Bar POS Systems and Payments

The shape of the problem

Most payment systems assume a sale is a single, finished event. Someone buys a thing, the amount is known, the card is read, it is over. A bar breaks that assumption at almost every point. The card arrives at the start of the night and the amount is not known until the end of it. One tab becomes three people arguing over who had what. A round gets ordered while the last round is still being poured. And every so often someone leaves without closing out at all.

So the question is not really which bar POS system has the longest feature list. It is whether the system handles the five or six things a bar does constantly, does them in one or two taps, and does them without a manager walking over. Everything below is organized around the night itself rather than around features.

Opening a tab: what pre-authorization actually does

When a bartender opens a tab on a card, the system runs an authorization first. That is not a charge. It asks the cardholder's bank to confirm the card is good and to set aside an amount against the available balance, and the real amount is captured later when the tab is closed. Some systems authorize a nominal amount, some authorize a set figure the bar chooses, and some can raise the authorization as the tab grows.

Three things follow from that, and they are the ones that cause arguments at the bar rather than in the back office.

• The hold shows on the customer statement. A pre-authorization reduces the balance available on the card and often appears in a banking app as a pending item. On a debit card with a tight balance, a large hold is felt immediately, and the customer will tell you about it.
• Holds do not always clear instantly. Once a tab is closed for the real amount, the original hold should drop off, but how quickly that happens is up to the cardholder's bank, not to you. People genuinely do see both for a day or two. Being able to explain that plainly saves a lot of bad feeling.
• The authorized amount is not a license to charge anything. Capturing far above what was authorized is where trouble starts, which is the whole of the walked-tab problem further down this page.

Cards behind the bar, and the better alternative

Holding a stack of physical cards behind the bar is the traditional way of keeping tabs honest, and it is the thing most worth designing out. Cards get handed back to the wrong person, get left overnight, get claimed as lost when they were not, and put staff in the middle of a dispute they have no way to settle. It is a security and a liability problem before it is a payments problem.

The alternative modern systems offer is keeping the tab against a token rather than the card itself. The card is read once at the start, the system stores a reference that can be used to close the tab, and the plastic goes straight back in the customer's pocket. Nobody is holding anything, nothing can be handed to the wrong person, and the sensitive data never sits behind your bar. If a system you are looking at cannot do that, it is a fair question why.

Tips on a tab

Tipping in a bar is mechanically messier than in a restaurant, because the person who opened the tab is often not the person closing it, and because the tip may be added on a printed slip, tapped on a screen, or dropped in a jar in cash.

• On screen at close. The customer taps a tip before the card is authorized for the final amount, so the total is final at that moment. This is the cleanest version: nothing to adjust afterwards, nothing to reconcile.
• Written on the slip. The card is authorized for the pre-tip amount and the higher total is captured at batch. Card networks allow this for tipped businesses, within a tolerance, and going past the tolerance can cause a transaction to be treated differently or disputed. Ask your processor what their tolerance is and what happens when a transaction exceeds it.
• Who the tip belongs to. Bars pool and tip out more than restaurants do, and across barbacks and door staff as well as bartenders. What matters in the POS is that tips are attributed to whoever actually served, not to whoever happened to close the tab at the end of the shift. Ask how a tab transferred between bartenders is reported.
• Cash tips. They still need recording for payroll and reporting even though they never touch the card system. A POS that lets staff declare cash tips at the end of a shift makes that a routine rather than a reconstruction.

Walked tabs

Somebody opens a tab and leaves without closing it. Every bar deals with this, and how you handle it is worth deciding in advance rather than at one in the morning.

If the tab was opened on a card, you generally can close it out for what was actually consumed. The part to be careful about is the tip. Adding a standard gratuity to a walked tab, closing it at a round number, or capturing an amount well above what was authorized are all ways to turn a small loss into a chargeback you will lose, because the cardholder never agreed to that amount and there is no signed slip to show.

• Have a written policy. Decide what you close a walked tab at, whether any gratuity is added, and who is allowed to do it. Put it on the menu or on a sign at the bar if you add anything, so it is disclosed rather than discovered.
• Keep the itemized record. The strongest answer to a dispute is an itemized record showing what was served, when, and on which terminal. That is worth more than a signature nobody can read.
• Close it the same night. Tabs left open across days age the authorization, and an authorization that has expired is no longer a guarantee of anything.

Age-restricted sales at the point of sale

Checking ID is a legal obligation, not a POS feature, and no system removes the responsibility from the person serving. What a system can do is make the check consistent and leave a record.

• Prompts on restricted items. The POS can require an age check before an alcohol item rings up, so a new bartender on their third shift gets the same prompt as the owner.
• ID scanning. Most US driver licenses carry a barcode on the back holding the date of birth and the expiry date. A scanner reads it, works out the age and flags an expired license, which catches the two mistakes people make when they are busy: mental arithmetic under pressure, and not noticing an out-of-date card.
• What scanning does not do. It does not tell you the person in front of you is the person on the license, and it does not catch a good fake on its own. It is a second check on top of looking properly, not a replacement for it.
• Rules vary by state. What you are allowed to scan, what you may keep, and for how long, are set by state law and they differ. Check your own state rather than assuming, particularly before switching on anything that stores scan data.

Speed on a busy night

On a Friday at eleven, the difference between a good and a bad system is counted in taps. A system that needs four screens to ring a round of the same beer is costing you sales every hour that it does not look like it is costing you anything.

1. Repeat a round in one action. Reordering the same round is the single most common thing that happens at a bar, and it should be one button, not a re-entry of four items.
2. Put the busy items where the thumb already is. A screen laid out for your actual menu beats an alphabetical list, and it should be something you can rearrange yourself without calling anyone.
3. Enough terminals. One terminal shared by three bartenders becomes the queue, however fast the terminal is. Count stations rather than staff.
4. Quick cash keys. Exact change, five, ten, twenty. Small thing, hundreds of times a night.
5. Tap first. Contactless is the fastest way to take a payment and the one customers reach for. Make sure the reader is mounted where the customer can reach it without leaning over the bar.

Test your building, not the showroom. Wifi in a room with four hundred people in it behaves differently from wifi in an empty room at ten in the morning. If you use handhelds on the floor or on a patio, walk to the far corner and take a real payment there before you commit, and ask what the system does when it drops off the network mid-tab.

Splitting, transferring and merging tabs

Bar tabs move around more than restaurant checks do. A group arrives in twos, merges, argues, and splits again on the way out. What you want from a system is that all of that can be done by the bartender, at the bar, without a manager code.

• Split by item and by amount. Splitting evenly is the easy case. The real one is three people who want to pay for what they drank while the fourth covers the food, and that has to be doable by dragging items rather than doing sums.
• Transfer between bartenders. At shift change a tab has to move to whoever is now behind that end of the bar, with the tip attribution following the work rather than the clock.
• Move a tab to a table. People start at the bar and sit down. If a bar tab cannot become a table check, somebody ends up closing one and opening another, which costs you a second authorization and confuses the reporting.
• Merge two tabs. The same group, opened twice. Easy to do, easy to undo, no manager needed.

Comps, voids and spills

Bars give away more drinks than most businesses give away anything: a spilled pint, a round on the house, a staff drink, a mistake poured. None of that is unusual, and all of it needs to be recorded as itself rather than disappearing off the system, or your stock will never reconcile and you will never know what it costs you.

• Void and refund are not the same. A void cancels a transaction before the batch settles, so nothing ever reaches the cardholder. A refund returns money after settlement, which means the original sale already cost you a processing fee and the refund is another movement on top. Voiding before close of night is cheaper and cleaner, so it is worth knowing which one staff are actually doing.
• Separate reason codes. Spill, comp, staff drink and training pour are four different things. Lumping them into one button hides the one that is growing.
• Manager approval where it matters. Not on everything, or it becomes a queue. On the ones that move money or stock in a way you want to see.
• Report on it by person and by shift. Not to be suspicious of staff. Because the pattern tells you where training is missing, and occasionally it tells you something else.

Cash is still part of this

Cash is a smaller share of takings than it was, and in a bar it has not gone away. A tip jar, a door charge, a regular who always pays with a twenty. What matters is that the system handles both properly rather than treating cash as an afterthought.

• A drawer per bartender if you can. Shared drawers make a shortfall nobody’s fault, which is the worst possible outcome for everyone including the honest staff.
• Blind counts at close. Counting without seeing what the system expects is the only count that tells you anything.
• Cash discounting and surcharging are not the same thing. They are different programs with different rules, the rules differ by state and by card brand, and both involve disclosure requirements at the point of sale. If anyone pitches you one as free processing, that is your cue to ask exactly which program they mean and what you would have to post at the bar.

What to ask before you sign

1. How does the system open a tab, what does it authorize, and can that be raised as the tab grows?
2. Can a tab be held against a stored token rather than a physical card behind the bar?
3. What is the tip tolerance on an adjusted transaction, and what happens if a transaction exceeds it?
4. How are tips attributed when a tab is transferred between bartenders?
5. How many taps is a repeat round, and can I lay the screen out myself?
6. What happens to an open tab when the network drops, and what are the limits of offline mode?
7. Does ID scanning work on every device I will be using, and what does it store?
8. What am I actually paying, with every line on the statement explained, including the ones that are not processing at all?

That last one is the one people skip, and it is where the money is. We go through it line by line on a call before recommending anything.