LightSpeed Retail Acquires MerchantOS, Rebrands as LightSpeed Cloud

LightSpeed, makers of LightSpeed Retail Point of Sale (POS), today announced that they've acquired the web-based POS company MerchantOS, and will be selling their solution under the new name LightSpeed Cloud.

The news that LightSpeed was launching a new and separate POS product was met with some skepticism from existing LightSpeed Retail (now LightSpeed Pro) customers who have been asking for some critical missing features for years now.  However, the fact that LightSpeed acquired its new cloud offering by acquiring MerchantOS, and not by diverting existing resources, is good news.   It appears that the reason for the acquisition was the desire for a cloud POS offering, that features the "any device, anywhere" deployment and trades off a large up-front cost for a startup-friendly monthly fee.

The fact that the two POS offerings do not interoperate is a negative, and hopefully they will at least offer a data migration path between the two in the future.

The re-branded Lightspeed Cloud has an attractive new look and feel, compared to the existing MerchantOS. Experienced retailers who have dealt with Internet or website downtime, however, may be shy to depend on a web-only solution.  I could not find any mention of an offline mode to the web interface.  Presumably, if your Internet connection or their servers go down, you are out of business.  With the existing Mac-based LightSpeed Pro, however, you could continue to run cash sales and manual credit card slips until your Internet comes back.  We've had at least ten instances of Internet downtime in the last 9 months, and switching between the two Internet providers in the area hasn't helped.  If we were on MerchantOS we would have been pretty unhappy.

While we are passionate about the need for better point of sale software, and support LightSpeed's efforts to fill the gaps in the market, we believe they should focus more on fixing the existing POS software's major issues, and less on flashy new products.

When creating software, the last 5% of bug fixes and features take 50% of the effort.  It takes tremendous discipline to finish the job and ship a complete and robust package.  Here's hoping they make the changes necessary to become an organization that can accomplish this.  They are pretty close.

Major Pain Points for LightSpeed Retail POS

We recently deployed LightSpeed Retail POS in our brick-and-mortar store.  We have about 1500 different items, and sell many things in bulk.  This post lists some of the major issues we are running into with LightSpeed Retail POS (currently version 3.8.1.0).

Update: We are currently experiencing data corruption with Lighspeed POS.  Updates posted here.  

 No Fractional Cents for Product Costs

When you enter the cost of an item, you are not allowed to enter a cost with fractional cents.  For example, for a bulk foods section, assume you buy your Wheat Flour in 50 pound bags with a supplier cost of 41.92 per bag.  You should enter a product called "Wheat Flour Bulk per lb" with a supplier cost of 1.19275.  When you order from your supplier, you order qty 50 for each bag, and the PO cost would be correct.

In LightSpeed, however, you are not allowed to enter more than two decimal places of cost.  You are forced to enter a supplier cost of 1.19.  This means your POs are all wrong.  You may think about using build/break apart as a workaround, and creating an additional item called "50 lb bag, wheat flour", but this is a horrible solution for many reasons.  (Staff has to exit point of sale, do break aparts, receiving is complicated, searches are complicated, inventory is screwed up, errors are multiplied, etc.).

Because of this issue, we basically cannot use ordering from LightSpeed for many of our suppliers.  It is a huge headache.  Many other people have complained about this for years now.

Inventory Count Tools Are Near Useless

With 1500 different products, the existing inventory counting tools in LightSpeed Retail POS (version 3.8.1.0) are useless.  They give you one tool, "Count Inventory", which requires that you enter a count for every one of your items.  Your are expected to do this in one small window.  The interface bogs down very badly with this many items.  It doesn't support any sane model of inventory counting, where you count one department (LightSpeed Class or Family) at a time.

What we need is a transactional document for each inventory adjustment.  This inventory adjustment needs to be given a reason and a date, and that reason needs to be passed through to the accounting (General Ledger or GL) system as a memo.  This allows for proper accounting due to theft (very important after a shoplifting event), and also end of year inventory.

You can export all your items to a spreadsheet, then filter by department (class / family), then enter a new column with your counts, then re-import the spreadsheet, but this is impossible for retail staff to do. It requires an IT consultant.  Our retail staff should not need to know how to manipulate .csv files or have the privilege to do mass product imports which can easily nuke all your data.

Magento Web Store Integration Is Half Baked

Also take a look at our article on the promise and shortcomings of Lightspeed Retail POS integration with Magento web store.  It is clear this functionality is not quite ready for enterprise use.

Magento versus Web Store for Lighspeed Retail

So you have your fancy new Lightspeed Retail POS system set up and you are ready to deploy a web store.  Once you've purchased the ECommerce license, which web software do you use, Magento, or Lightspeed's own Webstore (github code repo).

Update

We've started our Magento deployment and run into some issues.  We've written our initial thoughts on Magento integration with Lightspeed Retail POS.

Features

The features we need are:

Wholesale / Price Level Support
- Ability to set different price levels for different customers.
- Ability to tag or categorize subset of products as Wholesale.

Customers

- Customer database interaction with Lightspeed POS.  This may be a standard feature for both Magento and Webstore(?).

Would love to hear comments for others.  This post is a work in progress and I will update it.

Migrating from Quickbooks POS to Lightspeed Retail: Overview

In this posting, we give an overview of the process of migrating from Intuit's Quickbooks Point of Sale (POS) to Lightspeed Retail Point of Sale (POS). In later posts, we will go into more detail on individual steps.

Before you can start a complex migration like this, you need to understand what exactly you are going to do.

Overview: Steps to Migrate from Quickbooks POS (QB POS) to Lightspeed Retail

This is a work in progress. May be steps missing.

1. Get new mac hardware set up
2. Freeze your Quickbooks POS (QB POS) system. This means no editing items or vendors, no receiving stock. No making POs, etc. Consider the system as read only. You are only using it for exporting data from this point forward. Before you do this step, it is good to spend some time cleaning up your Quickbooks POS (QB POS)
3. Export QB POS vendors. We'll show later how to filter this data to only include vendors you actually use in the POS.
4. Export QB POS "departments" a.k.a categories.
5. Export QB POS items.
6. Set up lightspeed. This includes many steps they cover in their documentation. Don't forget GL account mappings.
7. Import vendors using the import tool.
8. Import departments (product categories). There is no Lightspeed import tool (as of [TODO list LS version]) for categories (classes or families, in Lightspeed speak). Carefully copy from QB POS export spreadsheet into Lightspeed "classes". You could also use the Lightspeed product's "family" field.
9. Make a backup of Lightspeed database. Move that backup file to a place that won't get automatically deleted by Lightspeed's smart backups folder (it only keeps so many daily backups, and ours was nuked, but we were able to recover it using TimeMachine backup.
10. Import customers using Lightspeed import tool. We had to fix our customers.csv file from QB POS, as it contained characters Lightspeed silently barfs on (big time). I have a script which will do this for you. We also had to merge in some data from our customer sales report so we can see how much our customers have spent in the past from the new system.
11. Import items/products. Our products .csv file also needed to be cleaned up before Lightspeed could import correctly.
12. Map GL accounts to products. Watch out for the Accounts Payable mapping on products. That account should usually be left empty (unset). It is only used for things like a non-inventory "Shipping" product you can use to add freight to your supplier invoices.
13. Test everything. Make sure the system works correctly. I suggest testing sales, ordering stock, making supplier invoices, doing inventory adjustments. Post and export to your accounting package at each step. Work on a test copy of your accounting file and make sure the GL exports are doing the right thing in your accounting package. Chances are you'll find issues here and want to go back to step 10 above. We've done this a couple of times. Each time we start over with fresh customer and product exports to make sure our inventory is in sync when we go live.

There are more steps.. but this are the basic data migration steps we're following. Again more important details on each step are coming in later posts.

Processing Exports: Overview

For all the QB POS exports you do, you'll need to convert them to a different format which Lightspeed can read, a simple text file with comma-separated values, or a .csv file, for short. In our case, we also needed to combine some other QB POS data into these .csv files. For customers, we needed to bring their purchase totals from QB POS. In the QB POS customer export, there are no sales total per customer, because those numbers have be generated from a separate sales (by customer) report. For vendors, we needed to only include the vendors that the QB POS actually orders from. Many extra, unneeded, vendors were synced from Quickbooks Financial (everyone we've ever paid).

As of my version of QB POS (9 basic?), you need to have Excel installed on the POS to do some exports. This is pretty annoying for a Google Docs / Libre Office shop (and another instance of Intuit's default mode of costing their customers money).

TODO wrap up this overview article.

Our Experience with Intuit Merchant Services

We feel strongly that we were the victim of some misleading sales practices by Intuit Merchant Services (formerly Innovative Merchant Services). This blog post documents our experience. Our success with the BBB has been very limited: they simply closed our case without looking at any evidence. This information is relevant to this blog: It is the reason we ended up ditching Quickbooks POS.
Timeline: 1. Sales

When we initially looked at purchasing Quickbooks Point of Sale (POS), we shopped around to make sure their credit card processor was competitive. You only get one choice of a provider with them so we carefully requested details so we could make an informed decision, or so we thought.

We were initially given a rate over the phone which was very competitive. I had to really press the salesman to get it in writing, as this email thread shows:

TODO: redact, format, and post email thread.

The verbal message was there are two tiers: keyed and swiped. Swiped rate is 1.64% + .23. Keyed 2.44%. The written documentation we signed does not contradict this claim.

Timeline: 2. Auditing fees

Years later, we decide to audit our credit card processing statement. These things are very cryptic. You wonder if it is on purpose. This is a place where we need more government regulation, not less. Anyways, we do the math and see we're paying more like 3.5% swipe fee. We find there is no way the reality on the statements is consistent with the information we were given at sales time.

Timeline 3: contacting Intuit

I politely inform them we've been charged way over the rates they quoted us. Yes I did read the fine print in the agreement and what they are doing is a mistake, and I want a refund. They are friendly, but tell basically tell us to piss up a rope. They do lower our rates to try and make us feel better for getting screwed though.

Timeline 4: BBB Complaint

So far, the BBB process has been a bit of a joke. I understand they are probably very busy and get a bunch of crazy complaints, but they closed the case without looking at any of the (compelling) evidence. I'm pasting the current version (Feb 18, 2013 10:50pm PST) of the complaint here:

COMPLAINT ACTIVITY REPORT  Case # 304977 BBB of Silicon Valley

Consumer Info: ,  Business Info: Intuit, Inc.
   Mountain View, CA  94039-7850
        -        -  520 901-3280
 aj@gmail.com


Location Involved: (Same as above)

Consumer's Original Complaint :
Credit card processor quoted 1.64% swiped card transaction fee.  Actual fees charged are closer to 3.5% even though we swipe all transactions.

We originally started this merchant credit card processing account in May 2009.  Since then, we've been charged about $11,000 more in fees than we should have, had the agreed to rates been actually implemented.

I contacted Intuit today, Jan 17, 2013 and explained the situation.  They said any sort of rewards card or business card does not qualify for the "swiped rate", even though we swipe those cards.  I explained almost everyone has a reward card, and that this was never disclosed to us.  To the contrary, the salesman, Steve M. assured us in writing that indeed the rate for all swiped transactions was 1.64%.

Intuit's website continues to advertise this false information here:

http://payments.intuit.com/products/quickbooks-payment-solutions/point-of-sale-solutions.jsp

In fact, their lowest rate was just raised to 1.69% without notifying us nor modifying the agreement and advertised rate I just linked to above.



 

Consumer's Desired Resolution:
I would like a refund for all fees on swiped cards over the 1.64% I agreed to.  I have not calculated this exact amount, but based on the percentages of a few statements, I estimate the amount owed to be 11,400.  This was calculated by these assumptions:Annual swiped credit card revenue  180,000Advertised fee  1.64% Average charged fee 3.5% For three years this ends up $11,400.

BBB Processing 

01/17/2013   web BBB Case Received by BBB
01/17/2013    BBB MORE INFO RECEIVED FROM THE CONSUMER : Our merchant account number with Intuit Point of Sale Merchant Service is 
 5247712000079372
01/18/2013   LMP BBB Case Reviewed by BBB - Member
01/18/2013   Otto EMAIL Send Acknowledgement to Consumer
01/18/2013   Otto EMAIL Notify Business of Dispute - Member
01/28/2013   WEB BBB RECEIVE BUSINESS RESPONSE : January 28, 2013
 Better Business Bureau of Silicon Valley
 1112 S. Bascom Ave. San Jose, CA 95128
 Re:   - Complaint #304977
 To Whom It May Concern:
 I received the complaint your office forwarded on behalf of   regarding his Intuit Payment Solutions account. Thank you for the opportunity to respond.
 Mr. 's refund request has been denied as all fees he has been charged are correct and in compliance with the Merchant Agreement that he agreed to when he signed up. The information pertaining to the credit card fees are disclosed on the Merchant Service Web site at http://payments.intuit.com/products/quickbooks-payment-solutions/point-of-sale-solutions.jsp. Disclosures information can also be found on the same link by clicking on Important disclosures. A rate review was processed per Mr. 's request and because of his transaction history we were able to negotiate lower rates for him.
 If you have further questions or concerns, please do not hesitate to contact me at (520) 901-3280. I will be happy to assist you.
 Sincerely,
 Maria Rivera
 Intuit Inc.
 Office of the President
01/28/2013   LMP EMAIL Forward Business response to Consumer
01/29/2013   WEB BBB BBB REVIEWS CONSUMER REBUTTAL TO BUSINESS RESPONSE : (The consumer indicated he/she DID NOT accept the response from the business.)
 The supplied link does *not* disclose the actual fee structure I was charged.  It is consistent with what I was told by the sales rep:  You will get the swiped rate as long as you use the card swipe connected to your computer.
 This is not true. Nothing I signed told me otherwise. This is a deceptive sales practice. 
 The fine print Intuit is referring to does not clarify this deception at all, I quote:
 "5 Card-swiped rate applies to qualified swiped Visa/MC/Discover network transactions and requires the card reader for QuickBooks for PC service, which is available for $69.95. To order, call 866-379-6636."
 I was told that "qualified" was "card swiped".  Turns out only 20% of swiped transactions are "qualified".  That was *never* disclosed to me.  On the contrary I was told that I would get the 1.64 rate on all swiped cards.
 Anyone tell me that this is not deceptive.
 All I expect is full disclosure and honesty.  I can't do business with companies who cannot meet this expectation.  We were charged as much as 3.5% on average!
01/29/2013   LMP EMAIL Forward Consumer Rebuttal to Business
02/04/2013   WEB BBB RECEIVED BUSINESS' REBUTTAL RESPONSE : February 04, 2013
 Better Business Bureau of Silicon Valley
 1112 S. Bascom Ave. San Jose, CA 95128
 Re:   - Complaint #304977
 To Whom It May Concern:
 I received additional information that you provided regarding our previous response to
  's complaint. We appreciate the opportunity to respond.
 As stated in the previous response Mr. 's refund request has been denied as all fees he has been charged are correct and in compliance with the Merchant Agreement that he agreed to when he signed up. The following information is provided to all customers on the Merchant Solutions Application Agreement.
 I acknowledge that I have read the Merchant Agreement, and I understand and accept all of its terms and conditions. I understand that upon my acceptance, the Merchant Agreement, together with my submitted application, will constitute a binding agreement between Bank, Innovative Merchant Solutions (IMS) and myself with the same force and effect as if I had executed a written agreement. I understand that it is my obligation to obtain and retain a current, complete and correct copy of the Merchant Agreement and to periodically view the merchant agreement at (www.innovativeagreement.com) to review any changes to the Merchant Agreement.
 In addition the Fees and Discount Percentages are also disclosed in the Merchant Agreement.
 2.29 Fees and Discount Percentages
 The Schedule of Fees and/or Merchant Application set forth discount rates and other fees that apply to different types of Card Transactions. This section describes how
 IPS determines which transaction types qualify for the different transaction rates. Also, unless stated differently in the Schedule of Fees or the Merchant Application, the fees noted below will apply to Card Transactions. Additional charges that may occur from time to time include chargeback fees, representment fees and retrieval fees. If the relevant Schedule of Fees or Merchant Application calls for a monthly minimum fee, that fee will be deducted unless you have met your minimum processing volume. The standard delivery method for Monthly Statements is in an electronic, online version that will be generated each month and located at https://merchantcenter.intuit.com/welcome. The Qualified Discount Rate will be deducted daily. If Merchant has 2-tiered pricing with Qualified and Non-Qualified Rates only, transactions listed in the Mid-Qualified category will be charged the Qualified rate. Additional information about how we manage our rate categories is set forth on Exhibit D. (a) Qualified Discount Rate. The rate charged on transactions that have the following attributes: swiped non-rewards consumer signature credit or debit cards where the full magnetic stripe has been read that are electronically authorized and closed in a daily batch. (b) Mid-Qualified Discount Rate. The rate charged on transactions that have the following attributes and have not qualified to be charged the Qualified Rate: keyed debit cards with matching AVS response for "card present" transactions; keyed consumer signature debit cards with valid AVS response and order number for "card not present" transactions; and some categories of rewards signature credit cards where the full magnetic stripe has been read that are electronically authorized, and in each of the preceding cases have been closed in a daily batch; and (c) Non-Qualified Discount Rate. The rate charged on transactions that have the following attributes and have not qualified to be charged the Qualified or Mid-Qualified Rate: Business, Corporate, Purchase, International, Government, Rewards, World cards, "High End Value" or other such rewards cards as defined by the card issuers; keyed credit cards, keyed Consumer credit or debit cards without fully matching AVS; batches not closed within one calendar day of transaction; and any Pre-Authorized sale that is not processed/captured within 7 business days.
 If you have further questions or concerns, please do not hesitate to contact me at (520) 901-3280. I will be happy to assist you.
 Sincerely,
 Maria Rivera
 Intuit Inc.
 Office of the President
02/06/2013   LMP EMAIL Send Business' Rebuttal Response to Consumer
02/18/2013   OttO BBB No Consumer Response- Assumed Resolved with Letter
02/18/2013   OttO BBB Inform Business - Case Closed ASSUMED RESOLVED
02/18/2013   OttO BBB Case closed - ASSUMED RESOLVED
02/18/2013    BBB MORE INFO RECEIVED FROM THE CONSUMER : Why was this case closed?  I only received the initial response from BBB.
 I see nothing here that refutes my complaint.
02/18/2013    BBB MORE INFO RECEIVED FROM THE CONSUMER : To be clear, I have not accepted their response.  I took some time to read the latest response.  We were quoted the 1.64% rate as long as we swiped our cards.  I've never seen the text about three tier pricing before today.  I looked, and yes, I can back up everything I'm saying with  documentation.  Give me an email address and I'll send attachments.

Making an Informed Decision: What is wrong with Quickbooks POS?

What is Wrong with Quickbooks POS
In our personal opinion, the problems with Quickbooks POS are

• Lack of E Commerce Support . In the year 2013, we cannot afford to be using retail software that doesn't integrate with at least one decent, open source, web store platform.
• Intuit. They really try to constantly extract cash from you. It is never enough. Go on Amazon and read some reviews. Ignore the many fake positive reviews (or having fun trying to spot them. Hint: they've only reviewed one product, or they've also written reviews copy-and-pasted from the web for other products, trying to look authentic.)
• Credit card processing. This is what pushed us over the edge. The only credit card processor that integrates with QB POS is Intuit Merchant Services (formely Innovative Merchant Solutions). They are owned by Intuit, and we feel they really took advantage of us. We were quoted a great rate, as long as we used the electronic card swipe. In reality, they arbitrarily started calling just about any type of credit card not "qualified swiped". Does your customer's credit card give them rewards? Most do these days. Those aren't "qualified swiped". They still are using these deceptive sales practices today (Feb 2013). They also were happy to charge use $100 PCI Compliance fees, without making any effort to contact us or check our compliance. We've been compliant the whole time and have still paid over $400 in compliance fees.

Why We Decided to Switch to Another POS
The credit card fee gouging made it imperative that we get off Quickbooks POS. We simply couldn't afford to pay 3.5% effective swipe fees. Lighspeed Retail POS seems expensive, but we did the math and found:

1. The savings in credit card fees would quickly pay for the whole package
2. Even without processing savings, the price difference was tiny considering we needed to add another register. I believe that adding an additional register requires us to upgrade to the latest QB POS version on all stations. They release a new version every year. This is a cash cow for them (same with Quickbooks Financial).

Moving from Quickbooks Point of Sale to Lightspeed

Welcome to our new blog about our experiences running Lightspeed Retail Point of Sale. We own a growing store in Portland, Oregon. We've used Intuit's Quickbooks Point of Sale (POS) for almost four years, and really want to get rid of it. After a good amount of searching, we decided to migrate to Lightspeed Retail. We noticed a lack of information about Lightspeed Retail POS on the web, so we decided to blog about our experiences. Our goals in writing this blog are:

1. Help people who are shopping around for a new POS make an informed decision.
2. Help people migrate to Lightspeed. This is a good amount of work and we want to share our efforts with others.