With POS Paper Supplies Vanishing, E-Receipts May No Longer Be Optional

Maybe digital receipts and coupons are something you need to start promoting—and fast. The second-largest supplier of POS receipt paper, Germany's Koehler, still plans to stop shipping paper to the U.S. in April, after a December ruling by the Commerce Department that will increase tariffs by more than 70 percent. That could translate into shortages and will almost certainly mean higher prices for thermal paper, which is used in most chains' POS printers.

U.S. and Chinese paper mills say they will eventually fill the shortfall from the U.S. exit of Koehler, which has been providing about 40 percent of POS paper. But in the meantime chain execs may be expecting IT to keep stores from running out of paper. Strange as it sounds, it is IT's problem—and the second-easiest option is digital receipts.

The easiest and most obvious fix is to print less on each receipt. Chains have been running a lot more paper through those POS printers in recent years (on a recent trip to one chain, a two-item cash purchase generated 17 inches of receipts and coupons). The problem: Receipts now contain both marketing pitches and legal boilerplate, including disclaimers and return/exchange policies, along with more transaction details than in the past.

As a result, just cutting back what's printed on the receipt now involves pushback from Marketing and an even tougher fight from Legal. Marketing is sure its offers and coupons are essential, but Legal can cite cases that were lost because of a missing disclaimer. Once those interdepartmental fights are resolved, you'll still need to test and push the new receipt format to store POS systems—and, if possible, delay going live with it until it's clear receipt paper is either too pricey or too scarce.

Your other options: getting customers to voluntarily leave without a receipt—Sears (NASDAQ:SHLD) and Kmart have offered that for a while—or ramping up your digital receipt efforts. If you're already doing digital receipts as part of a loyalty program, flipping the policy from "can receive E-mailed receipt" to "will E-mail receipt unless otherwise requested" may be enough to cut paper usage significantly.

You may still want to have cashiers hand each customer a barcoded mini-receipt, so if buyer's remorse kicks in before the E-mail receipt arrives they'll still be able to do a return. That also reduces concerns about shoplifting and fraud—at least customers will have something to show LP if there's a question at the door. That won't completely cut out paper receipts. But cutting them by 40 percent? That's doable.

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