Thursday, April 5, 2012

Sodexo & Ticket Restaurant Meal Vouchers - Pain in the *** for Restaurants


The most common payment forms at restaurants are Cash and Credit Cards. Other than this, there is another mode of payment which gets used to a reasonable extent, atleast in the metros - Sodexo and Ticket Restaurant meal vouchers. While there may be several reasons for these vouchers to exist, As a restaurant business owner,  Sodexo/Ticket Restaurant coupons are extremely painful to handle - why?

1) There is a commission of 7% (the figure could be lower for high volume large establishments) that is deducted by Sodexo/Ticket Restaurant on the value of the vouchers. For context, when you use a credit card, only 1.8-2% gets deducted. There is also a upfront fee of Rs.5,000 that Sodexo and Accor each collect from the establishment to set them up in their system.
2) The denominations of the coupons keep changing and are not always clean numbers like 10,20 etc. You have coupons for 27, 31, 17 etc. So while collecting the payment, it is impossible for the steward/delivery boy to count and verify the amount - These guys are not math wizards and the customers are not patient enough to allow these guys to slowly count the vouchers. They just leave the payment and walk out or hand over the payment and close the door. 
3) The Sodexo & Ticket Restaurant vouchers also have expiry dates on them (printed on the vouchers). When customers use these vouchers, it is impossible to expect the steward/cashier to check for the validity. Imagine if someone gives you 540 rupees (four 100 rupee notes, two 50 rupee notes, four ten rupee notes). If the currency dates had expiry dates on them, do you think you will be able to check these everytime you do a transaction. So if the restaurant ends up with expired vouchers, Sodexo/Ticket Restaurant would reject these and not pay the restaurant. 
4) Once the payment is collected, the cashier has to store the vouchers (which are like Cash) carefully and safely for atleast 15 days (will explain why below)
5) Sodexo and Ticket Restaurant have a collection and payout calendar (approximately every 15 days). The Restaurant needs to stamp each voucher and submit the vouchers for payment to Sodexo & Ticket Restaurant before a certain date. The payment is then received after 2-4 weeks. So in essence, the restaurant gets paid almost after 4-6 weeks after the vouchers has been received from a customer. On top of the 7% commission, the money also gets locked in for a period of 4-6 weeks.
6) Practically, several restaurants use the vouchers to buy provisions from some of the large wholesale suppliers. They take Sodexo/Ticket Restaurant coupons for a 5-6% commission in lieu of cash for provisions/groceries. 
7) Several Sodexo/Ticket Restaurant coupons are restricted by usage - i.e. only within the company campus. There is a small text printed on the coupons. If these coupons are used at a stand-alone restaurant, there is no way for the steward/cashier to find it out at the time the customer presents these coupons. When they submit the coupons for payment to Ticket Restaurant/Sodexo, these coupons are treated as invalid and the payment is not made.
8) Grocery stores have stopped accepting these coupons recently. So the usage of these coupons at restaurants is only increasing.  
9) Customers tend to use these coupons at low cost eateries/food courts. Fine Dining restaurants typically refuse to accept these and the bills are also high prompting customers to use credit cards/other modes of payments. So with these coupons, the guys who bear the brunt are the low cost restaurants whose margins are anyway very thin. 
10) It is difficult to determine whether the coupons are authentic at the retail locations. It appears quite easy to print these coupons and use it. There are a number of security features built into the vouchers - the water mark, bleeding ink, anti copy feature amongst others, that are easily identifiable. The good thing is there  are hardly any instances of forgery that the 2 companies have noticed in the last 15 years of operation in India. 

I believe I have clearly made a case for completely getting rid of these coupons. Till the time this happens, Restaurants will have to put up with the burden of dealing with these coupons. So the next time you use Sodexo/Ticket Restaurant coupons at a restaurant leave a generous excess amount or atleast be mindful that these coupons are a Pain in the A** for the restaurant business. 

The biggest advantage these vouchers offer is "Targeted Usage' - i.e. allowing the user to purchase only food related items. In the US, the government provides food stamps to economically downtrodden people to buy food products. They do not want them to use the money for buying cigarettes, drugs, alcohol etc. So the food stamps help in targeted usage. In India though my understanding is that the primary purpose of food vouchers currently is for tax benefits and the folks getting these vouchers are those working in IT companies/MNCs. 

If the government's idea is to provide tax benefits to employees for meal related costs, wouldn't it easier to simply allow the amount of say Rs.12,000 per year to be tax free (like in the case of conveyance allowance). 

Some articles related to this issue:
http://www.thenewcritic.com/2012/01/notice-for-customers-using-food-coupons.html

PS: A reader sent me an email asking me what the picture of a lion roaring, is doing in this post. This is a pic of a lion getting bitten in the *** by a cub lion. So the lion is not roaring but is howling about the Pain in the ***. Source: http://www.funnychill.com/media/332/Pain_In_The_Ass/

32 comments:

  1. Hi Jayanth,

    Nice explanation about Sodexo & Ticket Restaurant Meal Vouchers. Definitely it is difficult to maintain all these things in a busy schedule of business hours. But from customer side as it is giving a tax benefit so customers preferring to go those restaurants where restaurants are accepting that type of vouchers.

    ReplyDelete
  2. yup , that was a really good explanation. Recently all the grocery store near me have stopped accepting these. On top of that most of the super marts (hyper city , spencers) have stopped accepting. But what irritates me the most is that Edenred has promptly gone and listed these retailer on there website as "our esteemed affiliates" while more than half of them refuse to accept ticket restaurant. My only hope is that Edenred amend their relationship with the retailers because i've got a crate full of ticket restaurant that expire in December '12 and which i only use for the occasional domino's pizza orders.

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  4. Nice article. Clearly they are a pain...I want to clarify a few things
    1) it is not true that there companies have not experienced fraud in their past 15 years. There are several cases

    2) if it is such a pain... you should stop accepting. You don't want to lose business right? But a collective action by your association can do the trick as there is not value addition by the voucher companies. The govt. should consider tax benefit for meal same as they do in travel allowance

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