Starbucks POS Glitch Shows Gap In Register Tech

When Starbucks’ POS experienced a massive glitch last week, some consumers rejoiced as they got free coffee (except those who were turned away when stores shut down).

Meanwhile, Starbucks’ execs were forced to make the decision to temporarily solve a glitchy POS system: give the products away for free, or shut down. They eventually did both.

But as an Associated Press article points out: a POS system is only as good as the technology that supports it. And when a glitch occurs, the modern-day POS systems that are increasingly sophisticated can’t do much when a register loses the ability to process payments. For Starbucks, this hurt its loyalty program, its mobile payments ability and its ability to take really any type of payment. And it angered a whole bunch of Starbucks consumers who were turned away once the stores were forced to shut down.

This POS malfunction caused Starbucks to hand out free beverages, but it also led to the coffee chain shutting down 60 percent, or 13,500 locations, across the U.S. and Canada while the issue was resolved. And it also forced the company to have to release continual updates on its website about how the issue was being resolved and when Starbucks would resume operations as normal.

While the POS outage may not seem out of the ordinary, some company executives suggest that the massive scale the glitch impacted wasn’t typical for the industry. The glitch, which Starbucks said was an “internal failure during a daily system refresh,” lasted for a few hours last week (April 24) and was resolved in the evening hours. Starbucks didn’t provide further information about what caused the issue.

“I have never heard of anything on a national scale like this,” Blaine Hurst, chief transformation and growth officer at Panera Bread Co., told the Associated Press.

In another interview, Craig Bahner, former chief marketing officer for Wendy’s, was quoted as saying the POS system was “a tool to be able to get to know your customer,” primarily because of the data it’s able to produce. And as he put it: “Data is the holy grail of retail.”

The transaction data of how, when and why consumers are buying products — particularly in the restaurant retail industry — is key to understanding its customer base. It can also help companies understand which products to ditch and which ones to offer more of. For inventory and scheduling purposes, these factors are key to efficiency measures.

Most major restaurant retailers have backup systems in place when their Internet goes down to account for some technological issues, but when there are glitches outside the connection that extend into the chain of the POS capabilities, that’s where the real issues are seen. And in Starbucks’ case, a glitch that shut down 60 percent of its stores for hours.