Loyalty programs have become a cornerstone for retailers in Australia. With the release of the "For Love or Money" latest 2025 edition, you can access the latest insights on loyalty initiatives. This article distils the key findings and practical, actionable advice. You can get a copy here of the report; you will need to pay for it, but it comes with a free executive summary of the report, which you can download for free. If you are interested in loyalty programs for your shop, it's well worth a read.

"A loyalty program, also known as a rewards program, is a marketing strategy designed to encourage customers to make repeat purchases by offering them discounts, rewards, or other incentives. Businesses implement these programs to foster customer retention, boost customer engagement, and ultimately increase profitability." 

Why Loyalty Programs Matter for Australian Retailers

Well-designed loyalty programs help you increase your business. According to this loyalty research, the number of Australians participating in loyalty programs is rising.

During COVID, you can see that it dropped, but now it is growing steadily.

Key Insights from this report

Customer loyalty id not just discounts.

• Consumers appreciate programs that are easy to join, understand, and use.
• Personalisation fosters engagement.
• Value is essential, but it doesn't only mean money.

Designing a Loyalty Program That Works

Our POS systems, tailored for Australian SMBs, include free and built-in loyalty modules, making it easier than ever for you to implement and manage these programs without any upfront investment.

A successful loyalty program for your shop does not require a large budget or complex technology.

You need to concentrate on a few points of what the report calls the nine currencies. Very few retailers can offer all of them, so you need to focus on two or three that your business can deliver.

The Nine "Currencies"

They are what people want. Don't worry if you cannot provide some of these; few can offer all of them:

Money

Not surprisingly, many are looking at discounts, points, etc.

Memory

Experiences that stick in your customers' minds: I have a customer whose wife is an art teacher, so he runs a free art course. This experience sticks in his customers' minds.

Time

Making things quicker or easier, e.g., offering digital receipts. Something that saves them time.

Me (Personalisation)

People want to feel recognised as individuals, so they may request that you send a birthday card or offer or suggest products based on past purchases.

Flexibility (Choice)

Customers want to choose their reward. Instead of offering 100 points = $1, offer a scale, say 500 points = $7.50, or a free birthday card at 400 points.

Us (Community)

Make an offer for a local school, organisation, business, etc. members to join your loyalty program. People like to be given the option to donate their rewards.

Joy

Offer an unexpected delight, a free treat, or say thanks with a handwritten note.

Access

I think it's very difficult to implement exclusive perks, such as early access to sales or new products for loyalty members.

Status

People want to feel special or recognised.

Next Steps for Your Shop

1. Your loyalty program doesn't need a big budget or advanced tech to work. Here's how to keep it simple and effective: Our POS system has free software for running a loyalty program.
2. Pick two or three "currencies" to focus on.** Money, memory, and joy are great starting points.
3. Keep it simple.
4. Promote your program. There is no point in having something that people do not know about.
5. I will make some key performance indicators (KPIs) to measure effectiveness. The ones I suggest are repeat purchase rate, average transaction value, program participation rates, etc.
6. Get customer feedback as it provides valuable insights for your loyalty program.

If you'd like help setting up a loyalty program, contact us for a chat.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

The Spend & Get promotion gives customers who buy in your shop a discount on future purchases. It's like a traditional discount voucher system, which I have discussed here. After doing a net search, I found several major Australian retailers use it. It includes Mitre 10, Supercheap Auto, Kogan, and The Good Guys. However, any retailer can use it; the big plus is that it requires no upfront marketing costs. Today, Spend & Get promotions are becoming a cornerstone of effective retail loyalty programs, and they are worth studying even if you do not use them.

Why Traditional Discount Vouchers Fall Short

Many small businesses still rely on basic discount vouchers, but these systems have significant drawbacks:

- Customers exploit voucher systems; a favourite method is to split purchases. For example, a shopper intending to buy two toys buys one and receives a voucher. That discount is used to buy a second toy. This undermines your intent to encourage future visits and instantly reduces your margins.

- Physical vouchers can be easily misused. Staff or opportunistic customers may collect discarded receipts or share vouchers, leading to unearned discounts. In some cases, this can result in substantial hidden costs that are difficult to track.

- Traditional vouchers are anonymous. You do not know who redeemed the voucher or what they bought. It limits your ability to make data-driven decisions and effectively target your marketing.

- Without customer data, you can't market to your customers and offer blanket discounts to unknown shoppers. I have discussed here how to set up a free marketing program.

How Spend & Get Promotions Solve These Problems

Spend & Get promotions are designed to address this problem.

- Requiring a short wait before redeeming credits prevents customers from splitting purchases to game you. It encourages return visits and protects your margins from being eroded.

-Because credits are deposited directly into individual loyalty accounts, only the customer who made the qualifying purchase can access the reward. There's no physical voucher to steal or share, reducing misuse and ensuring your incentives go to the right people.

- Every Spend & Get transaction is linked to a loyalty profile. You'll know who is buying what and when they shop. This data is invaluable for targeted marketing, which our loyalty marketing program can use. With access to customer contact details and purchase history, you can deliver an email campaign free of charge. I like sending a newsletter to those who haven't recently visited. You can get them back while they are still fresh in your mind.

The Business Benefits of Spend & Get Promotions

Improved Customer Retention

Loyalty programs are proven to increase customer retention. Research suggests loyal customers spend significantly more than new ones when incentivised to make repeat visits and purchase larger basket sizes. Traditional voucher systems are more expensive than loyalty-based promotions. It is vital, as a loyalty program typically cannot afford to operate at a cost over 1% of annual turnover. There is not a lot of margin there to play around with.

How to Implement Spend & Get

It is relatively straightforward to set up and manage Spend & Get promotions. There are two main approaches:

Automatic Implementation

The system automatically credits loyalty points with discounts when customers meet the spending threshold. This method is efficient and reduces the risk of human error. Customers receive notifications via email or SMS, and staff don't need to apply discounts manually.

Manual Activation

Sometimes, you may want staff to trigger the promotion by adding a specific code at checkout. This approach can be helpful for complex promotions.

For most people, we recommend automatic implementation. It has the advantage of simplicity.

Maximising Value: Best Practices for Small Retailers

Set Realistic Thresholds

Analyse your average transaction value and set thresholds to encourage higher spending without discouraging participation. For example, if your average sale is $20, a $50 threshold is too high; a $25–$30 threshold would be more effective. What you want is something a customer would think is a plausible limit.

Communicate Clearly

Ensure staff can explain the program benefits and redemption process. Use signage and digital communications to highlight how the promotion works and why joining your loyalty program is worthwhile.

Integrate Seamlessly

Test the POS system thoroughly before launch so you understand how it works.

Measuring Success and Continuous Improvement

As always, I suggest you track several key metrics (KPI). Without information, you do not know what is going on. I recommend such KPIs as:

• Loyalty program sign-ups
• Average transaction value
• Frequency of customer visits
• Your promotion costs are calculated as a percentage of revenue. As I said earlier, 1% should be your budget for loyalty marketing. Some marketers say 2%, but only with supplier support.

Want to learn more.

Contact our POS team today for more information on integrating Spend & Get promotions with your POS system.

FAQ

Q: How can I set up a Spend & Get?

A: There are two main approaches.

The first is automatic implementation, when the POS system automatically credits customers' loyalty accounts when they meet the spending threshold. Manual Activation: Staff manually apply for the promotion at checkout, which is valid for more complex offers.

Q: What are the best practices for running a Spend & Get promotion?

A: Set Realistic Thresholds: To maximise participation, base your spend thresholds on your average transaction value. Clear Communication: Train staff and use signage to explain the program's benefits. Seamless Integration: Test your POS system thoroughly to ensure smooth operation.

Q: How do I measure the success of a Spend & Get promotion?

A: Track these key performance indicators (KPIs):

Number of new loyalty program sign-ups

Average transaction value

Frequency of customer visits

Promotion discounts as a percentage of revenue

Q: What are the problems of traditional voucher systems?

A: Easy to Game:

Customers can split purchases to use multiple vouchers.

Prone to misuse as physical vouchers can be stolen or shared.

Lack of Data: Traditional vouchers are anonymous, limiting your ability to target marketing.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

The Australian government will introduce a 15% additional tax on superannuation assets exceeding $3 million from 1 July 2025. With Labor's parliamentary majority and crossbench support, this legislation will likely pass. Most of us will not be affected now but the plan clearly is to expand it over time as the plan lacks inflation indexation.

If you hold your shop in your superannuation funds in a typical neighbourhood strip shop has values typically ranging from $500,000 to $1.5 million, a $1 million shop today would be about $3 million within 15 years, a $1.5 million shop would get to $3 million in 8 years based on current market projections. Most of us plan to be around for more then that.

I would suggest that many of you consult our financial advisor particularly as the tax is on the assets  as once the fund goes over $3 million gets over $3 million you will face a particular challenge, as this tax is on assets. So whether you have the cash or not you need to pay the tax. Now unlike say shares, where you can always sell a few shares to pay the tax, a property cannot be easily divided, yet you will need the cash to pay it.

The other issue is that the more complex accounting burdens on the superannuation will certainly create more accounting costs.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Product line expansion is a key growth strategy in retail. You have customers. What can you offer that will sell more to them? You want to attract new customers with new products. Successful implementation requires some intelligence, as we need to introduce new products thoughtfully to boost revenue.

Clothing

One new department that is doing well with my clients is clothing. It can be a profitable venture, with strong margins and consistent demand. Many find it offers an attractive opportunity to diversify their product range. Our studies show that clothing outperforms gift items in terms of profitability. Clothing is now experiencing significant growth.

Let us use it as an example of how to introduce a new line into your shop.

Clothing isn't simply about stocking random garments. It requires planning, so let's dive in.

Understanding Your Local Market

Defining Your Target Market

Successful clothing retail now depends on clearly understanding who you're selling to. Focus on specific customer segments that align with your local demographics.

Consider these key factors when defining your target market:

Age

Different age groups have distinct style preferences and shopping behaviours.

Gender

Will you focus on menswear, womenswear, or both?

Income level

This determines price sensitivity and expectations for quality

Lifestyle

Active, casual, professional, or fashion-forward

I find that making up a fictional persona helps. Let's say you identify three types of people and make them as detailed as possible to help you visualise them and identify their needs.

For instance,

• Professional women aged 45 who value quality items and comfortable, modern-style clothes. She is willing to pay for durability and versatility. Call her Debby.
• A retired 65-year-old male. Call him George. For him, clothes do not need to be fancy; they just need to be cheap.
• A 21-year-old woman named Lisa works in the local shopping centre and spends a lot on clothes.

Now ask yourself what George, Debby or Lisa would buy in your shop.

When conducting your competitive analysis, focus on:

Product ranges

What types of clothing are they buying? What you are looking for are gaps in your area.

Price points

What price points do they have in your area?

Customer demographics

Who shops there? Observe age groups, style preferences, and spending patterns.

Store layout and displays

How do they present their merchandise? What seems to attract attention?

You are trying to look for weaknesses and gaps that you can fill. The gaps do not have to be big.

For example, winter is coming up. There seems not to be much catering to cheap winter hats. You can get very cheap polyester beanies from Kmart, but not much is available if people want something made of warm wool. Maybe look into your new line for beanies, baker boy caps, bucket hats, etc..

Identifying Multiple Market Segments

Consider targeting several complementary market segments rather than focusing on a single customer type. This approach provides more stability and growth potential for your business.

Aim to identify at least three potential market ideas:

For each potential market, assess:

• Size of the potential market
• The commitment you need.
• Competition
• Alignment with your business values and capabilities

After identifying these segments, you can evaluate which offer the best opportunities and gradually narrow your focus to the most promising markets.

Finding Your Niche

Creating a Specialised Offering

The key to standing out in retail is specialisation. Rather than competing directly with department stores or chain retailers on everyday items, focus on developing a unique niche that addresses specific customer needs. A well-defined niche helps customers understand what makes your clothing selection special and gives them a reason to choose your store over alternatives.

Seasonal Strategy Example: Winter Headwear

Your example of winter headwear illustrates an innovative seasonal approach. As you noted, winter brings predictable demand for warm accessories, creating a natural opportunity to introduce a focused clothing category.

When implementing this strategy:

Start with variety

Offer different styles (beanies, newsboy caps, berets) to determine what resonates with your customers.

Quality

Select a price point; do not be afraid to be expensive. In my experience, the top and bottom are very hard to get into.

Consider timing

It is probably too late for seasonal items like winter wear, as winter is almost here.

Suppliers

Finding reliable suppliers is crucial for retail success. Clothing platforms like AliExpress can be good starting points for sourcing products. I suspect many majors, like Kmart, use them a lot. You can, too.

Supplier reliability

Check reviews, what do people say about their communication responsiveness

Product quality

I think you will do better with mid-range quality

Marketing support

It would help if they had some display materials

Delivery timelines

Very important, when can you get the goods? You must ensure sufficient lead time.

Minimum order quantities

This is often a problem when getting excellent prices. You need enormous quantities, but you don't initially want these. Make them an offer, say for 10. They can only say no. We have all heard that before in business, so I doubt it will hurt that NO.

Effective Merchandising Strategies

Creating Compelling Displays

How you display significantly impacts sales. Effective merchandising creates visual interest and helps customers envision how items look when worn.

Dedicating Proper Space

When introducing the products to your retail business, allocate sufficient space to create an impact. A few scattered items won't generate excitement.

Leveraging Social Media

If you sell products like clothing, you should be on social media. You need

• High-quality product photography that the supplier can give you.
• Give yourself a local presence, with pictures of you wearing these clothes.
• Share new arrivals as they come in
• Highlight real customers wearing your products

Ongoing Management

The sad fact is that most experiments fail. No matter how much you plan, you will have failure. You do not want to end up tying up capital in slow-moving stock.

Implement these inventory best practices:

• Use your point-of-sale report to update your sales figures
• Which items sell quickly at full price?
• What feedback do shoppers provide?
• Why are items brought back? What sort of problems do you have?
• Ruthless culling of products that do not work.

Use this information to refine your product selection, adjust pricing strategies, and optimise your merchandising approach.

Conclusion

With careful planning and consistent execution, you can drive sales into your retail business.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

We all need effective email security strategies to combat spam emails that waste our time. This guide provides best practices for email security tailored for retailers.

How Spammers Find Your Business Email

Public Listings You Can’t Avoid

Your email address often appears in mandatory business records, such as:

• ASIC company registrations (required for all Australian businesses)
• Domain registration details (when you buy a website domain)
• Industry directories (e.g., local chamber of commerce listings)

Your email addresses are often exposed through normal online activities. Spammers deploy automated programs called harvesters that scan websites, forums, and directories overnight. They can collect thousands of Australian business email addresses in a night's work.

Guessing Game Tactics

Guessing is often not hard, as most email addresses follow a typical pattern.

For example, if you are John Smith and work for "Your Business Pty Ltd," spammers will automatically try.

[email protected]

[email protected]

[email protected]

[email protected]

If your name is not known, what the spammer wants is that they assume that a small business uses [email protected] and use their list of the 40 common names (male and female) and send 40 emails. In Australia, approximately 13.6% of male newborns received one of the top 20 most popular names in 2023. Females are a bit higher with 14.36%, so they have a 10% chance of getting it. On a harvester program, this is not hard to do. 

POS Systems

Your POS System receipts can be used too,

Buying lists

The primary reason for these massive data breaches is the thriving market for stolen email addresses. According to the Australian Cyber Security Centre, over 4 million Australian email credentials were compromised in breaches during 2024 alone. Spammers purchase these lists; I saw one on offer on the dark web marketplace containing additional information like names, companies, and email addresses for $US 100 per 100,000 addresses.

Simple ideas for retailers

Now that you understand how many spammers target your business emails, let's explore practical countermeasures you can implement immediately without disrupting your daily operations. These are not solutions, but they do help.

Switch to role-based Email Addresses.

Replace personal emails like john@ with functional addresses:
[email protected] (customer enquiries)
[email protected] (technical issues)

These sorts of addresses do not seem to interest spammers a lot.

A bonus is that it maintains continuity if staff leave or change roles.

Basic Email Masking

These do work, but it's a judgment decision, as often, they can confuse legitimate people with whom you want to give your email address with spammers.

Write addresses not as john@@yourbusiness.com.au but as john[at]yourbusiness[dot]com.au

On social media, use the Message buttons instead of posting emails.

Feature a phone number as the primary contact method.

Turn On the Free Spam Filters

All major email platforms include built-in protections, and these are excellent email security gateways.  

I tested Gmail with some of the latest email phishing attacks and was very pleased with how many it picked up. One particularly pleased me as it was a scam email from Microsoft, which I was sure it would not pick up, but it did.

Pro tip

Mark suspicious emails as spam instead of deleting them, as this trains your provider’s filters to improve accuracy.

Go into the spam folder and check those emails that are not spam.

Use Disposable Addresses

This method works but can cause problems for people who want your email address.

You create a temporary email for specific needs and then delete it. For example, for Mother's Day you could have set up an email address [email protected]

Next Steps for Immediate Protection

Use free tools like HaveIBeenPwned to see if your email is compromised. I have spoken about it here.

Conclusion

While spam will not disappear anytime soon, implementing the abovementioned strategies can dramatically reduce your exposure and protect your retail business from harmful attacks.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

A recent confrontation at a Melbourne Coles supermarket here shows a problem. The Coles staff were suspicious and demanded proof of purchase for the customer's items. The customer said she had brought it into Aldi, did not have a receipt, and refused. There was nothing the Coles staff could do. This highlights critical compliance challenges facing Australian retailers.

Legal Framework

Mandatory Requirements

Under Australian Consumer Law (ACL), your business must:

• Automatically issue receipts** for transactions ≥$75 (excluding GST)
• Provide receipts within 7 days** for purchases under $75 upon request

However, the client does not need to take or keep them, and most customers do not.

Here is the problem: You cannot legally demand receipts from competitors to validate the goods in the customer's possession.

Conclusion

Your point of sale system can tell you whether you recently sold these items. Our labels will show if the goods came from your shop, and cameras might show what the customers had before entering the shop. However, all this might not be enough.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Google has just launched "What's Happening" for its Google Business Profiles. You can display daily specials alongside your business listing if you are a restaurant or bar. This offers a valuable opportunity to increase your visibility at the critical time when customers are making dining decisions.

It is said that it will soon be rolled out to other businesses.

What is the "What's Happening" Feature

When potential customers search for dining options in your area, they'll immediately see your current promotion before any other business information. This placement ensures that your most compelling offers receive maximum visibility when it is critically needed.

Currently, you have nothing to lose, as it's free.

Implementation Options for Your Business

I was thinking about how you can use the "What's Happening" feature.

Try it out by publishing this content directly through your Google Business Profile dashboard.

If you like it, connect your existing Facebook or Instagram profiles to sync relevant content to your Google Business Profile automatically. If it works, this would eliminate the duplicate work while maximising the exposure of your existing content across platforms.

If you are our client, we are happy to assist you as we always like to maximise our clients' benefits.

Optimisation Strategies

I am sure that Google's algorithm will favour current, engaging content that they are looking for. So to extract maximum value from the "What's Happening" feature, you would need to:

- Focus on a straightforward offer rather than overwhelming potential customers with multiple options.

- Use action-oriented language, e.g. "Book today" or "Try our new menu", as it's designed to drive immediate response, so you need something that is for an immediate response.

- Clearly say when promotions begin and end to create urgency and manage customer expectations

- Keep it up to date; customers will only be disappointed and lose trust if they come for an old offer that is no longer available.

- Note each promotion to see which ones work for you to refine your approach over time

Integration with Point of Sale Systems

If it takes off, we will undoubtedly integrate. I can already see some automation, as the POS system knows

- Your excess inventory can be used to reduce wastage.

- Performance analytics can be utilised.

- Automated scheduling is no problem for your POS System.

How to do it

To implement the "What's Happening" feature for your hospitality business:

Access Your Business Profile

Sign in to your verified Google Business Profile.

Review Profile Verification

Please ensure your business details are current and accurate

Select Implementation Method

For starters, till you get going, I suggest picking manual posts

Create Your First Update

Highlight your most compelling current offer or upcoming event—something simple like the deluxe premade range of sandwiches, 50% off now to 4:00 p.m. today. Remember, unsold sandwiches are often binned if not sold by 4:00 p.m. Also, I must say that excessively offering such discounts rarely does a business much good in the long term.

Review

See how it goes, I suggest experimenting a lot. Its very hard in advance to know what motivates your customers.

Please tell me

I would love to know how it goes for you.

One problem I noticed is that it only supports one location. If your business has multiple locations, you may have problems. One solution might be to make one business profile for each location.

Conclusion

It's free and does represent a significant opportunity for Australian businesses to enhance their online visibility and connect with customers.

I would say, "What do you have to lose?"

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Running a successful retail business in Australia hinges on making informed decisions based on reliable supplier information. Here is a recent case when a supplier provided incorrect, possibly misleading information to one of our customers.

A garden supply retailer received promotional materials from a supplier urging them to stock up for "National Garden Week" with a note that it was fast approaching in early June. They were drawn to the note as they remembered last year, they did well with National Garden Week. However, they decided to check what sold well in early June while making an order. Upon checking, they discovered nothing unusual in their POS System reports. That was strange, as they remembered doing well at National Garden Week. So they decided to check online. They soon discovered National Gardening Week is in the third week of October, not June. Further investigation found that the supplier had inadvertently used American dates for the holiday.

They were lucky; this wrong communication could have led to premature stock purchases if they had ordered. Besides the financial problems, they could easily have suffered humiliation by displaying the incorrect date, which could have eroded customer trust and damaged their reputation.

This example is far from unique. Many supplier communications do not account for local market conditions or seasonal variations.

The lesson is clear: unchecked supplier information can lead to mistakes.

Trust but verify.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Take a look and see what you think?

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

I got many questions about my article here

Here are the four questions I received, which generated considerable interest across the Australian retail sector. I explain why I believe this planned policy change will significantly impact how businesses price their products and process payments. I also explain why I think those who disagreed with me are wrong.

1) The Legislative Pathway for Surcharge Abolition

I agree that Labor's commitment to abolishing debit card surcharges will probably require legislation. Now, it was and is Labor policy to abolish these surcharges. Recent polls show strong public dissatisfaction with surcharges on card payments. When I spoke to a senior official in the NAB, I was told 71% of Australians polled. I cannot find any evidence to back this up, but it sounds reasonable to me. This creates significant political pressure for action.

Despite those who argue that the current law blocks a surcharge abolition, I believe a Legislative Pathway for surcharge abolition exists. Labor to put it through will need support from the Greens or the LNP to pass such an abolition through parliament. The LNP and the Greens are now re-evaluating their positions overall as they both lost their leaders in the last election. But before the election, the LNP had stated that surcharges were symptoms of deeper problems in the payment system. Meanwhile, the Greens advocated removing surcharges, with the banks absorbing these costs.

Despite differing policies, there is a cross-party recognition that the current surcharge system needs to be examined and reformed.

2) Potential Impact on Retail Pricing Models

Implementing a surcharge ban, which looks likely, will necessitate adjustments to retail pricing strategies. Most retailers will try to incorporate the cost of debit card processing into their base pricing structure. For example, if your debit card processing cost averages 1%, a product priced at $5.95 would need to be adjusted to approximately $6.01 to maintain margins. There is a marketing problem with making a price of $6.01.

Then there is a bigger problem: this price adjustment creates an unfair challenge for smaller retailers as they typically face higher processing fees than their larger competitors. A supermarket with a 0.5% debit fee will probably keep the magazine at $5.95, while a newsagent with a 1.2% fee would need to charge $6.02 for the same item. This pricing differential highlights the inequitable nature of card processing fee structures across the retail sector today. This assumes the magazine companies are okay with this. The most likely scenario here is that the newsagent loses 1.2%. I doubt any of the three political parties will care about this newsagent.

So, I suggest retailers consider reintroducing cash discounts, equivalent to card processing costs, for customers paying with cash. Our POS System can do that.

3) Understanding Current Surcharge Regulations

There continues to be significant confusion regarding what costs can legally be included in card surcharges under existing regulations. The current interpretation of legislation permits businesses to include only direct costs associated with EFTPOS processing in their surcharges.

This means costs such as:

) EFTPOS terminal rental fees

) Transaction fees charged by payment processors

) Receipt paper for EFTPOS terminals

However, indirect costs cannot be incorporated into surcharges, including:

) Your accounting services related to payment reconciliation, even if done by an outside contractor.

) Internet connectivity costs for payment processing

) Electricity costs for running terminals

The banks will analyse your surcharge rate for you. Our study has revealed that many financial institutions do not comprehensively outline all eligible direct costs when advising merchants on appropriate surcharge levels. This results in businesses underrecovering their actual costs. Check here for details.

4) POS Software Surcharge Considerations

Some retailers use Point-of-Sale (POS) systems that automatically apply surcharges to cover electronic payment costs. We think these surcharges only comply with current regulations if the additional charge is displayed on shelf pricing before the customer reaches the checkout. Few businesses that use such POS systems do that; if your company employs such a system, it is advisable to confirm with your POS provider that your surcharging practices align with current regulatory requirements. Non-compliant surcharging may expose your business to regulatory action from the Australian Competition and Consumer Commission (ACCC). If you do ask them, please let me know their responses.

Conclusion and Next Steps

The proposed abolition of debit card surcharges represents a significant shift in Australia's retail payment landscape. While the exact timeline and implementation details await further political development, Labor is talking of early 2026

Suppose you have specific questions about how these changes might affect your retail operation or require assistance configuring your POS system to accommodate the new regulations. In that case, our team can provide tailored guidance and support. We remain committed to helping Australian retailers adapt to this evolving payment landscape.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Today, AI-driven POS Systems are revolutionising the information flow to retailers. AI reporting offers advanced analytics and predictive insights compared to traditional POS system reporting. I love its ability to allow users to ask questions and research topics, enabling us to make more informed business decisions. Train your model with your information, and ask questions. If you do not understand something, you can ask for more information. It is brilliant. If anyone wants to attend a webinar on these functions, let me know.

While AI-powered analytics often deliver revolutionary insights, most users usually do not need them. Many retailers find that traditional POS reporting provides the information required for day-to-day business operations, which remains today's cornerstone of retail reporting.

The Trust Advantage of POS System Reporting

In business, POS systems have been refined over the decades, offering reporting functionality that captures actual transactions. Almost all errors have been worked out of the system, so retailers can confidently use this information to make business decisions.

The challenge with AI reporting systems lies in "hallucinations". These occur when the AI often generates plausible but factually incorrect information. Recent evaluations of advanced AI systems indicate hallucination rates of about 1.1% on simple tasks, and I have seen figures of 30-50% in complex tasks reported. What happens is that the AI, when asking your question, goes off track. It then moves along this track into nonsense. What is dangerous is that sometimes it appears plausible and can be hard to spot. It creates significant risks for retailers who might make substantial decisions based on inaccurate analysis. While doing a study, a pet shop retailer in Brisbane considered increasing its stock levels in dog toys based on an AI report trend. That trend did not exist. If they had followed it, they could have brought much excess inventory. Luckily, they picked it up. By contrast, when a POS system shows a 24-month history of a product sold, that figure represents a real figure.

Operational Speed and Accessibility

Timing becomes critical in retail environments where rapid decision-making directly affects sales outcomes. Our modern POS systems generate comprehensive reports within seconds for free. The system does not require an internet connection or an AI subscription.

Industry-Specific Relevance for Australian Retail

POS systems are designed specifically for retail operations. It incorporates Australian terminology and KPIs that align directly with Australian business practices. Standard POS reports include daily sales summaries, staff performance metrics, inventory turnover rates, and GST calculations, all of which conform to Australian requirements. An AI report, while powerful, often struggles with Australian-specific requirements. We have noticed that an AI analysis usually uses international accounting terminology that requires translation. When doing the report, we must do Google searches to determine what is being said. I have discussed this problem in depth here when we ran 100s of AI reports. 

Security and Compliance for Australian Businesses

We have a big problem here, as much of the information in your POS System is restricted. For example, in Australia, we have strict privacy laws. Your POS systems incorporate security features specifically designed for this retail environment. These security measures have evolved over many years and are focused on retail-specific security requirements. Using AI for business reporting typically involves transmitting all your business data to third-party cloud services, raising concerns regarding data storage locations, retention policies, and potential use of proprietary business information. More dangerous is that all your information can be accessed by people in your organisation. Its hard to restrict parts of your payroll information so some of your staff might get what others earn. 

Transparency in Reporting Methodology

When a POS system identifies top-selling products, the calculation methods are transparent and verifiable. You can do the calculation manually to figure out how it works. If the results appear unusual, you can easily check the report. This transparency builds confidence in the process.

AI-generated reports generally suffer from what we call "the black box problem." We get a result, but no one knows the reasoning behind its recommendations, making it difficult for anyone to understand the findings.

Consistent Reporting Over Time

POS reporting remains consistent over time. Once a retailer masters it, they know how to use it, what it gives them, and how to make meaningful comparisons over time.

AI systems face challenges with what we call "model drift." When you do the same thing, use the same prompts, you probably get different responses, each run of a report gives a different answer.Each run is an experiment. 

When to Use Each Reporting Type

The clear advantages of traditional POS reporting for day-to-day retail operations, POS reporting excels in managing daily operations, staff performance evaluation, inventory control, cash flow monitoring, tax compliance, and comparative performance analysis. These functions form the operational backbone of Australian retail businesses.

I like to think of AI reporting as going to see an expert. They often have great knowledge in a particular area of your business and can help you examine the situation. They can tell you about subtle patterns in the industry and what is likely to happen, giving you insights, but you need to be very careful about accepting their advice without further thought. What we love is its ability to allow you to ask questions and explore.

Implementation Recommendations for Australian Retailers

For Australian retailers considering their reporting, you need a robust POS System that provides the fundamental business metrics.

When evaluating AI tools, take their advice with a grain of salt. We expect that in ten years, AI reporting will take over, but not yet. We are all experimenting with it. Its a lot of fun but think of it as science experiment.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Although much of the election still needs to be sorted out, it is clear that now we need to consider the government's announced plan to ban debit card surcharges. It is set to take effect from January 2026. It is being presented as a measure to provide relief for consumers and a "fairer go". However, many of you do not see it this way. Many of you would feel that this will increase your costs, as we face it, it's the retailer that will now have to pay these debt charges. So, let's delve into what this change means, to consider the broader implications for your business.

We must speak here: Australia’s card payment system has, for a considerable time, been structured unfairly. Large national retailers, the supermarket giants and major department store chains, wield significant commercial power. This scale allows them to negotiate highly preferential, often rock-bottom, merchant service fee rates with the banks and international card schemes. Their sheer volume of transactions gives them leverage that an independent retailer cannot match. Currently, it's less of an issue than with cash; both independent and large organisations pay no fees to the bank on money. What makes it particularly bad is that in these government promises, there's no explicit, corresponding guarantee or mechanism announced to ensure that the bank charges the debt fees will be fair. This isn't anecdotal; this issue is acknowledged in reports from government regulatory bodies and industry analyses. On average, an SME business can expect to pay merchant fees for debit card transactions, sometimes two to three times more than what a major retailer pays for the same value and type of transaction.

To put this into perspective, a small business may see debit card fees ranging from 0.5% to 1.5%, and sometimes even more, particularly if newer or less typical card schemes are involved. Conversely, a large retailer might secure rates as low as a few cents flat per transaction, or a tiny fraction of a percent. For a $100 sale processed via a debit card, this disparity means a supermarket might incur a fee of just 20 or 30 cents. However, your local boutique, café, or specialty store could be charged $1.00, $1.50, or even more for that identical transaction. This difference isn't trivial.

Examining the Impact

Suppose the government proceeds with banning debit card surcharges without simultaneously legislating a significant and enforceable reduction in the underlying merchant fees that small businesses pay. In that case, the financial implications are pretty straightforward. The cost of accepting debit cards, which you can recover, will have to be absorbed directly by your business. For many independent retailers, this isn't a minor adjustment; it could translate into thousands, or even tens of thousands, of dollars in lost revenue annually, straight from your bottom line.

Let's consider the probable consequences under such a scenario. Prices are often set by suppliers in their RRP. I doubt that the suppliers will adjust their prices to these debit card increases. Then there is the problem of an item that says $4.95. You cannot increase it to $5.05, as inflation continues, you may be able to put the debt charges into the item, but certainly not immediately.

The other issue is that the surcharges explicitly show the consumer the bank fees; if this is hidden, as it will be in the government plan, what is to stop the banks from increasing it more? Debt fees now, compared to many countries, are high; what is to stop them from going up higher?

The Problem Lies with High Debt Fees

The fundamental challenge, which a ban on surcharging alone does not resolve, is the inherently unfair and often opaque structure of merchant service fees in Australia. Suppose the genuine policy objective is to create a more equitable financial environment for small retailers and deliver real savings. In that case, the primary focus must be on tackling these high debt fees. The proposal treats an effect rather than a cause. No one charges surcharges for cash, as it has no fees. The surcharge is there because of the debt charges.

A Call for Genuine Reform: What Should Change for True Fairness?

If the government is truly serious about fostering a fairer commercial environment, then the policy approach must be more robust. Simply shifting a visible cost (the surcharge) into an invisible, absorbed cost for the retailer doesn't solve the underlying problem of excessive debt fees.

We need a meaningful reform that ensures that banks and card schemes are compelled to offer more equitable and competitive rates to all businesses, regardless of their size. Any ban on surcharges, if it is to be fair, must be intrinsically linked with real, enforceable, and significant reductions in the cost of accepting card payments for all retailers. Without this linkage, the policy risks being perceived not as a measure of support, but as an additional financial impost on an already challenged sector, while letting the major banks and large retailers continue to operate with their existing advantages.

The coming months will be crucial as this policy develops. It is vital that small retailers' concerns are heard and acted upon to ensure a truly equitable outcome.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Our recent EFTPOS Retailer Survey highlights the critical concern for Australian retailers, which resulted in many questions for me from retailers over this survey: When choosing payment solutions, retailers here gave reliability as their top priority, surpassing fast clearance and cost. While fast clearance remains the next most important, uninterrupted payment processing is essential for business continuity.

Payment processing reliability is not just a convenience; it's vital for business continuity. Yet our survey indicates that retailers frequently experience outages and pose a persistent risk. These outages would result in significant financial losses for retailers.

What hurts is that almost all IT infrastructure guarantees an uptime of 99.999% (we call this the five nines), yet no one sees it. A shop, let us say, open 8 hours a day, 300 days a year, would, based on this, have less than 1.5 minutes of an EFTPOS outage a year. I am sure we all have gone through more than 1.5 minutes of an EFTPOS outage.

Incidents involving Telstra and Woolworths demonstrate that even major businesses are not immune to payment outages.

For example, a retailer with $1 million in annual turnover and a 30% margin loses approximately $400 in revenue for every hour of downtime. This figure only reflects immediate losses. Long-term impacts such as damaged customer relationships, reputational harm, and customer attrition will be even more significant, though harder to quantify.

Under Australian Consumer Law, businesses may be entitled to compensation for financial losses caused by EFTPOS outages, even if the provider does not guarantee uptime. To make a successful claim,  it will take time as you need to document all losses thoroughly, then you will need to include POS reports comparing affected periods to normal trading to show the loss. I have seen a few people do this, with mixed results. We generally advise that if the EFTPOS provider makes a fair offer, accept it. One problem is that the EFTPOS providers know your figures as well as you do and have more money and experience in these matters.

Calculate the Cost of an EFTPOS Outage

Several direct and indirect factors determine the actual cost of an EFTPOS outage. The following outlines some key variables to help you estimate your potential losses.

Calculation

Average hourly revenue

An outage can occur anytime; take your yearly revenue and work out an hourly rate.

I should say here that Murphy's Law will tell you that outages will occur at the worst possible times, such as during peak trading hours, amplifying their financial and reputational impact.

Outage duration

This is hard to estimate, as customers have been knocked out for minutes, hours, and days. Do your best here. 

This one really hurts. Often, you use the downtime to do your books, and you see money going out, while your staff is doing nothing.

Card transaction percentage

Your End-of-Day reports will tell you this, I would expect somewhere between 50% and 80%

Estimated sales lost

Many customers carry little or no cash, and if EFTPOS is down, they cannot buy from you. Many will go elsewhere to buy the product. As a guess, I would say 50%, but I would not be surprised if it's closer to 100%.

Now multiply these out.

(Lost revenue) = (Average hourly revenue) x (Outage duration) x (Card transaction percentage) x (Estimated sales lost)

That is the easy part now, we need to add to this base figure.

Customer Reputational Behaviour    

What do the customers think of you? If they cannot buy from you, they will buy from someone else. What chance is that they will switch for good? It is said that if an outage occurs once, it is generally okay, but two or three is something else. What is the cost of losing ten customers a year to EFTPOS outages?

I have seen industry experts give figure 

Key Takeaway

The actual cost of an EFTPOS outage extends far beyond immediate lost sales. Reliability is the foundation of trust and operational continuity in retail. Both providers and retailers must prioritise robust systems and contingency plans to safeguard business performance and customer relationships. 

As Australia moves into a cashless society, our present government (both sides) will only make this problem worse by not putting more commitment into our electronic infrastructure.

Executive Summary

The following analysis examines retailer experiences with EFTPOS systems in Australia, based on survey data collected in April 2025. Before addressing the detailed findings, several critical insights deserve immediate attention:

Key Findings Highlight

• Integration Landscape: Linkly (most major banks) dominates with 43% market share, followed by Tyro (26%) and non-integrated solutions (23%).
• Reliability Crisis: Despite being the highest-rated factor (9.6/10), reliability remains a problem, with 68% of retailers experiencing at least one outage in the past year.
• Provider Comparison: Tyro users report significantly better reliability (45% with no outages) compared to Linkly users (21% with no outages), with Linkly users experiencing disruptions three times more frequently (31% had three or more outages vs. 10% for Tyro).
• Fee Handling Divide: 72.5% of retailers absorb EFTPOS fees rather than passing them on to customers, despite being cost-sensitive.
• Factor Correlation: Reliability and fast settlement to retailers are seen as operational necessities.

Survey Methodology This report analyses responses from 120 Australian retailers, not all of whom are our customers, who were surveyed in April 2025. Data includes integration types and importance ratings, with 10 being the highest. We asked them in our newsletter if they could fill out our online survey. It did take a long time to go through the analysis below. I want to thank Garth for his help in this survey.

Detailed Findings

What EFTPOS Integration Do You Use?

What it’s about:
This question asked retailers which EFTPOS system they use and whether it’s integrated with their POS (Point of Sale) software.

What retailers said:

• 43% use Linkly (the system behind most major banks’ terminals)
• 26% use Tyro
• 23% don’t integrate their EFTPOS with their POS at all
• The rest use smaller providers like Verifone or Spice/Simple.

What does it mean:

Linkly dominates despite being generally the most expensive system because it’s bundled with most banks. 

How Important Is Integrated EFTPOS to You?

What it’s about:
Retailers rated how important it is for their EFTPOS to be connected directly to their POS system.

What retailers said:

• Integrated users: Gave it a 9 out of 10 or higher score.
• Non-integrated users: Only 2.3 out of 10.

What does it mean:
If you have an integrated EFTPOS system, you love it mainly because it saves time and reduces errors. If you don’t, you probably can’t justify the cost.

How Important Is Reliability (No Downtime)?

What it’s about:
Retailers rated how critical it is that their EFTPOS always works.

What retailers said:

Average: 9.6 out of 10
Reliability is the highest-rated factor.

What does it mean:
Retailers can’t afford for their payment systems to go down. It was the most critical issue. 

How Many EFTPOS Outages Have You Had in the Past Year?

Now, let's look at reliability in detail.

What it’s about:
Retailers reported how often their EFTPOS system stopped working in the last 12 months. What we found interesting here is that everyone remembered the outages.

What retailers said:

Outage frequency across all respondents shows major reliability issues; 68% of retailers experienced at least one outage in the past 12 months, with nearly a quarter suffering frequent disruptions (three or more outages). This is particularly problematic, given the top importance rating assigned to reliability above.

Integration method significantly impacts outage experiences:

Tyro users report substantially fewer outages than Linkly users, with more than twice the percentage experiencing no outages at all. Linkly users suffer from the highest rate of frequent disruptions, with 30.8% experiencing three or more outages, three times the rate of Tyro users (9.7%). This suggests significant reliability advantages for Tyro. 

What does it mean:
Outages are common across all retailers and can seriously disrupt business, especially for those relying on Linkly.

Tyro users:

• Nearly half (45.2%) of Tyro users reported no outages, the best among the three options.
• Only 9.7% of Tyro experienced two or more outages, significantly lower than other options.
• This suggests Tyro is the most reliable integration type in terms of uptime, aligning with its reputation for robust, integrated EFTPOS solutions in Australia.

Non-integrated users:

• 42.9% reported no outages, similar to Tyro and much better than Linkly.
• The proportion of users experiencing three or more outages (14.3%) is comparable to Linkly.

Linkly users:

• Only 21.2% of Linkly users had no outages, the worst on the list.
• A significant 30.8% experienced three or more outages, which is not good.

If reliability and minimising payment outages are your top priorities, Tyro appears to be the superior choice among the options compared. Non-integrated systems performed reasonably well, while Linkly, despite its dearer cost, showed a higher risk of outages based on this data.

How important is it that your bank offers EFTPOS?

What it’s about:
This asked if it matters whether their EFTPOS comes from their current bank.

What retailers said:

• Average importance: 6 out of 10.
• Only 38% rated it as “critical.”

What does it mean:
Retailers are open to using non-bank providers and are prepared to consider other providers if they offer better features, such as reliability.

How Important Are the EFTPOS Rates (Visa, Mastercard, Debit)?

What it’s about:
Retailers rated how much they care about the fees charged for EFTPOS transactions.

What retailers said:

• Average rating: 9.2 out of 10

What does it mean:
Transaction fees were among the top concerns for retailers, where every cent counts today.

How Important Is Accepting Amex or Diners?

What it’s about:
Retailers rated the value of being able to accept American Express or Diners Club cards.

What retailers said:

• Average rating: 3.7 out of 10

What does it mean:
Most retailers here are not that concerned with Amex/Diners

How Important Is Having No Lock-In Contract?

What it’s about:
Retailers rated how much they care about being free to leave their EFTPOS provider at any time.

What retailers said:

• Average: 7.6 out of 10

What does it mean:
Flexibility matters; retailers don’t want to be tied down.

How Important Is Fast Settlement (Same/Next Day)?

What it’s about:
This asked how much retailers value getting their EFTPOS money quickly.

What retailers said:

• Average: 9.3 out of 10
• 87% want funds within 24 hours.

What does it mean:
A fast cash flow is vital; retailers want their takings in the bank as soon as possible. No one likes large sums of money somewhere in the banking cloud. They need it now, where they can use it.

How Important Is a No-Cost EFTPOS Option?

What it’s about:
This asked about the appeal of “no-cost” EFTPOS systems. Although generally dearer, it passes the cost from the retailer to the customer.

What retailers said:

• Average: 8.1 out of 10

What does it mean:
Retailers like the idea of not paying fees themselves, but there are trade-offs: It raises their prices. Overall, it was not highly rated.

How Important Are Terminal Rental Fees?

What it’s about:
Retailers rated how much terminal rental costs matter.

What retailers said:

• Average: 8.5 out of 10

What does it mean:
Ongoing device costs are a consideration, but other issues are more critical.

Are There Any Other Factors That Matter to You?

What it’s about:
This was an open-ended question for anything not covered.

What retailers said:

• Only 17% filled in this question here
• A few mentioned things like terrible customer support and Telstra's coverage in their area. We could see no pattern.

What does it mean:
The low figure and many responses here suggest we covered most mainstream issues.

How Do You Handle EFTPOS Fees?

What it’s about:
Retailers explained whether they pass EFTPOS fees to customers, absorb them, or consider a change.

What retailers said:

• 72.5% currently absorb the fees 
• Of those absorbing fees, 32.1% are thinking about charging

What does it mean:

Most retailers absorb card fees, but many consider passing them on to customers. Now this was surprising, which was not expected when we looked in detail, that although Linkly is generally the most expensive system, our analysis reveals an unexpected relationship between EFTPOS providers and fee-passing behaviours:

Tyro Users:

• 57% currently absorb the fees 
• Of those absorbing fees, 67.4% are thinking about charging

Linkly Users:

• 80% currently absorb the fees 
• Of those absorbing fees, 25% are thinking about charging

Why should a dearer EFTPOS have a lower charge rate? You tell me. I think it might be because this ability is inbuilt in Tyro, but this needs more research. 

Summary Table: What Matters Most to Retailers

The disparity in technical performance across integration types is significant. Tyro demonstrates superior reliability, with 45% of users reporting no outages compared to just 21% of Linkly users. Conversely, Linkly users report the highest rate of frequent disruptions, with 31% experiencing three or more outages, compared to 10% for Tyro and 14% for non-integrated solutions.

Satisfaction Drivers Analysis

The survey data indicates a clear hierarchy of factors that drive retailer satisfaction with EFTPOS systems:

The ranking reveals retailers prioritise operational efficiency (reliability, settlement speed), followed closely by financial considerations (rates, fees). The relatively low importance of Amex/Diners acceptance suggests most retailers view this as optional rather than essential.

Analysis of Key Metrics

This is done to see if any overriding themes emerge from the survey; the closer the value to 1, the more they fit into a theme.

The extremely high figure for reliability with fast settlement indicates that retailers view these as the most critical points.

Other factors, although important, fall into the optional category. 

Conclusion

The survey data reveals critical insights.

• Reliability and fast settlement times are non-negotiable for most retailers.
• Integrated EFTPOS is highly valued by those who use it.
• Outages are common, especially for Linkly users. Our poor electronic infrastructure will cause problems in cloud solutions.
• Most shops absorb card fees, but many are considering passing them on.
• Cost matters, but not at the expense of reliability and fast settlement.

If you’re a retailer, reliability and quick settlement will guide your system choice, even before considering transaction fees or rates.

If you’re an EFTPOS provider, the strongest levers for market share are minimising outages, offering transparent and competitive rates, and settling quickly.

If you’re a bank, bundling with Linkly may not be a long-term defence against competitors' better reliability and feature offerings.

Final note

I want to thank those retailers who helped us make this survey.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Every retail business faces urgent situations, such as crashed POS systems during peak sales periods and sudden staff absences. But what happens when procedures and systems aren't in place to address these urgencies?

This real-world example illustrates how poor password management turned a "VERY urgent" matter into a seven-month saga with significant business implications.

Inaccessible Financial Records

In December 2024, our team received a concerning call from an accountant regarding one of our clients, Louis, who had unexpectedly fallen ill and moved to a nursing home. The accountant needed to access Louis's financial records stored on his computer to finalise his affairs. Unfortunately, the computer was not working. As the accountant said, it was "VERY urgent."

So we immediately offered assistance. We asked him to send that shop's computer to our engineering bay for immediate repair. What followed was a series of delays and complications that transformed this "urgent" situation into a long ordeal:

Week 1

We heard nothing from the accountant after our initial conversation.

Week 3

The accountant's assistant arrived unannounced with the computer. Upon examination, we discovered that the operating system had been deleted. So we said it would take a few hours to see the damage. The assistant left and said to contact them as soon as possible when we had an answer, as it was urgent.

We got the computer working but discovered that it was protected by many passwords, which was unsurprising, as most financial computers are similarly protected. We recommend it; click here. 

We notify them of this promptly.

Week 5

After notifying them about the password issues, we finally received some passwords. However, during our investigations, we discovered we needed additional credentials for several protected areas. We told them this.

Week 9

We received a follow-up for them. The accountant acknowledged the urgency but mentioned he was going on holiday soon and would be gone for a week.

Week 13

The accountant provided more passwords, which again proved insufficient.

Week 17

We received a USB stick with some information. It helped, but the accountant announced he was departing soon for a month-long European holiday.

Now

What began as a "VERY urgent" matter was now guaranteed to extend beyond seven months, potentially having profound implications for Louis's financial affairs.

What hurt is that it was entirely preventable.

Password management best practices

This scenario highlights one of the most significant vulnerabilities in many retail businesses: the single point of failure. In Louis's case, he was the only person with access to critical financial information. This common but dangerous practice leaves businesses extraordinarily vulnerable when that person becomes unavailable for any reason.

For retailers, I have seen this risk extend beyond financial data to include:

• POS system administrator credentials
• Supplier portal logins
• Banking and payment gateway access
• Inventory management system passwords
• Customer relationship management data
• Cloud storage accounts
• Social media and online marketplace logins

If only one staff member can access these systems, your business is one unexpected absence away from significant operational disruption.

Consider the potential costs of password-related business disruptions.

Crisis management for businesses

The other revealing aspect of this situation was the disconnection between the stated very urgent and the actual response time. While the accountant consistently emphasised the urgency of resolving Louis's affairs, somehow, I did not see it. Cynically, I wonder if the accountant did not benefit from this delay.

Business continuity

The best emergency response planning isn't seen in what happens, but in what doesn't happen.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

We're pleased to announce to our readers that POS Solutions has been officially recognised as the #2 Best Point of Sale Blog in Feedspot's prestigious "40 Best Point of Sale Blogs & News Websites. We think that this recognition reflects our ongoing commitment to delivering valuable, actionable insights for Australian retailers seeking to optimise their operations through practical POS Systems technology. I think it shows that, unlike other blogs, we supply information you can use.

Feedspot is a vast site that 6 million individuals use to stay up to date and current. Its expert panel evaluates thousands of blogs worldwide based on relevance, content authority, social media following, and information freshness before awarding us this significant recognition in what is claimed is the most comprehensive list of Top 40 Point of Sale Blogs on the internet.

We are honoured to have you as part of this!

This acknowledgement validates our team's focus on providing Australian retailers with practical, locally relevant guidance addressing your business challenges.

What This Recognition Means for Australian Retailers

Being ranked second among the world's top POS blogs demonstrates that our Australian-focused approach resonates locally and internationally. This recognition confirms that our content strategy, addressing the unique needs of Australian retail businesses, delivers exceptional value to our readers.

At POS Solutions, we've dedicated ourselves to supporting thousands of Australian businesses with specialised point-of-sale systems designed specifically for local market requirements. Our targeted expertise in key retail sectors has been instrumental in this achievement:

• Newsagencies requiring efficient inventory and subscription management
• Pet shops need integrated loyalty and stock control solutions
• Pharmacies balancing compliance with streamlined customer experiences
• Specialty retailers across diverse Australian markets

Thank you again for being part of our journey.

We're proud to serve Australia's retail community and look forward to continuing with you more.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults for various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Dead stock is inventory that hasn't sold within its expected timeframe. For most retail businesses, non-selling inventory is typically classified as slow stock after 6 months, and after 12 months, any inventory that doesn't turn over is officially considered dead stock.

An accountant can then legally put them as a liability on your balance sheet, as it silently drains your profits by tying up valuable capital and retail space.

Too many people I see make the costly mistake of placing dead stock with a significant discount in prime selling locations, hoping for a quick sale to get rid of it. This diminishes the overall shopping experience. It also lets your customers think that you are a discount shop. Let us not make that mistake.

Understanding Dead Stock

Officially, dead stock is merchandise that hasn't sold within 12 months. Still, it can include seasonal items that missed their peak selling period, trend-based products that never worked for you, such as the recent examples of Snow White dolls after the movie flopped, or items that don't sell in your shop.

Financial Burden

Based on our experience, our installers report that about 20% of the stock is dead when our POS system is installed in a shop. That's a lot, considering that 20% of the shop is closed.

Identifying Dead Stock

Modern point-of-sale systems should provide you with tools to identify dead stock, hopefully before it becomes a significant problem. Additionally, insights from a proficient SEO agency like Nine Peaks can help optimize product visibility online, reducing the chances of inventory stagnation.

Our POS system can analyse sales data and highlight items that haven't sold within a specified timeframe, enabling you to take proactive action. This technology-driven approach lets you identify potential issues early and implement strategic solutions. I have discussed this here.

Data-Driven Inventory Decisions

With this comprehensive sales data at your fingertips, you can:

• Set automatic alerts when items haven't sold within a specified timeframe
• Track sell-through rates by category, supplier, and season, we call that the inventory turnover rate.
• Analyse which displays and locations generate the highest sales
• Forecast optimal stock levels based on historical performance
• Generate markdown recommendations to maximise recovery on slow-moving items

The Psychology of Effective Retail Displays

Understanding why dead stock accumulates is only half the battle; what you have retail merchandising strategies o get rid of it. It involves insight into how customers navigate and interact with your retail space.

It involves creating what retail experts call the "treasure hunt" experience, using this dead stock to draw shoppers progressively deeper into your store and encourage exploration and discovery. Research shows that customers typically spend 15% more time in stores when they are arranged to facilitate this journey of discovery.

Now, suppliers advocate for their products to be displayed together, which makes it easier for them, but this rarely aligns with how customers shop. Shoppers don't typically think, "I need something from supplier X today." Instead, they think, "I need something for my kitchen" or "I'm looking for a birthday gift." Retailers should use theme-based displays as they work directly to their customers' needs and shopping patterns.

Common Mistakes in Dead Stock Display

Retailers' most frequent error is ignoring it.

However placing dead stock in prime selling locations is the next. What is the point of putting stock that does not sell in the best part of the shop? These areas should be reserved for your best-selling, full-margin products.

When you place dead stock in these premium positions:

• You're using your most valuable retail real estate for your least valuable products
• You're training customers to look for discounts first
• You're creating a "discount store" impression that can devalue your entire brand
• You're reducing the visibility of products that sell well and are reasonably priced.

The next big mistake is creating a large clearance sections that dominate your store's visual landscape. When clearance merchandise takes centre stage, it sends a powerful message to customers that your merchandise isn't worth buying at full price.

Rather than falling into these common traps, implement these proven display strategies that balance clearing dead stock with maintaining your store's visual appeal and professional image.

Strategic Approaches to Dead Stock Display

The Strategic Attention Zone Approach

A more effective solution for displaying dead stock is implementing a strategic attention zone approach. This method involves:

• Placing clearance merchandise in less-trafficked areas of your store
• Using attention-grabbing elements (like distinctive signage or lighting) to draw interest
• It forces people to look at your shop more.

Customers seeking bargains will venture into these less prominent areas to check out potential deals. This approach does not devalue your stock or shop. It preserves your prime selling space for high-margin items while giving dead stock visibility and the opportunity to sell.

Bundling Opportunities

Another effective strategy is bundling dead stock with complementary products that sell well. For example, if a particular item isn't selling, rather than discounting it heavily and placing it in a clearance bin, try bundling it with an item that does sell.

This approach can help you sell items using dead stock sales. I have a customer who took a recipe book that didn't sell and bundled it with a recipe book that did sell, then sold them as a bundle. It worked.

When to Apply Strategic Discounting

While maintaining margins is essential, strategic discounting has its place in managing dead stock. The key is timing and implementation:

• Implement progressive discounting rather than immediate deep discounts, and slowly work on the discount to find its price.
• Create time-limited promotions to generate urgency. I only have four left, and we won't get them back once they're gone.

Rotation and Refreshment

Put some of your dead stock in this area. After a while, pull out the items that don't sell and put in new dead stock. People are always looking for something new. Now you have another category of stock items, "the truly dead stock."

Creating a Dedicated Clearance Strategy

About 20% of your stock is dead. You need a deliberate strategy for handling dead stock to maximise recovery while maintaining your store's professional appearance.

The Clearance Calendar

Establish a regular clearance calendar that aligns with your business cycles. This might include:

• Monthly "refresh" evaluations, where slow-moving items are identified
• Quarterly deeper clearance events for items that have truly stagnated
• Seasonal transition periods, where remaining seasonal merchandise is cleared, are the perfect time for the Australian stocktake sale.

The Clearance Zone

Designate a specific area of your store for clearance merchandise. This space should be:

• Consistent in location, you want the bargain-hunters to know where to look
• Distinct enough from your main displays to maintain separation, so it does not cheapen your shop.
• Organised not to look like a jumble sale - Deep in your shop to drag people in.

The key is that this area shouldn't occupy your prime retail space but should still be accessible and professionally presented to shoppers.

Measuring Success with Key Metrics

To evaluate the effectiveness of your clearance strategy, track these key performance indicators (KPIs):

• Inventory turnover rate before and after implementation
• Average time to sell dead stock items
• Recovery percentage on original cost
• Impact on overall store margins
• Changes in new inventory sell-through rates

These KPIs provide objective feedback on your strategy's effectiveness and areas for refinement.

Implementing Your Dead Stock Strategy: Action Steps

Take action now, to find your slow and dead stock using our POS reports will only take seconds. 

Audit your stock

Use your POS system to generate reports of items that haven't sold in the past 6 months and stock that hasn't sold in the past 12 months. Calculate the size of the problem.

Examine other shops' clearance areas.

See what works for others. See how they use it.

Create a Dedicated Clearance Zone

Designate an area for clearance items that doesn't dominate your store layout but still provides visibility.

Visual merchandising techniques

Typically, a red sign works well in Australia, for example, here.

Set Review Period

Schedule regular reviews of inventory performance. You want to catch slow-moving items before they become dead.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

One of AI's great promises is to take data and produce advanced information. The problem is that today, we have too much information that is hard to process; it's just too much. So, let's see what happens when we take real point-of-sale software data and put this promise to the test.

So, we decided to test the AI's understanding of a typical SMB retail shop from its customer's sales report. Knowing your customers is essential for retail success, and we will check whether an AI customer data analysis can help us make informed decisions about them.

The added question is which free AI tools can perform this task most effectively. Only a few SMB retailers have paid accounts for AI ChatBots, so we decided to restrict our tests to the free version. As you will see, we immediately ran into problems with this during this test.

Okay, let's test that and see.

Our Test

We have already established a comprehensive evaluation process to determine which AI systems deliver the most actionable insights here.

So, we challenged six leading free AI systems to analyse real customer sales performance data from 2023 and 2024.

Each AI system received identical instructions: "Using data from the attached CSV files, analyse and compare sales performance and visit frequency for top customers in an Australian Newsagency between 2023 and 2024. Identify key changes in behaviour for the highest-value customers."

For a fair assessment, we evaluated each system's customer analysis report using nine key performance indicators and scored out of 10:

Evaluation Framework

Quality of Information

How accurate was the data presented about customer behaviour and trends? If it's not correct, it's worse than useless.

Usefulness

Do these insights improve a retail business? We do not need useless information.

Clarity

Was the analysis presented straightforwardly and clearly?

Actionability

Did the report provide clear, implementable recommendations?

Accuracy

Were the calculations and conclusions drawn from the data correct? AI is known for giving wrong results. This is a common problem of AIs.

Adaptability

Did the analysis take into account specific retail contexts and customer demographics?

Depth of Analysis

Did the report go beyond surface-level observations to uncover meaningful patterns?

Creativity

Were there innovative suggestions for addressing the identified changes in customer behaviour?

Customer-Centric Approach

Did the analysis effectively segment customers and provide tailored approaches?

Testing Limitations

Unlike our pricing study, we encountered several practical limitations with free AI access immediately:

Claude and Chatgpt required paid accounts to process our instructions, so they failed the free test. However, as they are very important AI chatbots, we decided to test them with our paid accounts, but they failed immediately.

QWEN would only process our prompt by editing it in the window's notebook, so we had to redo the tests with consolidated data. Doing this with QWEN requires some computer skills, which others do not need. We marked it down for this.

All the other AI systems could process our request without issue using their free tier offerings.

Immediately, we saw that when we analysed the solutions, not all of them offered the same ability.

Results Summary

The performance rankings revealed interesting shifts from our previous pricing analysis:

Interestingly, while Google AI topped our previous pricing study, it ranked last for customer analysis.

Detailed Analysis of Each AI Tool

ChatGPT (Score: 78/90)

On the paid version, and I stress the paid-only

Strengths

• We thought it showed exceptional clarity. The report was well-organised, with sections in a logical progression We liked its innovative customer segmentation framework, which includes categories like "Growth Champions" and "Frequent Shoppers."
• We all liked its analysis and felt it was comprehensive
• What we liked was its tailored recommendations for different customer segments

Problems

• There was nothing we thought was innovative, but it worked by the rules. It ignored the location, that we were in Australia, and the same problem we had in the previous test.

Overall

ChatGPT transformed customer data into strategically actionable segments that you can use in your marketing and sales approaches. It saved time but gave us little originality.

Grok (Score: 68/90)

Since it's now free, this is a brilliant AI. You should be delighted with it.

Strengths

• We notice that it is outstanding in its accuracy and attention to detail
• The report was an in-depth and comprehensive analysis
• We liked its comparative analysis of individual customers
• It came up with a category, and we liked the emerging high-value customers

Problems

• We thought that most of the insights were limited in actionability; it's nice to know something, but what is the point of telling us if you cannot use it?
• Also limited in creative solutions
• The report sections did not follow a logical order.

Overall

Grok provided an excellent analysis and identified some subtle patterns in customer behaviour. It would be good to investigate why, though you'll need to develop action plans based on its findings.

DEEPSEEK (Score: 67/90)

Strengths

• Excellent formatting and visual emphasis that make your information accessible
• We liked that it had specific, implementable recommendations tied to analysis findings.
• It was accurate in its data presentation, with correctly identified trends
• Effective customer segmentation approaches

Problems

• Did not give a detailed customer-by-customer examination
• Not that good in a specific Australian retail context
• Recommendations were sound but somewhat conventional

Overall

DEEPSEEK struck a good balance between analytical depth and practical recommendations.

QWEN (Score: 66/90)

Do not underestimate this AI. The only reason it did not win was that it required some advanced computer skills to use. It was not just a simple matter of using it. 

Strengths

• We liked its brevity, which offered highly actionable recommendations
• We liked its concise format, clear headings and bullet points
• It provided good creative thinking in recommendations for improving customer visits
• We liked its suggestion for improving a loyalty program and bundling.

Problems

Small report: Now, this may not be a problem for you. Some of us liked that it produced a good condensed report. They felt they did not want a book; the quicker it could be said, the better. I disagreed; I wanted to know as much as possible. Let me know your thoughts on this below. We thought it didn't consider that we were talking about retail.

Overall

Many people like QWEN's concise, action-oriented approach, which provides quick and practical guidance without requiring extensive analysis.

Claude (Score: 59/90)

It was a paid version, yet its score was bad. You expect it to be better if you pay, but you don't get what you pay for with AI.

Strengths

• It provided accurate data analysis throughout
• We did like its breakdowns of top customers and their performance changes
• It had clear section headings and a well-organised structure
• It identified key account growth opportunities
• It also identified at-risk relationships

Problems

• Overall, it lacked specific implementation strategies
• The segmentation of customer types was bad.
• Again, as with some others, not much is known about Australian retail
• Report sections varied in detail

Overall

Claude was solid but struggled to translate those insights into tailored, implementable recommendations.

Google AI (Score: 55/90)

Now, Google AI is a good AI. Last time, it came out the best, but here, it's the worst. Google changed the free version because it wants you to switch to the paid version.

Strengths

• Methodical approach to analysis
• Accurate calculations
• We thought that it produced logically sound conclusions
• It considered many factors

Problems

• It presented an analysis without any specific recommendations
• Little creative
• Minimal segmentation of customer types
• Limited adaptation to retail

Overall

The free Google AI fell short of providing the strategic interpretation and actionable guidance that retailers need.

Key Findings and Implications for Your Retail Business

Our evaluation revealed several important considerations for using AI:

Different tools excel at different retail tasks

It's all good to analyse, but an ideal AI solution should connect the dots between "what's happening," "why it's happening," and, most importantly, "what to do about it." Not all AI ChatBots are equal.

The significant shift in rankings between our pricing study, where Google AI dominated, and this customer analysis evaluation highlights the critical point that AI is not a one-size-fits-all approach. It also showed that suppliers are moving to a user-paid model.

Usability

Busy retailers need an AI that produces a clear organisation and logical flow.

Practical Recommendations for Australian Retailers

Your specific need

The reality is that different AI systems excel at other tasks. There's no way around it; you need to test which one works better in your circumstances.

Prioritise actionability

Choose AI marketing tools that connect analysis to specific actions you can take. Ask yourself: "What can I do tomorrow based on this information?" If the answer isn't clear, the tool may not be right for your needs.

Provide detailed context

We tested with more specific information about a business, location, and customer base. We did get better results, but that's outside of this test. I would include such information if I were doing it in a shop. Don't assume the AI knows your business environment; even if it does, it can use it.

Verify findings

We found that AI made errors and provided advice that didn't align with business reality. Always check.

Continue with a focused question.

These reports should be considered the start of your analysis. To get more insights, I would ask specific questions about the customer, the segments, loyalty patterns, or purchase frequency. For example, "Which customers decreased their visit frequency in the last quarter?" will yield more actionable results than "Analyse my customers."

Integrating AI Insights with Your POS System

For retailers using our POS systems, connecting AI analysis has tremendous potential. Exporting customer sales data in formats your AI can analyse is easy; you can do this in the report section. I will discuss this in a future post.

The Future of AI

This evaluation demonstrates that AI tools have already reached impressive capabilities. Using them, you can get free access to dedicated data analysts. They offer you access to sophisticated insights previously available only to large organisations.

My thoughts

While it's free, I recommend looking at Grok, our winner.

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

We're amazed by the overwhelming response to our EFTPOS survey. Although more responses are still coming in, we need to close the study on Wednesday. If you wish to participate, please do so immediately, as this is your last chance.

We will need to analyse the collected information, and due to the high volume of responses, this process will take some time. However, we are working to complete the analysis quickly, as we aim to have the findings ready before the upcoming elections. We believe the results could help inform and frame the public debate, which was the primary reason we were tasked with conducting this survey.

The processed information will be shared with relevant authorities and used to support decision-making in this area.

Thank you to everyone who participated.
 

Written by:

Bernard Zimmermann is the founding director at POS Solutions, a leading point-of-sale system company with 45 years of industry experience. He consults to various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.