be the deciding factor and is also concerned that newer equipment might use more gas and be more apt to break down: “I look at some of these nice new pieces, but then I think, “How am I going to clean it? How am I going to get the flour out of that thing?’ I believe in fewer bones. More bones mean more can break down.” Sala’s Davis agrees. “The more technology, the more that can go wrong,” he says. “All I want out of my equipment is for it to work.”
You go out for dinner and leave with your identity stolen. It sounds crazy, but it happens everyday and it could very easily happen in your restaurant, too.
With new POS applications and equipment for the hospitality industry, however, the likelihood of credit card theft happening in your restaurant can be greatly reduced.
Restaurants Popular for Skimming
According to Federal Trade Commission statistics, credit card fraud is now the most common form of identity theft. Much of that fraud is due to a practice called skimming, which is when a restaurant employee swipes the credit card through a device that records the account information.
It’s a practice that has been around for more than a decade, but as technology has led to smaller skimming devices, frequency has jumped dramatically in the past three years. Credit agency TransUnion estimates that 70 percent of all skimming takes place in the restaurant environment.
Handhelds Help Reduce Liability Risk
So what can restaurants do? If even just one credit card number is stolen or compromised, the restaurant is liable for any losses.
Bruce Alterman is one restaurant owner concerned about protecting his patron’s credit card numbers. He decided to implement a handheld transaction device that processes credit cards at the table in full view of the customer to reduce the potential for credit card fraud. “There were two major components that were enticing. No. 1 is the security. The other is the hope that we’ll turn tables. It’s always a bottleneck when we’re busy,” says Alterman, who owns The Brickery in Sandy Springs.
The restaurant, which seats 135 and averages 2,500 patrons a week, has had the system in place since April 2007. Previously, The Brickery used two slide terminals, one at the bar and one on the floor. Now, there’s one system hardwired at the bar and four handheld terminals.
By using a handheld device at the table, it not only speeds up the entire payment process and increases table turns, it also frees up server time. Most importantly, it gives an added layer of protection for patrons wary of identity and credit card theft.
Such handheld equipment has been around for years in Europe, but the trend is just now jumping the pond. Bruce is only one of four restaurant owners in Georgia using the handheld device.
The process mimics what is usually done away from the table, but he hopes to phase in the use of debit cards and the ability for patrons to slide their own cards through the machine. The equipment also has the capability to process tip percentages, so patrons simply push a button to add the desired tip to the total bill.
Upgrade or Buy New?
Many restaurants, whether large national chains or local family-owned restaurants, are still using POS systems that retain credit card data from its magnetic stripe, and it’s only gotten easier for thieves to swipe that data without the restaurant or patron discovering it until it’s too late.
POS manufacturers are well aware of the liability issues, and many have come out with software upgrades and new products that help restaurant owners avoid skimming all together.
To determine if you need to upgrade your POS system or purchase a compatible component, it’s important to ask a few questions about your existing POS system. Does it retain information in the unit or send it to a remote server? How long is the information stored? Is the data encrypted?
According to Visa and MasterCard, restaurants are at high risk of being compromised if they use payment applications that store prohibited data or have security weaknesses. If a POS system stores full magnetic stripe data, CVV2 or PIN data following transaction authorization, it is in violation of the Payment Card Industry Data Security Standard (PCI DSS).
Handheld devices allow for scanning credit cards at the table, and many can be incorporated into a restaurant without the need to upgrade existing software. There are several handheld products already on the market, including Vantage Card System’s On the Spot, used by The Brickery. The system uses special encryption to protect financial data transacted over a restaurant’s Wi-Fi network, and allows restaurant operators to take advantage of lower-cost PIN debit payment.
“It’s all encrypted data, and there’s nothing actually stored in the terminal,” says Ty Hardison of Vantage Card Services, Inc. “Like a lot of POS systems out there, restaurants may unknowingly be storing card holder data. In this situation, there is no data stored at The Brickery. Nobody can hack in and log into a server that’s been unprotected in some way. Even if they could, there’s no data here.”
On the Spot has two main platforms: the Verifone Vx670, which allows at-the-table, curb or point of delivery payment for full-service and fine dining restaurants, and the QX720, which is designed for use at drive-thru windows.
“You don’t have to go in and try to do an integration with a POS, which can be very expensive and more complex,” Hardison says. “We’re finding that a lot of restaurants that may have security issues with their POS and would like to upgrade their system but would have a huge bill are going the route that [The Brickery] is.”
ASI’s Restaurant Manager POS system also prevents identify theft through skimming by allowing the complete payment transaction to occur in front of restaurant customers.
Restaurant Manager features Mobile Payment Processing, which protects restaurants from other forms of credit card fraud by encrypting credit card data according to standards set by the Cardholder Information Security Program (CISP).
“In this age of heightened security concerns, it is critical that POS applications are fully PCI compliant,” says Alex Malison, CEO of ASI. “CISP validation together with the Mobile Payment Processing offers even more safeguards against credit card fraud to both restaurants and diners alike.”
icros has upgraded its software to encrypt data in an effort to help protect restaurants from credit card fraud.
“They don’t store full track data at the restaurant site,” says David Shaw of Postec, which distributes Micros. “It goes through a server and software called Transaction Vault, so it takes all the liability away.”
The Maitre’D wireless POS solution allows staff to spend more time on the floor helping customers and selling menu items, and functions the same as a regular POS. It allows tableside credit card transactions and provides access to specials, ingredients and items no longer on the menu, saving time and providing instant answers to customer inquires.
Ultimately, handheld transaction equipment not only protects both the restaurant and its patrons from credit card fraud, it also helps turnaround times and keeps customer frustration levels at a minimum.
“You know, you do everything right, you market to the customer, you get them in here, you feed them great food, and then they’re ready for the check and looking around for a server,” The Brickery’s Altman says. “The fact that the customer is now involved and seeing the process, and you’re doing what you were doing in the back in front of himï¿½the level of perceived customer service is so much better.”
For more information, visit the following web sites:
Skimming at a Glance
The art of skimming has been around for a decade, but with new technology and smaller devices, the number of incidents has risen dramatically over the past few years. Skim artists typically target gold or platinum cards because of their higher credit limit, which means it may take longer to discover what’s happened. While the whole process can take less than a day, the victim is none the wiser since his own credit card is safely stored in his wallet. Here’s how it works:
A customer uses a payment card to pay. The wait staff walks the credit card to the transaction station.
After leaving the table, the employee secretly swipes the credit card through a small, concealed handheld device to copy and store the account data. Many of these devices are so small they fit in the palm of the hand.
The stolen card information is later downloaded to a computer, and the wait staff is paid in cash for their part in the theft.
The details of the victim’s credit card are encoded on a counterfeit card or re-encoded on a lost or stolen card and passed on to others, who may sell the card or use it for their own benefit.
How to Avoid Skimming Before it Occurs
Skimming is on the rise, and restaurants are one of the most common locations for it to occur. Help protect your restaurant from liability by being proactive before identity theft occurs:
Train your staff on what to look for in the workplace. Educate them on the various ways skimming can occur.
Encourage your staff to report any signs of skimming at the restaurant. If they see anyone using a device that is not part of day-to-day activities or if anyone offers them money to record account information, they should let the restaurant owner and merchant processing center or company security know immediately.
Screen restaurant applicants before you hire them. Skimming artists typically recruit others to pose as wait staff to collect credit card data or lure employees into their schemes by paying them for stolen data. The more you know about your new hires the better, especially those responsible for processing card transactions.
The restaurant industry is taking tech-savvy to the table with new website features that make online visits more appetizing. Now, the perks go far past flashy formats and simple navigation to provide web surfers with a plateful of unique features without even stepping foot in a restaurant.
Jay Wilson, principal and founder of Nine Rodessa, Inc., a strategic creative and design firm in Atlanta, creates websites for several local restaurants including Canoe and 101 Concepts. His number one piece of advice to restaurants when designing a site is that it must be easily updatable. “Restaurants have to plan for weekly or monthly updates,” says Wilson. “If not, the website becomes irrelevant as guests visit the site and discover that it never changes. I highly recommend that restaurants invest in a content management service such as Edit Desk. It empowers them to manage their website.”
Fifth Group Restaurants, an Atlanta restaurant company with six dining concepts and a catering arm, has recently undergone a major website update and now offers food for every mood at www.fifthgroup.com. With the new site that offers a unique and user-friendly look at the company’s passion for pleasing patrons, Fifth Group proves that a distinctive dining experience is available depending on the mood of each individual guest.
“We’ve designed our website to coincide with our tagline, Be Yourself,’ and to show guests the depth of our restaurant portfolio,” says Fifth Group Restaurants Partner Robby Kukler.
Showing off the company’s flair for both food and functionality, the site now contains an innovative moving carousel that adapts to the user. Visitors can click on any of the rotating concept tiles, which can be slowed down or sped up at the click of a mouse, to be taken directly to any of the individual restaurant web pages from authentic Italian at La Tavola Trattoria to regional Mexican at Sala-Sabor de Mexico. This moving carousel also informs visitors about upcoming promotions and special events.
“Catering to each individual guest and making them aware of all the concepts in our restaurant group is our goal,” Kukler adds. “We strive to read the needs of our patrons, and our website portrays this about us.”
Wilson agrees that restaurants need to focus on this brand consistency when creating Web pages. “Ultimately, I think it’s critical for restaurants to communicate the atmosphere and experience to be had in order to qualify a site because more and more people are using the Web to judge,” he suggests.
Fifth Group’s new portal offers a one-stop-shop for patrons to not only experience the company’s entire portfolio of dining options, but also the opportunity to purchase gift cards and enroll in the Frequent Guest Rewards Program, which gives guests a convincing excuse to return.
Also keeping guests coming back for more with its online Cafe Loyalty Card feature is Metrotainment Cafes, an Atlanta company with 10 concepts and another venture on the way. Metrotainment began this loyalty program two years ago, and Owner Jeff Landau has seen a 10 percent increase in business since it began.
Though most customers hear about the loyalty program in the restaurants, they sign up for the card on the website. In order to enjoy the rewards and associated with the loyalty cards, guests must register their card online at www.metrocafes.com. Without registering, customers cannot accrue reward dollars, check their balance or receive a reissued card complete with points if the card is lost. This program is designed to draw website visitors, and those that were only aware of one Metrotainment concept now see the other nine the company has to offer.
“When guests visit our website, I feel as though we’ve established more of brand awareness, says Landau. “They realize how many concepts our group has.”
“We’re hearing more and more from restaurants wanting to develop a gift card program and a loyalty program,” says Wilson. “Another increasingly beneficial way for restaurants to maximize their site is by building an online community around the restaurant to connect with clientele,” he adds.
Shane’s Rib Shack, a Raving Brands concept with 34 locations in Georgia, connects with online customers on a more personal level. As a family franchise, Shane’s stresses the importance of “meeting the folks” and makes guests feel closer to the barbeque joint’s concept by offering an endearing family history behind the company at www.shanesribshack.com. Family is central to Founder Shane Thompson and he carries this sentiment throughout his concept, even on the Website.
“Shane realizes life is far more complicated today than when he grew up around the dinner table or when family members gathered for cookouts. He wants guests to feel that sense of nostalgia with every exposure to Shane’s,” says Bret Eldridge, Vice President and Brand Leader for Shane’s Rib Shack.
Shane’s has also recently implemented an online ordering system that is streamlined with existing ordering systems and is just as user-friendly.
“It’s important to us that the Shane’s website has a user-friendly interface because we want our consumer experience to be just as pleasant online as it is in-store,” says Eldridge.
Engaging visitors in an online format is becoming increasingly important for restaurants as guests rely more heavily on the Internet to research their dining options. Restaurateurs are now responsible for feeding mouths and fingertips.
McCall Mastroianni works for Melissa Libby & Associates, a PR firm with several restaurants among its clients. She can be reached at (404) 816-3068.