Square Mastering PayPal's "Don't Tell Store Associates And See What Happens" Strategy

A Reuters story the other day spoke of Square shutting down its gift card service less than a year after it was launched. The move itself is not especially interesting in that it was a niche offering that didn't fit well with the typical retailers that used Square. (The only major retailer to work with Square—Starbucks—has its own giftcard program.) No, the interesting part was buried near the end of the story.

That's where it quoted Rocky Agrawal, payment and commerce analyst at reDesign Mobile, saying that the service "wasn't a very well thought-out experience" and that he had tested the gift cards at several merchants and at least half of the businesses did not know how to redeem them. "Merchants didn't know anything about that when I asked them," he said. Why does this sound so familiar?

We have repeatedly run into chains that roll out brilliantly planned payment or mobile offerings, but somehow forgot to brief associates. This is bad for an infinite number of reasons, but none more striking than the fact that associates are the primary interaction point with shoppers. When they see something new and unfamiliar, the associate is where they turn. When that inquiry is met with a baffled look and a pair of shrugged shoulders, that IT initiative is about to lose any shoppers—and IT may never know why. (They'd know if they asked associates, but if thought about asking associates, they would have had them briefed in the first place.)

The most blatant example of lack-of-associate training (or even a mild heads-up) came from a holiday PayPal promotion in December at large New Jersey mall. (Given that PayPal is a direct rival of Square, maybe both vendors have signed some sort of mutually-assured-destruction agreement to keep associates in the dark?) But Bloomingdales did the same with a CRM application and Target made sure that it's call center people had no clue about a key promotion.

Target gets extra points for issuing a news release—setting in motion media coverage that might accidentally tip off shoppers to a program's existence—and still keeping all associates and call center people in mushroom mode. When customers ask about an announced program and associates and store managers are oblivious, it's hard to be sympathetic when the initiative fails or underperforms.