Payroll Deduction – Gaining Popularity in Corporate Cafeteria’s

Submitted by Steve Petty (Retail Project Manager)


A new form of payment is gaining popularity and sweeping the corporate world. An employee working in a corporate environment can take advantage of charging a meal in the cafeteria, or a prescription in the pharmacy or even a gift in the gift shop simply by swiping their Employee Badge at the POS.

Many employers have decided to offer charging at the POS with their Employee Badge Card, commonly known as Payroll Deduction. Many employees find that it’s a way of managing their expenditures at work, while others simply like the ease and simplicity of being able to charge vs. carrying money.

Food Service Vendors report an increase of revenue of 10% to 15% wherever the process is implemented. The ease of being able to satisfy one’s hunger simply by swiping a card is a temptation too strong to resist. In a very prestigious way, an employer is providing a benefit of “borrowing until payday”. While this helps the employee, the employer definitely reaps the sales increase because of the extended generosity.

The Payroll Deduction Transaction uses an employee’s payroll badge as the medium to prove authorization by capturing the Employee ID Number from the badge. Back Office Software compiles transactions using the Employee ID Number to insure accuracy and electronically communicates with the payroll software eliminating the possibility of hand keyed mistakes.

The payroll deduction process does not charge interest like a credit card; nor does it charge late fees. The payroll badge does not have a limit like a gift card. The payroll badge does not need to be re-charged like a cash card. If you are an employee in good standing, you are self policing because your paycheck will reflect only what you earned against what you spent. However, if there are abuses by certain individuals, charge limits can be set to their profiles.

The payroll deduction transaction keeps cashier drawer totals balancing better due to less cash handling and because it’s hard to steal from a drawer full of charge slips.

This type of system is currently being used in many hospital cafeterias throughout the country. Other entities within the hospitals such as gift shops and pharmacies and coffee shops are also using the system. Additionally, it’s making its way into many corporate environments that have a small window of time to process the lunch hour; the speed of the transaction with the Payroll Badge Card is excellent for this criteria. There is no delay in authorizing payment with a Payroll Badge Card.

We are also starting to see a lot of special uses for this type of system like tracking complementary lunches given to training employees. In some cases we are limiting certain items that are allowed to be complementary. There are other sites that require a lock out of one meal per mealtime. (I.e. Breakfast, Lunch, Dinner)

Regardless of the reason, Payroll Deduction is slowly becoming a standard mode of payment within cafeterias across the country and is winning the kudos of the Employers, Employees, and Food Service Vendors.