The Problem with “Pure Cloud” POS Systems

When cloud POS first arrived on the scene, it was mostly web browser-based with no offline safety net. As the market provided feedback, many cloud POS providers evolved into hybrid POS, where redundant offline capabilities are required.

Given market progress, we’d be shocked if any serious retailer/restaurant bothered to invest in a POS that wasn’t hybrid… but then again, we don’t need to tell you that decision-making with brick and mortar merchants is horrendous. That’s why when restaurant chains elect to use POS systems without offline redundancy we’re appalled; there is a BIG difference between a cloud POS system with “offline” modes, and a hybrid system, and this article will make that clear.

To help us compare the two, we’re going to take the operating guide of a cloud POS (Toast) without hybrid redundancy.

The first issue is not being able to clock-in or clock-out of separate devices. For example, if you have a restaurant with three terminals, all your employees will need to remember where they clocked in and continue using that terminal. Toast recommends,

Each employee should choose a single terminal to place and update orders.

Unfortunately, you’re not just limited to clock-ins and clock-out: tickets cannot be shared to other devices either. In most full service and quick service restaurants (QSR) tickets are passed among registers, so this is a major inconvenience. With a hybrid POS the data is shared in a peer-to-peer (P2P) environment, eliminating clock-in problems and ticket roulette. Further, we’d like to say that good hybrid systems will know where you clocked-in, so if the internet does go down when you’re clocked-in you won’t need to re-clock-in.

The second issue, related to the first, is the problem with sharing orders with the kitchen, which often uses a KDS (kitchen display system). This happens because orders are first sent to the cloud, then pushed down to the kitchen. Toast’s recommendation is to,

Make sure to have a back-up printer if you use Kitchen Display Screens.

This increases costs of ownership because yet another piece of hardware is required. Can you imagine being a high volume fast food joint where a power or internet blip means your kitchen doesn’t know what’s being ordered? There’s no way a QSR or fast casual operator should live with that uncertainty.

The third issue relates to Toast’s credit card settlement, which could just be specific to Toast and not reflective of other non-hybrid cloud POS systems. Toast calls this process “Auto-Capturing Payments” and is explained as a process that occurs nightly:

Credit card payments authorized throughout the day are captured into a batch and sent to the processor. After this happens, payments cannot be updated with tips or otherwise adjusted in any way.

Toast puts the onus on the merchant to contact Toast if a merchant’s internet issues have not been resolved by end of day. Imagine a Friday night internet outage with a merchant that closes at 2 AM Saturday morning; think the merchant will remember to call at 11:59 PM when they’re slammed? If you don’t call Toast, and internet is reestablished, Toast will go ahead and settle your payments. If you hadn’t had any time to make tip adjustments, too bad: once settled, you cannot append the batch.

The fourth and largest issue as far as we’re concerned is a resyncing liability. If an employee, frustrated with the inability to connect to the internet, tries to reinstall the app, or resync any data with the cloud, all of the day’s transaction data is lost- including any card data. That seems like a massive concern considering most employees would be inclined to uninstall and reinstall an app in a frantic attempt to reestablish connectivity. This is trained behavior from consumer apps. Hybrid POS systems don’t drop data and can operate offline for months sometimes.

A fifth issue, which we find quizzical, is the assumption that the merchant will be able to troubleshoot the networks themselves. Toast asks that merchants turn off the networks they’re not using:

If your system normally runs through Ethernet, it’s important that your Wifi settings are OFF. Alternatively, if you are connected via Wifi, make sure that your Ethernet settings are OFF.

Do merchants need to do this for every terminal? Will they remember to turn it back on? Chances are the merchant will not be able to do this.

Of course a cloud POS could argue that a merchant should never be without internet, that a failover modem that uses cellular networks like 4G should be mandated. This is not a terrible position, but it feels like an excuse to avoid building a more robust POS system. Have you ever found you don’t have cell phone service? 4G isn’t always reliable, so why put your customer in that position?

The real question to ask is how many merchants will invest hundreds of thousands, if not millions of dollars into a new POS system without understanding what they’re buying? That if their internet goes down their POS system becomes an expensive paperweight? Shouldn’t a merchant’s decision makers be required to do some amount of homework before spending that kind of money? Aren’t shareholders entitled to that seemingly negligible level of fiduciary responsibility?

It’s merchant ignorance that defines cloud POS as a system with “no offline capabilities” and ruins it for all the other cloud POS providers with hybrid functionality. Generally, it’s merchant ignorance like this that ruins all innovation in brick and mortar, not just that for POS.

Don’t just blame the supplier: blame the customer too.