The Reserve Bank of Australia's (RBA) ban on surcharges for debit and credit card payments, proposed to take effect on 1 July 2026, will, if accepted, significantly reshape the payment methods used in your store. This reform targets surcharging fees that retailers add to transactions paid for using Visa and Mastercard.

I am building on my article from yesterday, which sparked lively discussions. Let's explore the key issues you should consider.

Firstly, this proposal does not address the cause of why people charge these surcharges; the symptom of the surcharge is not the cause. Nor does it address the fact that SMB businesses pay significantly higher fees than larger organisations, often 350% more. The only point mentioned here that is relevant is the greater transparency in the costs. However, it's become quite transparent now. When I reviewed my EFTPOS and credit charges last time, I got, among other documents, a charge table showing the rates the bank would charge depending on my turnover and average transaction value.

If the proposal is accepted, likely fallouts include reduced cash transactions, increased credit card usage, continuing fee disparities between SMBs and large organisations, and some inflationary pressures.

Exploring the Key Fallouts if the Proposal Proceeds

Why Cash Might Fade Faster

13% of payments were made using cash in 2022, which is down from 70% in 2007, and that number is projected to fall to just 4% by 2030, according to Australian Banking Association.

Cash has long been popular for small, everyday purchases, such as a quick coffee or a newspaper at your local shop. Its appeal lies in the simplicity and lack of fees for both you and the customer. However, with surcharges banned, the cost barrier between cash and cards vanishes for consumers. Why would they dig for coins when tapping a card costs the same? This shift would further diminish the role of money, accelerating a trend already evident in Australia, which is what the Australian government aims to achieve.

Beyond diminishing cash use, we can expect to see a greater use of credit cards, as this ban would also equalise charges, leading to another key shift: many will ask, Why use debit when they can get credit for free?

Debating the Consumer Savings and Business Losses

The RBA estimates that Australian consumers could save nearly $1.2 billion annually if the proposal is implemented, equating to approximately $60 per card-using adult. This figure is debatable. Much of this money will shift elsewhere in the system, rather than disappear. That $1.2 billion represents a substantial loss to Australian businesses, particularly the large issuers of debit and credit cards, who stand to take significant revenue hits if the reforms proceed in their current form without changes.

Fee Hikes

Major banks will seek to recover losses from lowered interchange fees.

Running payment networks for Visa, Mastercard, and EFTPOS is enormously expensive. The cost of infrastructure, security, and global operations costs won't disappear under this plan.

Banks will need to pass these costs on somewhere. They might increase cardholder fees, such as annual charges or interest rates. But hiking merchant fees through administration charges is more likely.

Uncertainties Around Overseas Cards and Surcharging

It's unclear whether the plan will allow surcharges on overseas cards, such as American Express or a Visa issued in Singapore. I suspect that some form of surcharging will still be permitted for international transactions. It creates a pain point, as we will need to distinguish between domestic and foreign cards at checkout, which is long overdue. If this is done, we can adapt our POS systems to automatically detect card types, allowing us to handle surcharges without slowing down service.

Potential Inflationary Effects and Price Adjustments

Many businesses that currently apply surcharges are already considering price increases to compensate for the lost revenue. If you are among them, this approach makes sense to protect your margins, but it will contribute to slight inflationary pressures across the economy. If you are affected here, this will require careful handling to avoid alienating price-sensitive customers.

Turning Challenges into Opportunities with Practical Strategies

It's not all downside, as I stated yesterday, these changes will eliminate surcharge-related disputes, thereby fostering a better shopping experience. The reality is that customers hate surcharges.

With the timeline in 2026, you have time to prepare.

One idea worth considering is offering cash discounts after the ban is lifted. It remains an allowable option and can encourage customers to choose cash, thereby reducing your fee exposure. For example, one of my clients offers a free can of drink if the transaction is over $30 and is paid in cash. It worked well.

You need to consider how to adapt your payment strategy.

If you own or manage a retail business in Australia, it's time to consider the Reserve Bank of Australia's (RBA) proposed changes to card payments, which aim to eliminate surcharges on debit and credit cards. While the RBA surcharge ban offers some benefits, it also brings challenges for SMB retailers.

The Labor Party entered the last election committed to eliminating debit card surcharges, which were part of their election promises. Now the RBA has expanded this significantly, proposing a broader ban that includes both debit and credit cards. If it goes through, it will directly impact many SMB retailers as it means you will no longer be able to impose a surcharge to offset the costs of accepting credit, debit, or prepaid cards from major networks such as Mastercard, Visa, or EFTPOS. This forces you to absorb these expenses.

After yesterday's consultation, although we were hoping for something better, we concluded that it's not all negative, as the RBA is also requesting that interchange fees be lowered. For instance, debit card interchange fees are to be decreased from 10 cents to 6 cents per transaction, while credit card fees go to 0.3%. The plan also caps fees for foreign cards, but it's unclear how this works. For example, if a French bank charges 50 cents, what does the RBA propose? Reading the document, it's unclear how these lower fees are to be passed on to the SMB retailer. My immediate concern is whether the banks will be able to charge additional or higher administration fees to offset these reductions.

The RBA plan will require payment processors to disclose their fees in a clear and comparable manner, segmented by merchant size and card type. Although some saw this as a positive, I view it as insignificant, as reputable payment processors have been doing this for some time.

These changes are scheduled to commence on 1 July 2026. At least this gives us all a reasonable timeframe for adaptation.

Before I review some of the positives and negatives, let me note that today, the debit card is the dominant form of payment in retail, and it should, as such, be the default payment method for pricing.

Positives for SMB Businesses

The reforms could reduce card acceptance costs through new, lower caps on interchange fees. Since most SMBs already absorb these costs into pricing, they stand to save money. The RBA estimates that 90% of businesses that do not surcharge will benefit (our data shows 70% do not surcharge), meaning the majority could still gain.

Eliminating the surcharge will prevent many customer disputes, complaints, and confusion, and reduce friction with customers.

The push for greater fee transparency is another benefit, as it eliminates the need for you to request it directly. Potentially leading to cost savings.

It does not stop you from offering discounts for cash transactions. This approach rewards customers who opt for the lower-cost option of cash without violating the new surcharge ban.

Implementation costs, while present, are relatively modest. In our POS System and most others, it's just a minor change to the settings. The price of many goods in the shop will need to be changed to include the costs of the surcharges.

Challenges and Considerations, the negatives.

While the reforms offer substantial upsides, they also present problems for SMB businesses operating today with tight margins. Payment providers will still be charging fees, which SMBs must now absorb. For retailers in low-margin sectors, such as those with regulated or capped prices, like Lotto, I doubt they will see an increase in merchant margins to compensate for the loss of the surcharge. Lotto has made it quite clear that they do not like these surcharges.

Unfortunately, the plan favours larger retailers, who now have better rates, over smaller ones, and the RBA seems unconcerned with that.

The ban on surcharges encourages customers to use higher-cost cards. Many will switch from debit to credit cards. What happens if an American Express card is used?

Reliance on payment providers to pass through savings from lower interchange fees introduces uncertainty. I have spoken to them several times about this issue, and they claim that they are making little of it. If so, where do they make up the difference? Therefore, although the RBA anticipates that these reductions will benefit merchants, there is no guarantee that they will occur. Will there be higher administrative charges?

Additionally, merchants will lose some negotiating leverage with banks, as the current surcharges have been a concern for the banks.

The Outlook for SMB Retailers

With the current strong political backing, the RBA's plan is likely to proceed as outlined in their July 2025 consultation paper. SMB retailers should prepare now for the July 1, 2026, rollout.

So get ready to adapt? Once we are aware of the exact changes, we will provide a free guide to our users to help them make the necessary adjustments.

This information is based on the RBA's consultation papers from July 2025, which can be found here.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with 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.

Negative inventory, also known as negative stock, is when your system shows that item quantities are negative. For SMB retailers, this is a warning sign of serious inventory management issues that need immediate attention. Every instance points to deeper problems in your POS system. If not fixed, this negative stock can quickly lead to significant issues.

Understanding the causes of negative stock is a first step toward resolving these discrepancies.

Understanding negative stock

When your records display negative stock, your stock quantities information is unreliable, making it difficult to make informed business decisions. As a result, staff may lose trust in the POS system and hesitate to rely on its information. If the staff start to realise that your controls are weak, it can be disastrous as it invites staff theft.

Additionally, negative inventory distorts sales, purchasing, and financial reports, making it more difficult to analyse performance.

Beyond data reliability, negative inventory also disrupts key business reports.

Causes of Negative Inventory and How to Prevent Them

Negative stock usually results from a mix of factors. -Delays in processing supplier invoices (leading to sales before stock is entered into the POS System) -Errors in supplier invoices -Staff entering incorrect quantities.

Fortunately, some preventative measures can help minimise these inventory incidents.

Preventing negative inventory starts with robust staff training. Ensuring your team understands correct inventory procedures and that you consider it essential to do accurate data entry. Checking carefully that suppliers' electronic invoices match the deliveries. Implementing barcode scanning for both receiving and selling stock significantly reduces manual entry errors.

Financial and Customer Service Consequences

Negative stock can have significant financial consequences, as it distorts your KPIs and leads to incorrect calculations of the cost of goods sold (COGS) and profit margins.

Possibly the biggest problem is that it will result in inaccurate GST tax reporting.

From a customer service perspective, negative inventory can lead to lost sales and a poor customer experience, as the computer indicates that you do not have stock when, in fact, you do have the stock the customer is looking for to buy.

Detecting and Correcting Negative Inventory

To address negative inventory, use your POS system to run reports like 'Quantity On Hand' or 'Price Check.' It is easier to do it one department at a time rather than the whole shop at once. Items with negative quantities are clearly shown. Please investigate each case to identify whether the cause is a counting error, data entry mistake, or delayed invoice.

These financial inaccuracies also impact customer service in tangible ways.

Finding the negative stock

Fortunately, we have a quick and easy way to check stock quantities for what you have on hand.
 
Go to reports. There is an option for Quantity On Hand and Price check; click on that.

We exclude items with zero stock. 
 
I suggest doing it by department, so in this example, I picked the dissection (department) tobacco. 
 

Now, in the outcomes report, which lists the details of your item, look at the quantities on hand in the QOH column. You may see items in brackets, as indicated by the green arrow below; these are the negative Stock Discrepancies.

At first, you will find it a lot of work to fix it, but once done, it's relatively quick.

You should frequently check this report for negative stock values, say monthly until the problem is fixed.

Now, audit these negative items to determine what went wrong in your inventory management system.

Inventory Adjustment Best Practices

After completing a stocktake, your inventory figures are at their most accurate. So it is the ideal time to review and correct any discrepancies.

When making inventory adjustments, it is a good idea to determine the reason for each correction. It can reduce the problem in the future.

Real-World Example: The Cost of Negative Inventory

A staff member mistakenly told a customer that the item was out of stock when it was actually in stock. It led to a lost sale for the business. When the staff member saw they had the jumpers, they reported this to the owner. What she found was a negative quantity for a popular jumper. However, upon investigation, they discovered that they had not entered a recent delivery invoice.

Empowering Your Retail Business

With proactive prevention and early detection, negative inventory can be handled by utilising tools like our reports to stay informed about your stock quantities.

Only by understanding the causes can you fix the problem.

Let us know if you have any other questions!

*This article draws on industry best practices and current expert recommendations to help SMB retailers understand and tackle negative inventory.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with 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.

Maintaining a healthy retail profit margin is more crucial today as everything is changing now. Suppliers are adjusting prices that were artificially kept low during the COVID-19 pandemic. Additionally, with inflation, higher hidden taxation, and persistently high interest rates, SMB retailers are facing increased costs, which is causing erosion of their profits.

Why Margins Matter

A margin is the difference between your cost and selling price. Any drop will have an impact on your profitability.

How to Review and Track Margins Effectively

Establishing a Proactive Margin Review Process

Margin protection starts with how often and how thoroughly you review your numbers. Relying solely on ad-hoc checks from time to time is a dangerous approach. With a POS system, it is easy and quick to do so. Why not schedule a monthly margin review for your shop? This will allow you to identify pressures early and take corrective action before profits slip away.

Leveraging POS Technology for Margin Protection

Modern POS systems can simplify margin management. For example, reports like “Quantity On Hand and Price Check” display your margins in a clear, list format. Use this report to identify low-margin items quickly. Then ask yourself why they’re so low.

I find it better to do it department by department.

Regularly reviewing this report empowers you to take timely action and protect your profit margins.

Ready to Protect Your Retail Profit Margin?

First, you must look into your business and run the numbers.

Now I suggest you run "Quantity On Hand and Price Check" report.

This shows your margins. It makes it quicker to check as it is in a list.

Benchmarking: Stay Competitive

Don’t operate in isolation. Checking your figures against those of similar retailers in your area can also be a helpful exercise. If your prices deviate significantly, you need to investigate. A quick walk around the area, plus a study on the internet, can tell you what you need to know.

Action Steps for Retailers

Achieving sustained profitability in retail requires a continuous commitment to margin management. Here’s how to get started:

• Set a regular monthly review schedule
• Leverage your POS technology, have you set up automatic margin tracking
• Review pricing and promotions
• Compare your performance to industry standards.

Improving your profit margins was good, but it's necessary now.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with 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 have received a few reports of another issue with Linky EFTPOS from people who have installed the latest Microsoft update. We are not sure, as we cannot find any official Microsoft or Linkly statement to confirm the link. 

What we can say is that some report to us that their Linkly-integrated EFTPOS terminals displayed "Pinpad Offline" and some that the Linkly client application is not appearing in the Windows system tray. We think it's a communication error between Linkly and their EFTPOS terminal. 

What I did was to uninstall the latest Microsoft update and then turn off both the computer and the EFTPOS terminal. Then, I started it up again. What I suggest is that if you are experiencing Linkly EFTPOS issues after a Windows update, turn off the computer and the EFTPOS terminal, then turn them on again. If this does not work, please get in touch with Linkly Support or your bank’s merchant services.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with 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.

Maximising retail sales requires planning around key retail dates today. Use this retail calendar to prepare for the major sales events in 2025.

Why a Retail Calendar Matters

By mapping out the year’s key sales events and niche holidays, you can:

-Anticipate consumer demand
-Allocate resources efficiently
-Time your marketing to reach customers when they’re most likely to buy these products

Use your POS system in conjunction with this calendar to facilitate historical data analysis, enabling you to make informed purchasing decisions and focus on products that sell well in your shop.

-Analyse last year’s sales data for each event and adjust your approach accordingly
-Automate reminders for stock ordering and campaign launches
-Measure after the return you made for each event

Here are the most critical retail dates for the remainder of 2025.

Retail calendar 2025

Below are the most significant retail events from July to December 2025. Mark these dates in your calendar.

July 2025 (Now)

-Stocktake sales ‍

September 2025

September 7: Father’s Day

-AFL Final season

October 2025

October 31: Halloween

November 2025

Tip of the month: Today, Australians spent more in December than in November, with massive amounts over Black Friday week. Tap into this demand with curated gift guides that encourage product discovery, followed by coveted limited-time deals.

November 4: Melbourne Cup Day

-Christmas season begins

November 29: Black Friday

December 2025

-Christmas season continues

December 24: Christmas Eve

December 25: Christmas Day

December 26: Boxing Day

December 31: New Year’s Eve

Remember, every shop will have unique sales opportunities beyond these events. Review your own sales data to identify additional key dates relevant to your niche. Some I think are worth many considering are:

eg Fashion shops - Winter sales (now)

October 19: National Gardening Week

Click here for more ideas 

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with 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.

Australian retailers are today exploring AI-powered POS analysis to gain deeper insights from their POS system reports. While AI offers substantial potential, it is crucial to understand its current limitations, especially when integrating it with POS system analytics in today's business.

What I would like to discuss is the issue of utilising the information in your POS System to drive an AI analysis. It is something that my company was one of the first to explore with OpenAI, the creators of what is now ChatGPT, years ago.

Data Quality and System Integration

Like any advice, the effectiveness of AI-driven POS analytics depends on the quality and completeness of the information we give it. If the information you feed it has errors, then I doubt analysis will help. That is why a manual review of the information you are feeding the AI is so critical. It is also why many are saying that now is the best time to utilise AI to review your stock, as the information in your POS System has been verified during the stocktake you have just completed.

These data challenges lay the groundwork for further issues, such as the risk of AI hallucinations, which we explore next.

Hallucinations

Hallucinations are not just an AI problem. In human conversation, topics often drift, leading to another topic. AI can behave similarly, sometimes producing nonsensical or, worse, convincing but incorrect results.

The significant issue here, at worst, is that the AI has said something so convincing that it's difficult to dispute its accuracy. Our clients have sent me such examples.

In contrast, programmers audit traditional POS system reports, which are based directly on actual transaction data and clients' stated needs. It provides you with focused information on the real needs of the business and greater reliability for informed business decisions. An example is a report generated by an AI system, Perlexity, that incorrectly identified a non-existent sales trend a newsagent sent me. If the newsagent had listened to it, they would have ordered a lot of unsellable stock.

Local Market Dynamics

AI systems often lack a sophisticated understanding of local market conditions, regulatory requirements, and cultural factors that significantly impact Australian retail operations. This limitation becomes evident when AI tools recommend a strategy to one of our clients based on an American holiday or season that is of minor significance in Australia. A classic example, which I recently discussed here, was a gardening tip from the US, where the seasons are reversed. An excellent tip for gardening in spring is of little use to an Australian retailer in autumn. 

When you ask an AI for advice, you have, like any other advisor, to tell it of what we call localisation issues that your shop faces. For example, say you are a pet supplier. There is a significant difference in the advice someone would give you if you are a large retailer with a small department for pet supplies or a small business exclusive pet retailer. Before asking for advice, specify as much as possible; for example, it's better to say, rather than

"What can you tell me I should do based on this information?"

say

"My Pet Shop is in the Dingley Village Shopping Centre, which is a well-established neighbourhood retail hub anchored by Woolworths, which generates steady daily foot traffic and creates strong cross-shopping opportunities for specialty stores like my pet shop. The centre's tenant mix is focused on essential services, making it resilient to economic fluctuations and attractive to the local community, which is characterised by above-average incomes and a family-oriented demographic. While Woolworths' in-store pet section, internet and nearby major pet chains present direct competition, the centre's strong local customer base and consistent visitor flow provide a solid foundation for us.

Now, what can you tell me based on the information from my POS System that I am giving you now?"

I find using AI to create such a summary works well. Once you have it store this description as you will often need it once you start analysing with AI. Many AIs allow you to make a character for your shop. I will discuss this more in another post.

The information you get now is much more relevant.

Transparency of the advice

Due to the way AI operates, it's often impossible to follow the reasoning. We call it a "Black Box". We know what we put in, and we see what we get out, but how does it go from in to out? Most of us, if we do not understand the logic, are reluctant to use it, and with the hallucination issue, it may be dangerous to follow its advice.

Historical Patterns

What I love about AI is that it's terrific at finding incredible patterns in your information. Still, it can struggle to adapt quickly to sudden market changes or unprecedented events that it is not aware of. Retail markets often change rapidly, requiring immediate strategic adjustments.

What you need to do here is tell the AI when this happens.

"redo as what you should have taken into account ....blaa blaa blaa........".

Like any advisor, you often need to give them another go if they get it wrong.

AI often requires multiple attempts to achieve satisfactory results.

Technical Implementation and Operational Requirements

Successfully utilising AI analytics for POS data requires some practice to build up your technical expertise. It's not hard, but like most things, it does take some practice. The more you use it, the better results you will get and the more you will get out of it.

Please, based on my experience, the most reliable way to feed your POS data into an AI tool is by exporting reports as Excel or CSV files. Excel is better, but some AIs do not like it. If so, use CSV. Both provide a standardised format that the AI is designed to process. When you supply your information, do not simply import your existing reports to get quality insights. The less you ask the AI to guess, the better.

Creating an Excel or CSV file is simple in our POS System. From any report, press the red arrow.

However, most POS Systems can export your reports into Excel or CSV.

Use Excel or CSV, not the report, which often invites trouble. 

Actionable information

Having extensive volumes of information is rarely much use; what we need are actionable insights. Many experience that when this happens, paralysis reduces decision-making efficiency rather than enhancing it. What I suggest you do is, if the AI does this, ask it, "What actionable steps that directly support our business objectives and operational improvements can you make from this?"

The Essential Role of Your Expertise

For AI today, human judgment is essential. It's your business, your livelihood and ultimately your decision. It's crucial to double-check before making business decisions.

How to use AI for Retail

The key to successful AI implementation lies in viewing its limitations as opportunities for strategic improvement. Retailers who set realistic expectations and thoroughly validate can gain advantages while ensuring operational reliability.

AI is brilliant, but you need to be thinking too.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with 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.

How to Calculate Inventory Shrinkage and Damaged Goods: 2025 Guide for Australian Retailers

Inventory shrinkage and damaged goods continue to rapidly erode profitability for Australian retailers, making retail loss prevention an increasingly important priority. With your latest stocktake complete, now is the ideal time to calculate these critical rates, as you will never have better figures. Good inventory control transforms a retail business.

Inventory Shrinkage and Damaged Goods

Let's define what we are talking about first. Inventory shrinkage refers to the loss of stock that occurs when actual inventory levels are lower than what your computer records indicate, which we refer to as the perpetual stock. Common causes of losses include theft, administrative errors, and other similar issues.

Goods that, due to damage, cannot be sold at full price are classified as damaged goods.

Calculating your Inventory Shrinkage rate

To accurately determine your inventory shrinkage rate, follow this process that leverages your POS system's inventory management tools.

Begin by establishing your perpetual stock value. This figure represents your theoretical inventory level, as reported by your POS software, before any physical stocktake.

Now you have the physical stocktake that you have just done.

In our POS system, we have a comparison report that automatically provides the figures for losses. Focus exclusively on products physically carried in your store, excluding non-stock sales such as lottery tickets or service revenue, to ensure the calculation accurately reflects inventory movement. We can do something similar with your lotto system, as lotto does have a report of what you should have sold. I will address this in a separate post.

The shrinkage formula is as follows:

=(Perpetual Stock Value) - (Physically Counted Inventory Value)/(Perpetual Stock Value) x 100%

Example

A retailer with a perpetual stock value of $100,000 in a department finds, after the stocktake, that their stock is $98,500, and sales of stock products total $70,000 for the period. The shrinkage rate would be:

=(100,000 - 98,500)/100,000 x 100 = 1.5%

This calculation shows that 1.5% of the stock was lost to shrinkage. That rate, unfortunately, is not uncommon. Some of you may be surprised by how high your figures are. Shrinkage rates have increased this year. They increased the previous year as well.

Industry Benchmark for 2025

The retail shrinkage rate for Australian retailers is about 1.4%.

Every 1% shrinkage causes about a 3.5% drop in profit.

A rate above 2% highlights the need for immediate investigation and remedial action.

Calculating Damaged Goods

The calculation for damaged goods is as follows:

=(Damage Stock Value)/(Cost of Stock Product) x 100%

We refer to this as the damage rate, another significant contributor to inventory loss. These damaged goods cannot be sold at full price.

Looking at them, we can often determine the cause.

Inventory Management and Loss Prevention Strategies

Effective inventory management is crucial for minimising both shrinkage and damaged goods. Analysing losses by category, department, or location allows you to pinpoint where problems are occurring. Recording the reasons for missing or damaged items—such as theft, receiving errors, or poor storage—provides actionable insights for process improvement.

With a modern POS inventory management system, you at least have real-time tracking of the problem.

Conclusion

After determining the overall measurements of your inventory shrinkage and damaged goods, you may want to dive deeper into specific departments by performing this analysis across departments, as well as consider doing it by key items and locations. Using this, you can pinpoint areas of concern. 

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with 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 stocktake sale is a promotional event designed to move excess, slow-moving, or outdated inventory directly after your annual stocktake. Retailers throughout Australia use these sales to convert stagnant stock into cash. You will now notice increased promotional activity, both in-store and online, as businesses compete to offer attractive deals. Hopefully, now you are or have completed your annual stocktake. While the paperwork may be nearly finished, this period presents a unique opportunity: to make a stocktake sale. It can help you clear out surplus stock and get some cash into the business.

A stocktake sale is not merely a seasonal tradition; it is a practical, results-oriented strategy that delivers proven and measurable business benefits.

The Strategic Timing of a Stocktake Sale

Launching a stocktake sale immediately after your inventory review is a highly effective approach for several reasons.

First, consumer expectations are heightened at this time of year. Shoppers are now seeking bargains. They are driven by widespread advertising that highlights stocktake sales offering significant discounts. By aligning your sale with this demand, you can drive increased foot traffic and capitalise on consumers’ readiness to spend.

Second, your inventory data is at its most accurate immediately following a stocktake. You have precise information on which products are underperforming, nearing expiry, or simply occupying valuable space. Now you can make the best decisions with the best information.

Third, clearing out slow-moving stock frees up capital and shelf space, giving you a significant boost to cash flow when we all need it to pay the bills coming now for next year.

Tips

A good stocktake sale should be short and limited to create a sense of urgency among customers. Limiting the duration and availability of your stocktake sale can make it more appealing and exclusive to customers. Your regular customers may become suspicious if you go on for too long.

Promotion is inexpensive and easy to accomplish. All you need is a sign on the window and a stand with the goods in your shop. You don’t need to spend a lot of money or time promoting your stocktake sale. Use simple and effective methods. If you have a social media account for your business, you can use it for free to promote your store.

Conclusion

Making a stocktake sale is excellent to clear old stock, boost sales, and promote your business.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. 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.

AI art generators have revolutionised how retail shops create professional, eye-catching marketing images. Today, any retailer with no graphic design experience can design custom visuals for free. Whether you want to update pamphlets, POS displays, or social media with unique, on-brand images, AI art offers a practical, accessible solution as creating professional, eye-catching pictures for your retail shop’s marketing can now be done for free, as today’s AI art generators make it possible for small business owners to design custom visuals with no graphic design background required. If you’re looking to refresh your pamphlets, POS displays, or social media with unique, on-brand images, AI art is a practical solution you can start using straight away.

Recently, I needed images for a POS Solutions pamphlet. Despite having no artistic background, I was able to create several professional visuals in minutes. See above. I liked them all, so I will leave it to our marketing guy, Garth, to decide which one, if any, to use.

Now I’ll share my process and tips to help you do the same for your business.

To get started, you need two things: an art prompt and an AI art generator. The generator takes your written description, known as a prompt, and transforms it into a high-quality image. Best of all, you can use these images commercially for free. For retailers, this means you can easily create pictures that match your shop’s personality and brand.

I decided on Flux, which is free, but it requires some technical skill to set up, and it also requires a high-end computer. But there are many others now free that can run on any computer. I suggest looking at ChatGPT and Grok, both of which make lovely images for free.

It is easy to do, write your image prompt, which is 

Draw "what you want to have an image of"

and wait.

Here are some image prompts that I use for you. These are for you to experiment with 

**Bauhaus Functionalism**    An ultra-realistic image re-envisioning the POS Solutions logo through a stark Bauhaus lens. The logo is constructed from fundamental geometric shapes using primary colored glass and polished chrome. The 'P' is a red circle and rectangle, the 'O' a yellow circle, and the 'S' a series of blue curves, all rendered in smooth, solid-colored glass. The "Solutions" text is built from thin chrome bars. The sculpture is placed within a minimalist architectural space with bare concrete walls and a simple grid window. The lighting is stark, functional, and direct, casting hard-edged shadows, reflecting the movement's emphasis on form, function, and industrial modernism.
 

**Gothic Obsidian**    An ultra-realistic, high-resolution image of the POS Solutions logo as a monolithic sculpture carved from polished black obsidian and smoky quartz. The acronym "POS" features bold, heavy forms, with the stylized 'S' elegantly overlapping the 'O' in a fluid, obsidian curve. Above it, two italicized bars are chiseled from the same dark crystal. To the right, "Solutions" is etched in a finer, translucent smoky quartz, while the "Smart software" tagline is subtly engraved in matte grey slate. The entire sculpture rests on a cold stone floor within a vast, dark cathedral interior. Dramatic, high-contrast chiaroscuro lighting, reminiscent of a Caravaggio painting, streams from a distant stained-glass rose window, casting long, colorful shadows and highlighting the sharp, reflective edges of the obsidian. The mood is somber, epic, and reverent, blending corporate form with ancient gravitas.

Render the POS Solutions logo as an ultra-detailed, hyper-realistic glass sculpture, with "POS" crafted from deep navy blue transparent crystal, each letter bold and heavy. The stylized is enlarged and curves gracefully over the its surface polished to a high gloss, refracting light in intricate, gem-like patterns. Above the  two thick, italicized bars, also in navy crystal, are sharply beveled and highly reflective. To the right, "Solutions" is depicted in a thinner, elegant, sans-serif font in translucent navy crystal, while beneath it, "Smart software" is rendered in a soft matte grey crystal. The logo is set against a softly blended pastel background, with gradients of blue and pink, and is surrounded by vibrant, prismatic shadows and highlights. Studio lighting accentuates the reflective and refractive qualities of the crystal, creating an atmosphere that is elegant, dreamy, and technologically sophisticated.
 

Modify each by removing POS Solutions and replacing it with your shop name, the brand you are promoting, etc. 

An exercise I find helpful is creating something you like, then asking the AI, 'Here is my prompt, make it better,' and seeing what it comes up with. If it is not what you want tell it so and ask it to redo. 

Once you’ve created your images, use them across your marketing materials, eg pamphlets, social media, website banners, or in-store signage. Consistent, original and high-quality visuals help your shop look professional, making a real difference in how customers perceive your business. Google ranks them well, as each image is original. Google likes original material.  According to Shopify, retailers using original images see up to 30% higher engagement rates.

Try out the example prompts above, and see how easy it is to create stunning visuals for your retail business. 

If it all seems a bit too hard, please let me know, and I'll create some images for you. I have to have something to do with my retirement.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. 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.

There are few key differences and notable changes for EOFY 2024/5 to 2025/6

As such this is still valid for your EOFY accounting.

The only major change for SMB retails is that you need to adjust the Superannuation Guarantee (SG) rate as it rises from 11.5% in 2024/25 to 12% in 2025/26. This is the final step in the legislated SG increases, so you must update payroll systems and budgets accordingly.

You must act now if you want to use the Instant Asset Write-Off for this year's tax return. The $20,000 threshold for eligible businesses (with less than $10 million aggregated turnover) only applies to assets first used or installed ready for use by 30 June 2025. Purchases after this date may be subject to different rules or thresholds.

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.

If you are like me and like to work while listening to interesting discussions, I would like to recommend the NAB Morning Call podcast. It's an Australian business podcast. The podcast is a daily 15-minute business podcast produced by National Australia Bank that delivers market insights specifically tailored for Australian business owners. The NAB bank has clearly put a lot of effort into producing it.

The podcast's strength lies in its real-world examples and data-driven discussions that directly impact business operations.

Memorable Episodes Worth Your Time

Some I found quite memorable, for example, what happened when the bank discovered a man about to transfer $500,000 to a scammer in China. He planned to send the money to his online fiancée, someone he had never met in person despite corresponding for over a year. He was lonely, he meet someone nice online and what do you do, when you know its a fraud, what do you say to such a guy?

Beyond fraud prevention, the podcast tackles critical business survival topics. A standout episode featured 'Back from the brink: How to save a business in distress,' where Michael Fingland, CEO of Brisbane-based turnaround specialists Vantage Performance, discusses what a company can do in the 11th hour to avoid being shut down. 

Another one I liked was on what retail customers are now buying in shops. I liked that they had data from people's credit cards, so they knew exactly what people were buying and what their analysts thought the public was going. 

Why NAB Morning Call Stands Out

If you are interested in this stuff, I think you will find it helpful (actionable) for SMB owners with SME business advice.

The podcast maintains high production values and has received consistently positive listener reviews, with ratings of 4.8-5.0 stars on Apple Podcasts. 

For SMB owners like myself who want to stay informed about economic developments that could impact their operations, the NAB Morning Call provides an efficient and authoritative source of daily market intelligence. 

Format and Accessibility

It is published daily at around 7 a.m. AEST is available on weekdays and most major platforms, including Apple Podcasts, Spotify, and Google Podcasts.

You can also get it here  if you are not set up for Podcasts.

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 formally announced my retirement publicly yesterday. After 50 years in the workforce, I think it's enough. This decision comes after careful consideration. It is indeed a moment that makes you feel much. I will continue as a stakeholder but no longer as a director. Forty years as a director is enough. 

As the editor and founder of this point-of-sale (POS) industry blog, I feel immense pride and gratitude for everything we have accomplished since launching this blog in 2006. It has become a leading resource for retailers, POS professionals, and the industry. Our readership now has over 8,200 monthly reads and over 6,400 readers. These figures are not just statistics. They represent a vibrant network of business owners, managers, and technology enthusiasts who have shaped the direction and relevance of our content.

Celebrating its public achievements

Today, this blog’s domain authority (DR) has reached an impressive 70, a level typically reserved for major brands and industry leaders. This places us among the most authoritative sites in our market space, reinforcing our position as a dominant voice in the POS industry.

Recently, Feedspot, an organisation with over 4 million registered users worldwide and over 2 million blog visits per month, recognised us as the #2 point of sale blog worldwide and the top POS Software blog in Australia in its prestigious awards, further validating the impact and quality of our work. These milestones reflect the worth that so many readers have placed on us.

What Sets Our Content Apart

At the core of our success is a commitment to providing relevant, original information. This information was selected to help retailers make informed business decisions. We have always focused on practical solutions, valuable insights, and actionable strategies tailored to the unique challenges faced by SMB and large retailers. For example, I know a senior executive at Safeway reads it, too. This approach has enabled our readers to save money by optimising their inventory, streamlining operations, and enhancing customer experiences.

The Blog’s Future

The POS management team will now determine the direction of this blog. I have provided my recommendations. While I will remain available to support the process, my involvement will be reduced as I want to keep blogging. Each article is a lot of work, requiring over three hours of research, writing, and editing; some, like the AI research ones, took much longer. I doubt whether any POS Software blog could have done something as advanced as these studies.

We made this investment willingly, knowing its positive impact on our readers and the broader retail community.

Personal Reflections and Gratitude

Reflecting on this journey, I am deeply grateful for the feedback and trust shown by our readers over the years, both here and on Facebook, LinkedIn, etc. It has been a privilege to serve you, readers, and it was so pleasing to witness this blog's growth often through the innovation of our POS Software. In truth, this growth was only possible because of our software lead in the market space. It's easier to blog new stuff when your software is the best.

Continuing the Legacy

Thank you for your ongoing support and for making this blog a cornerstone in the POS industry. I look forward to seeing how this platform continues to empower and inform retailers.

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.

Electricity costs represent significant operational expenses for Australian retailers. Recent price increases, 20% to 30% across various regions, are bringing a shocker, and it's clear that more increases are coming. So many retailers are now actively seeking better deals to protect their bottom line. You need a strategic approach to avoid costly mistakes.

The Reality of Energy Agent Limitations

The electricity market is saturated with agents and brokers promising substantial savings for retailers. However, my recent experience revealed significant flaws in this approach here, The main reason I approached them was an industrial group, I was associated with recommended them. The prices were not better; they were higher. Yet the agent presented her figures as a cheaper rate. This experience highlights a fundamental issue: agents operate on commission structures that may not align with your best interests.

Government Comparison Website Inadequacies

While well-intentioned, Government energy comparison websites present challenges for retailers seeking accurate market information. My investigation into the Victorian Energy Compare website here. Significant discrepancies between displayed rates and actual provider quotes were revealed which when I contacted the provider directly, I found that they offered rates substantially better than those shown on the government platform.

This experience demonstrates that government comparison sites may not reflect real-time market conditions or the full range of available offers. The platforms work with standardised data that doesn't capture the dynamic nature of energy pricing or the flexibility providers have in direct customer negotiations.

Strategic Energy Approach

I am sorry, there is no way out of doing your research. An approach that works for me is to

1) Use government comparison sites as baseline information, but understand their limitations. My comparison website is here.

2) Select the best three offers and research their customer online satisfaction ratings. The reviews are readily available through Google. Narrow in on the ones that look good for your shortlist. I was left with two.

3) With the information, call your existing provider if you are happy with them, and those on your shortlist to see what they can do. Present your research findings professionally, highlighting competitive offers. I stayed with my provider even though they were slightly dearer on the new plan they offered, and I was happy with them

Conclusion

Rising electricity costs present ongoing challenges for Australian retailers, and we all know more are coming. Strategic energy procurement can deliver meaningful cost reductions.

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.

How much to offer on your loyalty program points is a big decision. Understanding whether your point structure remains competitive whilst maximising customer engagement through strategic promotions directly impacts your program's profitability. In 2025, retailers must carefully design loyalty programs to maintain customer retention and growth, as we can see, brand loyalty is declining. While loyalty programs offer benefits like increased revenue and customer lifetime value, overly generous rewards will impact profit margins. The reality is that a loyalty program costs about 1% of turnover to operate. So, most of my clients offer too much to make it profitable.

Most successful Australian loyalty programs use a point value between 0.3 and 0.7 cents per point. It positions a business within a competitive framework that balances customer satisfaction with sustainable profit margins. Here are some I found doing a net search:

House VIP Rewards maintains a straightforward one-point-per-dollar-spent structure. Members must accumulate 500 points within 12 months to unlock a $20 reward, which translates to a 4% return rate once the threshold is reached.

Woolworths Everyday Rewards provides at least one point per dollar spent across their network, including BIG W, BWS, Ampol, Origin, and Marley Spoon. Members can redeem 2,000 points for a $10 off qualifying purchases, establishing a 0.5 cent per point value.

VIP point work as studies show that perceived value often matters more than the actual value. Thirty thousand flyby points sound more than $150, and this half-cent per point value observed in programs like Flybys is the benchmark.

Customers perceive points as valuable currency when earned through regular purchases. This perception has been found to drive repeat visits as customers return, increasing visit frequency and lifetime value.

Delayed Gratification Benefits

Unlike immediate discounts, points encourage future visits and sustained engagement. Yet not all customers redeem their accumulated points, creating breakage, which are unredeemed points. You can consider these a failure, as what you have does not interest your potential customers or a bonus profit. What does work here often is an email to say that your customer has XXX VIP points that will expire on such a date.

Strategic Implementation of Double Points Promotions

Double-point sales are one of the most effective tools in a loyalty program's arsenal. These promotions create immediate perceived value while maintaining control over your reward structure and profit margins, as they instantly make exceptional value sense for customers. Please promote during slower business periods to boost sales when needed; they are great for flash sales, too. Many successful retailers utilise such campaigns during post-holiday periods and slow periods.

Urgency

Time-limiting the points generates urgency without permanently devaluing your regular offerings. I strongly recommend using your POS software on such a day, say, the EOF year, when all points get zeroed.

Targeted Customer

Rather than offering double points universally, consider targeting specific customer segments, e.g. customers who haven't visited within 60 days.

Also, you can try specific products or categories.

Performance Measurement KPIs

Always track your VIP sales to see how they went. I like to look at participation numbers, average transaction value and new member acquisition.

Strategic Business Outcomes

With a half-cent point value, you're positioning your business competitively within the Australian market.

These work better: 

Substantial welcome bonuses: 1000 points to join your VIP club sounds better than $5

A VIP program with a double point sale offering 0.5 cent per VIP point compared to a 1-cent VIP point.

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, it is said that integrating Artificial Intelligence (AI) into financial reporting processes has enhanced the quality of financial reports by significantly improving accuracy, timeliness, transparency, and compliance and has much promise for SMB Businesses that cannot afford a full-time accountant. However, when we tested AI on financial reports here, we found many errors. Others who followed our advice and duplicated what we did told us it was beneficial, but they picked up several errors.

AI-powered financial report generators rapidly transform how many Australian retailers approach accounting, reporting, and business analysis. As these technologies have become accessible and affordable, many SMB Business owners are increasingly looking into them to cut costs and give them better and more intelligent decision-making. However, the critical question remains: How accurate and reliable are these AI financial reporting tools in real-world retail scenarios? This review thoroughly assesses different AI models, drawing on our independent research and real-world testing to help you make informed decisions for your business.

The Importance of Reliable Financial Reporting in Retail

Financial reporting is a compliance requirement for many retailers, but should be the backbone of sound business management. That is what it is designed to do. Financial reports can help with inventory planning, cash flow forecasting, and business decisions. However, even minor errors can lead to problems. The quality of the information here is critical.

In-Depth Analysis: How Each AI Financial Report Generator Performs

Now, we fed the six models listed below with unaudited reports of two years of financial statements and asked them to assess the company's financial position. A discussion of the test done is here. We will soon test using the reports in our POS to integrate into the financial reports. 

Here, what we are trying to assess is

How well did each AI do at pointing out errors

This is important as if you can correct the figures before giving them to the accountant, you can save them a lot of work. Save them a few hours that could save you a thousand dollars off your accounting bill. AI error reduction is a big plus.

The errors in the AI

The biggest problem with AI today is that it will produce errors. Most of these errors are classed as hallucinations; a better description is going off track. Some AI promoters claim that their system does not suffer from this, but I do not believe them. Humans make mistakes; AI makes mistakes. Neither humans nor AI are infallible. With today's technology, human oversight remains essential.

Grok

From this perspective, Grok emerged as a leader in AI financial report generators. After reviewing the figures, we gave the data a precision rate of 97%. Grok was particularly effective at identifying business risks and discrepancies, such as figure mismatches and unusual reporting patterns. However, it did not always flag significant structural errors, such as negative liabilities in the books and misclassifying a loan. For accuracy, Grok was the best.

Google’s AI

Google’s AI tools are widely known and used for financial reporting. I think you will find it the easiest to use. Its accuracy was good; we gave it a 95% data precision rate. I was not too happy with some of its tax advice. We liked that it explicitly called out odd liability presentations and discrepancies. Maybe it could have beaten Grok if we had corrected that, fed it back in, and redid the report.

Claude

Claude, we gave it a 93% data precision rate. Claude missed some critical errors in liabilities and equity and did not flag many errors, all of which could mislead SMB business owners.

ChatGPT

ChatGPT was unexpected, as we had read an academic research paper showing it was better than human analysts in financial statement analysis. That may be true, but in our tests, it scored 85% in data precision. Interesting for something highly thought of after it made some structural accounting errors. It did not flag anything as an error.

Qwen

Qwen is designed for enterprise applications, not SMB businesses, and we found it had an 83% data precision. It lacked precision in ratio calculations and left an incomplete reconciliation between the trial balance and profit and loss statements. We are not sure if it is programmed well with Australian accounting standards.

DeepSeek

DeepSeek is a favourite now as it's so cheap. It got 80% data precision. I suppose you pay for what you get here.

Common Pitfalls and What Retailers Should Watch For

Across all models, the most common errors flagged included data inconsistencies, business risks like revenue decline, and fundamental reconciliation issues. However, even the top performers tended to miss or underplay critical structural errors such as negative liability balances, misclassified loans, and negative opening equity. These are significant issues for retailers, as they can lead to unreliable reports and poor decision-making if not addressed.

Conclusion: Choosing the Right AI Financial Report Generator for Your Retail Business

The comparative analysis shows that while AI financial report generators are advancing rapidly, none are flawless. Grok and Google’s AI currently offer the highest accuracy for retail financial reporting, but even these leaders require human oversight to catch critical errors. Still, by alerting the owner to mistakes in their books, both Grok and Google AI could have saved about a thousand dollars in accounting costs.

Best Practices for SMB Retailers Using AI Financial Tools

I recommend that SMB retailers conduct quarterly financial analyses using these AI tools, export data from their accounting software (e.g., MYOB and QuickBooks), and review AI-generated reports for trends, risks, and recommendations.

We suggest combining outputs from multiple AI models (as we did) and merging their reports for a more robust analysis.

Learn how to review these AI outputs.

I am sure doing this can provide you with timely business insights.

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.

Cash payments in Australia are disappearing faster than most retailers realise, with usage plummeting to just 13% of transactions by 2024. Cash usage is rapidly declining and will probably not be viable for many by 2030. We are now looking at a cashless society.

The shift away from cash represents both a challenge and an opportunity for Australian retailers. The question isn't whether this change will happen but whether your business will be prepared when it does.

Recently, I attended a major conference that perfectly captured where Australia is heading with payment methods. At this two-day event with hundreds of delegates and speakers from both internationally and in Australia, I witnessed something that would have been unthinkable a while ago. On the first day, I went to pay for lunch with cash and had the exact amount ready. The cashier looked genuinely surprised and told me I was the only person to pay with money all day. Everyone else had paid with a card.

The second day was even more telling. I had a twenty-dollar note and needed change, but the cashier couldn't process my payment because she had no change. The organisers hadn't planned for cash transactions. It was a mainstream event, yet cash had become so rare that my usage caught everyone off guard.

This experience isn't unique anymore. It's happening across Australia, signalling a fundamental shift that every retailer needs to understand and prepare for the cashless society.

The Data Reveals the Scope of Change

The Reserve Bank of Australia's data paints a stark picture of cash's decline in our economy. Cash payments have plummeted from around 70% of all consumer transactions in 2007 to just 13% in 2022, and current data show about 10%.

The Australian Banking Association has projected that by 2030, cash will represent just 4% of all transactions. To put this in perspective, cash usage fell by over two-thirds between 2014 and 2024. It isn't just about younger generations preferring digital payments; the shift is across all demographics.

Infrastructure Changes Drive Payment Evolution

The conference experience I shared highlights a critical issue beyond consumer preference: the infrastructure supporting cash transactions is actively breaking down. Businesses are no longer equipped to handle cash because they don't expect it.

Bank branch closures have accelerated dramatically across Australia. The number of ATMs per 100,000 people has dropped by more than 15% between 2012 and 2021. If this decline continues at the current rate, the last will be switched off by mid-century. ATM withdrawals have crashed from 75 million per month in 2009 to just 28 million today.

It means your business's support system for cash transactions is actively disappearing. Even if you want to accept cash, your customers might struggle to access it, and you will find it increasingly challenging to bank deposits or obtain change for your tills.

The situation with Armguard, Australia's most significant cash-in-transit business, facing financial troubles earlier this year, demonstrates how precarious the cash infrastructure has become. When the company that moved most of Australia's cash around nearly went under, it exposed how dependent our remaining cash economy was on increasingly fragile systems.

Regional Considerations Present Unique Challenges

If you're operating in regional or remote Australia, your situation differs from that of retailers in significant cities. Cash usage remains higher in regional areas due to older demographics and less reliable digital infrastructure.

However, bank branches and ATMs are also disappearing fastest in regional areas. It creates a problem because regions where cash is needed most are losing the infrastructure to support it more quickly. Some communities are becoming genuinely vulnerable to further reductions in cash services.

Regional retailers might experience a slower transition from cash, but the infrastructure challenges are more severe. You might be one of the few businesses still accepting cash simply because your customer base demands it, while struggling to manage the practical aspects of cash handling.

Government Mandates Face Market Reality

You've probably heard about the government's plans to mandate cash acceptance for essential items like groceries and fuel starting from January 1, 2026. On paper, this sounds like a lifeline for cash. The reality proves more complex.

The proposed mandate will apply to businesses selling essential goods and services such as food, fuel, and basic healthcare. Still, there's already discussion about exempting small businesses with an annual turnover of under $10 million. This exemption could cover many of the retailers reading this article.

The critical question remains: even if the government mandates cash acceptance, can it mandate the infrastructure to support it? Legislation can force a supermarket to accept your twenty-dollar note, but it cannot force banks, ATMs or cash transport companies to remain profitable.

The energy for serious legislative action has waned in Australia's political landscape since the failure of the recent cash-out day, which was seen as an informal vote on cash's future. Also, the government likely views the end of the cash economy favourably for many reasons: it's cheaper, easier to track transactions for tax purposes, and reduces the underground economy.

Business Implications Demand you make a Strategic Response

As a retailer, you're now in the middle of this transition.

The costs of handling cash are substantial and often underestimated. You need floats, extra insurance, time for counting and banking, secure storage, and regular trips to deposit some money. When businesses struggled during COVID-19, these inefficiencies became impossible to ignore. Many retailers discovered they could eliminate significant overhead by going cashless.

However, there's a flip side to consider. Recent surveys show that whilst digital payments are rising, Australian shoppers still want the option to use cash. More concerning for your bottom line, in-store debit and credit card fees are now the most hated fees among consumers, ranking even above ATM fees. The government's response to this pressure seems frightening: get rid of debit card fees and make retailers absorb these fees.

Technology Solutions Provide Competitive Advantage

Your point-of-sale systems have evolved to handle this transition seamlessly. Today's POS technology can efficiently manage multiple payment types, including various digital wallets and contactless options. It positions your business for the future while maintaining current capabilities.

Use its reports to determine your business's cash handling costs, including salaries, time, insurance, banking fees, and security measures. When properly calculated, you might be surprised at the real expense. In my experience, many retailers discover that the hidden cash handling costs shock them.

Strategic Timeline for Australian Retailers

Based on current trends and infrastructure changes, here's my assessment of the realistic timeline facing Australian businesses:

2025-2026 Period

Cash usage continues to decline.

Soon, large companies will be mandated to accept it, and many small businesses will receive exemptions.

2027-2029 Phase

Cash usage continues to decline.

Cash access is difficult in many areas as more banks and ATMs are closing. Businesses find compliance with cash mandates growing in cost and time.

2030 Transition Point

We have a cashless society.

Cash will reach the projected 4% of transactions. At this point, cash will move from a mainstream payment method to a niche service, similar to how cheques function today, still technically available but rarely used.

Beyond 2030

Cash persists only for emergencies and specific cases; mass acceptance effectively ends.

Practical Business Recommendations

We need to prepare strategically. Your approach should be measured and customer-focused. Most retailers I've talked to have told me they intend to keep cash going as long as their customers keep using it. I doubt it. As my experience at the conference shows, even though I wanted to use cash they could not accept it.

Assess Your Customer Demographics

If you serve predominantly older customers or operate in a regional area, you must maintain cash acceptance longer than urban retailers serving younger demographics.

Calculate Real Costs Accurately

Track your business's cash handling costs, including salaries, time, insurance, banking fees, security measures, and opportunity costs. One point often missed is that an electronic transaction is usually higher than cash, so keeping cash may cost you lost sales. Many retailers underestimate these expenses. Use your POS system's reporting capabilities to get precise data on transaction costs across different payment methods.

Communicate Payment Policies Clearly

Whatever payment methods you accept, ensure customers know before they reach the checkout. Clear signage not only prevents awkward situations and improves customer experience, but it's also often the law.

Conclusion

Your success in this transition depends on preparation, not resistance. By understanding the timeline, investing in appropriate technology, and developing a clear strategy, your business can thrive regardless of how payment preferences evolve.

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.

It ͏is lucky for us th͏at some states in Australi͏a celebrate it on different days so that we can switch people around. 

Although most of our clients are open today, often with reduced hours, we are still open for support. We know how important it is to keep your IT systems running smoothly and͏ securely, especially ͏during these challenging times.

If you ne͏ed any help with your busin͏ess IT needs, ͏please don't hesi͏tate to contact us. You can use our after-hour͏s ͏support line or email us; we will get ͏back to you as soon as possible.

We hope everyone is having͏ a safe and ha͏ppy long͏ weekend!

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.

Australia's end-of-financial-year (EOFY) sale is the second biggest retail event of the year. It will drive $10.5 billion in consumer spending.

Retailers must take advantage of this shopping surge and the clock is ticking. The EOFY sales have already began, so you have a narrow window to attract bargain-hungry consumers looking for bargains and tax-deductible purchases.

Why EOFY Sales Work: Four Key Drivers

Tax Refunds Create Spending Power

Many Australians anticipate tax refunds, providing extra disposable income during this period.

Accountants Drive Purchase Urgency

Accountants to maximise tax deductions often advise clients to make purchases NOW before June 30.

Instant Asset Write-Off Deadline Pressure

Businesses face the urgency to invest before this year's deadline expires.

End-of-Year Financial Pressures

Companies offer significant discounts to improve this year's financial figures. They also need to generate cash for EOFY expenses.

Research shows that 71% of Australians plan to shop during the 2025 EOFY sales, a significant jump from 38% in 2024. Cost-of-living pressures and a growing aversion to full-price purchases drive it.

Planning Your EOFY Sale

Here's how you can make the most of the 2025 EOFY sales season:

Inventory

Review your stock, focusing on items that have been sitting idle. These can be used as loss leaders to draw customers in. Deadstock drains your cash flow and consumes valuable shelf space, so the EOFY sales period allows you to convert this liability into revenue. Our POS software offers tools to help identify this old stock—check out our training video for guidance. I suggest working department by department to streamline the process.

Consult Your Suppliers

Reach out to suppliers for insights and promotional ideas. Many are budgeting for the year's end and offer deals to help them shift stock now rather than count it later.

Research Competitors

Analyse what other retailers are doing to increase their EOFY sales. Just looking can spark inspiration and help you differentiate your offerings.

Discounts

Instead of straight discounts, consider bundling slow-moving items with popular products to increase overall sales.

Crafting Your Strategy

Leverage the following tactics to stand out during the 2025 EOFY sales:

Internet sales

For the items available on the EOFY sales, it's often harder to buy online as a shopper needs to look at and assess the item. The ARA above notes a drop in online shopping intent (down 11 percentage points to 44% in 2025), so expect more shoppers to hit your stores this year.

Discounts

Use dead stock as loss leaders to entice customers. Simple displays of discounted items at the front of your store can drive foot traffic. With 26% of Australians (6.1 million people) planning to participate in these sales and 37% intending to spend more than last year, there's a clear appetite for bargains.

Business Section

Create a dedicated section in your store for business-related items that may be tax-deductible. Highlight these products as savvy business shoppers want to claim deductions on work-related purchases. Label this area clearly with signage to attract attention.

Promote Your Sale

Use in-store signage to build excitement and encourage immediate action.

Conclusion

The 2025 EOFY sales period offers an opportunity, with 71% more shoppers ready to spend. Start implementing these strategies today—review your dead stock, contact suppliers for promotional support, and create your business tax-deductible section. With only weeks until June 30, early action is now required. This is some basic, sample markdown.

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.