Harbortouch "Free" POS System Program, Simplified

I recently had the opportunity to expand my consulting service with the products offered by Harbortouch, aka United Bank Card, Inc. (UBC). UBC is a very similar company to the other processors I use, in terms of size and offerings and the flexibility of pricing, so there was little incentive for me to go through the paperwork until I looked deeper into their Point of Sale terminal program. As it happened, I had a client who was looking for a POS system and we decided to do some number crunching and some feature comparisons. What we found surprised me.   

My first impression was that the Harbortouch program would probably fall into the "too good to be true" category. Everyone who has been around the block knows that "free" terminals generally means that you get to borrow the equipment if your pricing structure is high enough. That's fine for most businesses, because the minimum pricing requirements to qualify for equipment placement are usually offset by the savings of not having to purchase new equipment combined with the ability to exchange a defective or outdated machine at little or no cost. The one thing that often does get merchants with equipment placement is that they are likely (but not always) locked into a 3-year term with a cancellation fee that is higher than the price of a terminal. But here we are talking about standard counter-top card swiping terminals and nothing beyond that. When moving into POS territory, things become a bit more complicated. And, in this case, more enticing.


I have long been able to offer solutions like PC Charge or access to web gateways that have simple POS functions and integrate into accounting software quite nicely, which work just fine for small retail establishments that need such integration or want to use their own computer as a terminal rather than clutter things up with more equipment. Adding a simple USB card reader and possibly a barcode scanner can turn a laptop into a low-end POS system without any bells or whistles and without any huge monthly fees, but they are basically still just systems that run charges and make accounting a bit more streamlined, without offering the robust features expected of a professional POS system.

When looking at the range of options on the market just for restaurants, for example, there are a mind-numbing number of choices. I have set up processing for a few different systems and found them all to be something of a nightmare, with different hoops and glitches along the way. I totally understand why some merchants prefer to stick with the higher processing costs associated with the "preferred" processing partner pre-integrated with their POS system rather than cough up the $1,200 to $2,000 required to "open the system" for a different provider. Not all POS systems are tightly closed like that, but many which are purchased outright by the merchant still have a very limited number of processing providers available or require that a processor not on their list uses a third-party gateway to interface. And these systems may cost the merchant well over $10,000 to buy on top of the monthly service fees. For these reasons, going into a POS system is a huge commitment that requires a lot of forethought. (I am just using the hospitality version of the POS system as my example, but Harbortouch offers several "flavors" geared toward different business types, from standard retail to quick-service or delivery restaurants, to liquor stores, etc.)

Because the equipment and peripherals vary widely, I thought it was only fair to do a comparison between systems that have similar specs. As it turned out, the system we chose had very similar guts, including the processor and screen, and even s similar physical configuration. It should be noted, however, that the system compared for purchase was made from plastic whereas the Harbortouch POS is molded aluminum and therefore is probably much sturdier. The software in both systems offers the same basic functionality (though I will go into more of the forward thinking aspects of Harbortouch later).

This merchant required three terminals or stations for his establishment, and all three had to be wired for an ethernet connection. Harbortouch requires a hard-wired solution for security purposes, though the network can involve Wi-Fi connectivity under the proper circumstances. Assuming that the establishment is pre-wired, Harbortouch sends out an installation team to get the system integrated to the business with each station utilizing a single touch screen monitor/CPU unit, a cash drawer and a receipt printer. These stations are able to communicate with one another while also offering a live connection to the cloud-based control center for the manager to access from either one of the stations or a separate computer anywhere in the world. The comparison system offered the similar (but plastic) touch screen monitor/CPU combo, cash drawer and printer set up, but no cloud-based control center. Out the door, the comparison unit ran just a few cents under $11,000 with the option for any processor to offer service and included a three year manufacturer warranty on the hardware along with one 8-hour day for installation and training. Nothing else, including support or maintenance of any kind, is included in that quote. It does not appear to include any software updates or additional services of any kind. For that, $11,000 seems like a pretty steep investment, and yet it is one of the most competitive bids I have seen for this level of system. Until comparing the benefits of Harbortouch.

Most POS systems with the kind of features requested by the restaurants I have worked with are provided by companies that charge for the equipment (often more than the amounts above) and ALSO charge monthly fees per-station for continued support and service. These fees may be several hundred dollars each month, and this is on top of the equipment. Sometimes it is billed as a "software license" and sometimes as "customer support" or even an equipment warranty. But these amounts add up, and quickly. If the restaurant is not doing a booming business, I'm not sure how the systems can be worthwhile. But if the business does do a brisk business and the POS system does what it is supposed to do especially well, like inventory control and dramatically increasing the speed and efficiency of service, it might be a great investment even if it is expensive to operate. And a bad POS system can cause more headaches than its worth. Seeing a fully-featured and very modern POS system being offered for "free" did turn my eye. If it was truly cost-effective and as feature-rich as it appeared, it could be a game changer.

Yes, Harbortouch is a game changer.

While it should come as no surprise that there are fees involved which make this placement far from "free," what the merchant gets in exchange definitely makes this system appear to be the best deal on the street. 

What you should know

Since Harbortouch is a processing company, you only get this POS system when you use it as the processor for your credit cards. This is just like a processor offering terminal placements to a merchant. The good news here is that Harbortouch offers flexible and competitive pricing, including Interchange Plus accounts, and sales agents have the ability to modify these for less profit to the processing company, which is why I was willing to consider even looking at Harbortouch as a processor. If I can set up a processing account with Harbortouch under the same exact terms I would use through one of my other providers, then this requirement is no longer a disadvantage. The "Free" Harbortouch POS system has three main fees associated with it in addition to the processing fees. First is the monthly fee of $69.00 per station for the service agreement, which includes all software upgrades and updates for the system and any software license needed. Second is a quarterly fee of $59.00 per station which covers a lifetime warranty for the system and unlimited tech support and customer service on both the hardware and software. The third fee is the one-time shipping charge of $25 per station for standard ground UPS delivery. While the monthly and quarterly fees certainly add up, they are right in line with what many POS system providers charge for the same service, on top of the cost of the equipment. In fact, some tablet-based POS systems charge the same amount for far less functionality. The other thing that you need to be aware of is that Harbortouch requires a 5-year agreement to offer this POS system. Now, any merchant who is going to lay down the money for a high-end POS system should be planning on a long-term investment, because these are not items that are changed like bed sheets. They are integral to the functioning of the business once they are installed and, as such, are intended for the long haul.

Cost comparison

When put up against the purchase price of the competition, which totaled $10,984, and included a 3-year warranty, it appears appropriate to look at the costs of Harbortouch in two ways. First, the period of the competition's warranty: the comparable Harbortouch system would cost $9,576 over the first three years. This means that, aside from having several thousand additional dollars potentially available in working capital over that time, it also means much less in interest on borrowed funds or potentially earned interest on saved capital. But it is important to also look at the true cost of the POS system over the 5-year term, which for this 3-station setup totals $15,960. It is also important to understand that this includes hardware and software support and warranties, something that the other system would be without, and could potentially save thousands in equipment replacement or upgrades. The bottom line is this: over the cost of the life of the "service agreement" for the competition, Harbortouch comes out somewhat cheaper. Over the life of the agreement with Harbortouch, it is somewhat more expensive, but within the range of expectation on additional costs incurred after paying off the other system, and still far less than many other systems cost. But this isn't the whole story. You have to also look at what else you get for the money, that you do not get at all in the comparison POS.

What you get, beyond the POS functionality

Harbortouch offers a terrific POS system in terms of its basic functionality. When doing the price comparison, I looked at a system that offers the same basics. Both were modified for the hospitality industry, which I feel really gets to the core of why POS systems work for a business. Both systems network seamlessly between stations. But Harbortouch has a few components that really push it forward in both usability and future functionality.

The Lighthouse back office interface is an amazing way for management to take control of the business. It is the cloud-based component of the POS system that truly separates Harbortouch from some of the competition. While not requiring a wholly cloud-based setup, which I feel is potentially detrimental in the instance of connectivity issues and which is one of the reasons that I shy away from many tablet-based POS options, the individual stations do connect to the cloud in real-time and allow constant monitoring and updating from the cloud-based database. This allows for very easy updating on inventory, for example, as well as running reports on about 80 different categories without having to be inside the physical business. The range of report options, in and of itself, is quite remarkable and comprehensive, including sales and inventory reports, credit card processing statements and deposits, employee tracking and more. And it also allows the user to edit menu items and pricing, live, from anywhere with an Internet connection.

Tabbedout is a new function integrated into the Harbortouch POS that allows customers to make secure payments from their mobile phones. The free app works with iOS and Android, allowing patrons to open a tab on their phone, view it in real time and pay it anytime, anywhere. This kind of technology integration takes the system to a new level, and sets the bar pretty high for expectations from the company. What's truly cool about this app right now, however, is that it is a two-way experience, allowing customers to leave feedback and allowing merchants to send personalized offers directly to the customers they choose.

Harbortouch Tableside works with an iOS app that allows servers to enter orders using an iPad. The app interface mirrors the Harbortouch POS and orders are relayed directly to the kitchen or bar when input at the table. Harbortouch does not provide iPads, however it is possible to envision cutting down costs by using only one actual station with the cash drawer and having multiple iPads used throughout the establishment. In this instance, of course, there is an upfront cost on iPads with no warranty, but the potential for thousands of dollars in savings. Opening the Tableside functionality costs $39 per month and supports five iPads (with additional iPad support at $12 each). (Example: our 5-year cost for three stations would be reduced to $7,660, or $8,300 less than the three terminal setup compared above. I think that can justify the expense of a few iPads.) And as an exciting bonus, this functionality also includes access to the online reservation system that allows customers to make their dining reservations on the restaurant, bar or nightclub's web site, with that info being automatically synced with the POS reservations function.

Final analysis

While I cannot quite call it a "no-brainer," because every merchant has specific issues that must be addressed and very specific needs specific to how that merchant likes doing business (heck, some still insist on taking only cash and using a handwritten ledger!) or integrating pre-existing components, I do think that the Harbortouch POS system offers the best combination of tools and service in its league, and certainly with the most cost-effective terms for most merchants. The company appears committed to expanding the functionality of the POS systems and is a large enough company that it is going to be around long enough to provide the service it is selling for the life of the equipment. Operating since 1999, offering service to over 100,000 merchants and processing in excess of $9 billion annually, Harbortouch appears to be a stable service provider. If this is something that you are interested in exploring, please feel free to contact me directly or, if you have general comments, please feel free to leave them here.