First, it is more appropriate to answer the question: what does inefficiency mean?
As the name suggests, we can describe it as not productive, insufficient, or low.
It should also be remembered that the inefficiency criterion differs for each institution. There are also institutions that manage this separately by device type. For example, while turnover below 3,000 TL is considered inefficient for one institution, this amount may be higher for another.
So, why do institutions try to monitor inefficient POS terminals and lines and make them efficient?
- The high purchase cost of physical POS devices,
- The long time it takes for physical POS devices to enter stock,
- Payments made to field service companies for inefficient devices as well,
- A fixed fee being paid for all lines (even inefficient ones),
- Devices that stay inefficient for a long time (with no turnover at all) possibly turning into Lost POS,
- A fee being paid per inefficient terminal as well when the host software is sourced externally,
- A fee being paid per inefficient terminal as well when the POS application software is sourced externally, and many other important points.
Considering all these items, and given that the purchase volumes of both POS devices and lines are high, it will not be hard for you to estimate how serious the loss that inefficient POS terminals and lines will cause the institution can be.
To make terminals efficient, institutions can generally pass an inefficiency fee on to merchants. However, it is important to evaluate how well these amounts are actually collected and what financial burden they place on the institution in the case of extra device purchases.
For this reason, it will be useful to stay in close contact with merchants whose terminals are inefficient and to hold discussions on steps to increase merchant turnover.
If you have no device, field and operating costs, you may not need to take any action to avoid losing the merchant. However, if you do have device, field and operating costs and also have no income source from your cross-sell products, I recommend reviewing your work with the merchant.
In summary, closely monitoring the efficiency of your institution’s POS terminals and lines may positively affect your institution’s turnover and ensure that the extra amount you would set aside for device and line purchases stays within your institution.
