Closing the Bar Tab Gets 'Smart'

By Jason Steward, General Manager, Kung Fu Saloon | March 03, 2011

Since opening last year, Kung Fu Saloon (www.kungfusaloon.com) has become one of the most popular bars in the West Sixth Street entertainment district of Austin, Texas. Its relaxed atmosphere features a wide variety of drinks alongside vintage arcade games like Ms. Pacman, Skeeball and Giant Jenga.
 
Shortly after opening its doors, Kung Fu encountered a problem at its 2:00 a.m. closing time. On a busy night bartenders could find 250 to 300 patrons waiting up to 45 minutes each to close out their credit card tabs. Despite a full staff, bartenders could not close out patrons’ tabs fast enough, leaving guests frustrated, and the bar with extra operational costs. Management sought a solution that would decrease guest wait times and dissatisfaction, without losing revenue or increasing operational costs.

 
Kung Fu implemented TabbedOut (www.tabbedout.com), a new POS integrated checkout application that offers a secure way for patrons to open, review and pay their bar tabs through either an iPhone, iTouch or an Android smartphone. TabbedOut does not require bar guests to create a new account. Instead, the Austin-invented app securely stores the patron’s valid credit or debit card safely on their phone. The TabbedOut integration process with the POS system at Kung Fu was simple, and was up and running without the need for new hardware or service downtime.

Once guests add the TabbedOut application to their smartphone, they can open a tab by telling the bartender they are using TabbedOut and showing the bartender a unique code that is automatically generated through the app. After their tab is opened, patrons can review or close it at their leisure without any bartender interaction.

Kung Fu’s bartenders were trained on the app in less than three minutes. TabbedOut provided patron education materials throughout the bar, including stickers for each register and a hanging banner and table tents in the bar area. Patrons responded: they consistently ask bartenders what TabbedOut is and how to use it. In less than a minute, bartenders help patrons download the app and order their first drink.

Sell more drinks with better service
Since deploying TabbedOut, Kung Fu has eliminated the end-of-night wait for TabbedOut users. In the time saved, bartenders are 15 percent more efficient and are able to serve more drinks; that efficiency increases revenue by anywhere from 10 percent to 15 percent on a busy night.

Kung Fu bartenders also note that serving drinks to TabbedOut patrons is a quicker process than traditional credit card patrons since they’re easier to identify at the POS terminal. TabbedOut patrons are listed by first name and are highlighted in bright yellow while traditional credit card customers are highlighted in white at the POS.

In addition to improved operational efficiency, Kung Fu’s bartenders are able to deliver more personalized service. Since the venue is able to set a minimum and default tip amount, the servers at Kung Fu are guaranteed a minimum 20 percent tip with the app. On the marketing side, TabbedOut advertises venue specials involving the service on Facebook and Twitter. Kung Fu is also able to offer extended happy hour specials to TabbedOut patrons.
 
About the app
TabbedOut is available to consumers as a free download from the iTunes store, and works on iPhone, iTouch and Android phones. Bars and restaurants pay nothing for the service; patrons currently pay $.99 per transaction. As is the case with Kung Fu, many establishments offer special promotions to TabbedOut patrons to offset the transaction fee. The app has strong proliferation in its native city with more than 20 Austin-based establishments accepting TabbedOut payments, and is spreading into major metropolitan areas including New Orleans, Chicago, and New York City, among others. The app integrates directly with the restaurant’s POS.
 
Jason Steward is the general manager of Kung Fu Saloon in Austin, Texas, with more locations opening in Houston, Texas this spring.
 
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