Six POS Best Practices for Selling Lottery
A recent report revealed that about 105.6 billion dollars of lottery tickets were sold in the United States in 2021. That reflects a 14% increase over 2020’s total. Most of these sales were through convenience stores. For owners of convenience stores, selling a high volume of lottery presents challenges and risks, especially considering that the average gross margin on lottery is only 6%.
Theft or mismanagement of lottery inventory can quickly lead to huge losses. In our last blog post, we discussed the importance of closely monitoring and reconciling lottery sales and inventory on a regular basis. This post focuses on another, equally important aspect: how to properly configure and use your Point of Sale (POS) system to sell lottery tickets.
Convenience stores that sell fuel account for 82% of the market, and typically use POS systems like Gilbarco, Verifone, or NCR Radiant. Stores that don’t sell fuel. such as liquor stores, use a wider range of POS systems including NCR, Clover, NRS, and many others. The best practices below can be applied to each of these POS systems.
Why Do You Need Best Practices When Selling Lottery Through a POS?
The goal of establishing best practices for using a POS system to sell lottery tickets is to improve the tracking and transparency of the lottery category. This will help to:
- Reduce instances of theft and other forms of loss.
- Reduce time spent on accounting and investigating issues.
- Make it easier to know the health and margins of your lottery category.
Best Practices For Selling Lottery Using a POS System
#1. Use Separate Department on the POS to sell Scratchers and Online Lotto
Ideally, when using POS to sell lottery tickets, you should create separate departments for scratchers and online lotto. Scratchers and online lotto (megamillions, powerballs, etc.) are fundamentally different products. Separating them makes tracking easier.
#2. Have A Separate Department For Lottery Payouts
The cash you pay to customers that have winning tickets are called payouts. Although some stores use a generic department for all payouts, this lumps lottery payouts with unrelated ones, such as payouts to food vendors. Lumping all payouts into one department makes it difficult to detect erroneous payouts.
#3. Scan Scratcher UPC Codes During Sale
One of the best practices for lottery pos systems is scanning the UPC code on scratchers during a sale. This allows stores to reconcile scratchers on a per-game level, making it possible to accurately investigate and find the root source of shortages in inventory. Instead of following this best practice, some stores use a generic SKU to ring up scratchers (e.g. $1 Scratcher Ticket). These stores can only reconcile their scratchers by denomination ($1, $2, $5 tickets, etc.), or the entire scratcher category, and cannot easily investigate shortages.
One of the main reasons why some stores use generic SKU’s is to avoid having to add newly released games to their price-book. But with LottoShield, this is done automatically for you.
#4. Have Employees Take Inventory At the Beginning and End of Every Shift
Some stores take inventory once per day (usually at night before closing or in the morning before opening). This is not a best practice because it makes it difficult to pinpoint an issue within a specific shift or employee.
This is why it is best to have employees take inventory at the beginning AND the end of each shift. An employee can use a paper-based lottery inventory spreadsheet, or an automated tracking system like LottoShield to track lottery inventory.
When you go this route, it’s easy to assess every shift’s performance. Now you can see who’s doing a good job, and who needs training.
#5. Teach Employees to Collect Cash Before Distributing Lottery Tickets
There are instances when customers take their lottery tickets and run off. Some may even change their mind about purchasing the tickets. Others may just not have enough money.
A problem arises when the tickets have already been removed from the case before payment is collected. Placing the tickets back into the case is not easy, so they often get placed aside, where they can be stolen or lost.
Train your employees to collect payment before removing scratchers from the display case or printing online lotto tickets.
#6. When you Receive a Shipment, Immediately Enter Pack Numbers into a Spreadsheet or Back Office Software
For proper record keeping and tracking, enter pack numbers into a spreadsheet for every pack you receive. If you don't have an up-to-date list of packs that were delivered to your store, you can lose an entire pack and not even know about it.
To track your packs, you can use a log sheet, or many back office software systems. You can also use LottoShield, which tracks your packs for you automatically by scanning your invoices from the state lottery.
Now you know some best practices for using a POS system to sell lottery tickets. Whether you are a large operator with hundreds of stores, or a single-site operator, following these best practices will help you keep your lottery margins high, your losses low, and reduce time spent on investigating issues.