Nothing up front and no back up

Laurence Haring, who has three forecourts trading as Fuel 24 in the South West, (in Weston-super-Mare and Highbridge) is severely ticked off with Point Four. Two of his sites have the same HTEC Hydrapos till using Background2 software which he describes as "superb". The remaining site has Point Four which disappointingly has so far not paid out any of the promised guaranteed revenues from the sale of screen advertising since the big name advertisers have not been buying. But that isn’t Laurence’s beef at the moment.

He writes: "I won’t go into the details of my relationship with Point Four and the media deal that I signed in good faith in 2007; however, part of the deal was for a five year software support contract."

And this is the sticking point. Point Four told him he would be charged for the software update needed for the recent VAT change.

"Having discussed this at length with their support team, I was told that the aspect of a government legislation change does not form part of the software support contract!? I literally have had a gun put to my head by them saying that unless I pay up to £200 (depending on what time slot I want) for the amendment to be made, then the VAT change will not be done. For a time slot of January 1, 2 or 3, the cost was £200 + VAT and from Jan 4 onwards it was £100 + VAT, payable in advance.

"Every other store/petrol station I own has back office and support contracts with other software houses and every other one has advised us that the VAT change would be made as part of the software support fees."

When I last heard from Laurence he was in dialogue with the Federation of Small Businesses in an attempt to bring together all unsatisfied customers.

Footfall does not always mean profit

This one is anonymous, by request. Mr Anon writes: "The time has come to examine the benefits of footfall. Footfall is great, but only if those extra customers are adding profit to your bottom line.

"In my own business, this currently manifests itself in two ways, in the guise of Arval and Paypoint. Arval and Paypoint staff all seem to have been brainwashed with the footfall argument which, according to them, adds to your profitability.

"There is no point in giving nearly all your margin to Arval (and the bunkering companies) merely to keep your volume up. The important thing is that this customer buys something else that you do make a profit on. Sadly this is not always the case."

My correspondent doesn’t use Paypoint for e-top ups which, he says, means that he knows exactly what his returns are on bill payment. "I currently serve around 1,250 customers and take between £20,000 and £25,000 a week on Paypoint bill payments and my commission for this? Wait for it £90 to £110. Gross!

"Our figures indicate that only between 25% and 30% of Paypoint bill payment customers buy something else. The rest merely use us and shop elsewhere. The others may have come here anyway because we are convenient."

In order to accept Paypoint, he needs a phoneline costing £2.60 a week. He adds that he uses "the excellent RMIP (formally PRA) banking scheme with Nat West". Nonetheless this costs £15 per week for the cash paid in.

"I use the Post Office for cash collections. The extra Paypoint cash I take means an extra high-value collection each week. Cost £25.

"It takes a member of staff an extra half an hour a day to count this cash and prepare it for banking. Cost per week £30. It takes, on average, a minute to serve each Paypoint customer. Cost per week 1,250x1p (@ £6 per hour) £12.50."

Insurance costs are higher as a result of extra cash on the premises and staff, being human, occasionally make a mistake. He adds: "This always costs us a minimum of £5. As soon as a Payoint customer comes in to pay a large bill, our tills go over the limit and another safe drop must be done or security is jeopardised."

There was more like this but he summarises: "The result of all this? A bloody great queue which results in other profitable customers getting fed up and going elsewhere in the future, and empty shelves because staff haven’t had enough time to restock."

But a solution of sorts has occurred to our correspondent: "I now levy a transaction charge on each Paypoint customer of 25p. I then give them a 25p voucher. If they bring back this voucher within a week, spend more than £1.49 in our shop (we exclude low margin goods) we refund the 25p.

"This means that we don’t punish our loyal customers but we also don’t waste our time serving customers who give us no profit and prevent us from serving those who do. What’s more we also accept payment by debit card for no extra fee. After all if they pay by debit card we have the option of offering cash back which means everyone’s a winner.

"Currently we are getting about a 25% redemption. There have been a few complaints but most customers understand that unless we make a profit we cannot pay our staff and that the service will have to go.

"Unfortunately Paypoint is unhappy and tells me that I might lose my terminal."

Next month I will bring you Paypoint’s view on footfall. There just isn’t room here.