Point of Sale (POS) Systems

Have you taken full advantage of the benefits of point of sale (POS) systems? There are few tasks as important to a retail business as selecting the right point of sale software. The payment options offered, the speed of the transaction, and the ability to tailor the transaction to the customers’ needs each have profound impacts on customer satisfaction and your overall business success. Discover what POS features you need to boost your retail profits in this article.

What Is A Point of Sale (POS) System?

A point of sale (POS) system handles the payment collection, receipting, and inventory updating involved with a retail sale in real-time at the point of purchase. A POS system will scan items at checkout, calculate the amount owed, and prepare an invoice that a customer can pay right away via credit card, cash, or check.

Some POS systems are all-inclusive and include bundled hardware, such as an iPad or a fully operating cash register, barcode scanner, and credit card swiper. Other POS software options can operate as a web-based software via a web browser–allowing you to use whatever computer or mobile device you are familiar with.

Critical business benefits enabled by point of sale systems include:

• More accurate and timely retail accounting based on the ability to integrate POS functions with core accounting applications
• Improved customer satisfaction based on more rapid checkout experiences
• Increased sales revenues supported by more effective promotions management and the delivery of cross-sell/upsell recommendations to retail staff
• Reduced stock management costs as a result of automated inventory count updates following customer transactions

Features of Point of Sale (POS) Systems

• Payment processing: Set up a merchant account and accept a variety of payment methods from customers. Support payments in multiple formats including cash, credit card, check, gift card, and others.
• Refunds and return management: Evaluates item conditions, restocking, and issuing refunds/credits
• Receipting: Documents transaction details, often in a variety of receipt formats
• Customer loyalty/rewards programs: Allow customers to accrue benefits or store credit based on order histories or other factors and can be used to improve customer retention
• Promotions management: Manage discount deductions item/customer eligibility checks and with automated cost calculation
• Item look-up: Allow cashiers to check on item availability from a POS terminal
• Customer database: Track contact information, buying histories, and other factors
• On-account sales: Allow customers to receive items immediately and make payment on an issued invoice at a later date
• Age verification: Verify age for items such as alcohol and tobacco
• Gratuities management: Allow for customers to leave tips and provide support for gratuity calculation and reporting on compensation distribution
• Online payment integration: Enables the use of services such as a PayPal, Venmo, and Apple Pay

Benefits of Point of Sale (POS) Systems

Point of sale represents the area where retail businesses conduct their data entry. From moving customers through the checkout line to automatically integrating with back-end financial management systems, point of sale systems provide powerful tools to improve productivity.

Point of sale software opens up a host of other major business opportunities:

• Real-time access to accurate inventory counts
• Automatic integration with accounting software
• On-the-spot upsell recommendations
• Improved markdown and promotions management
• Tighter controls for return authorizations
• Customer info tracking for ongoing marketing
• Product sales trending
• The list goes on…

Improve Your Investment Returns With POS Systems

The recent years have also been kind to retailers eager to improve their technology advantage at the counter, but concerned about the cost of doing so. Three big factors have contributed to lowering costs and improving ROI rates for investments in POS systems:

1. Cloud-based, SaaS options mean retailers can spread costs over time, rather than make a large capital expenditure on a new system.
2. An increase in the number of POS providers developing software is creating price competition while allowing for tighter targeting of niche industry requirements–limiting the need for expensive customization.
3. Mobile apps have turned phones into portable payment kiosks, minimizing hardware requirements, while enabling retailers to take the transaction from the counter to the sales floor and beyond.

Automate the Retail Counter Experience With POS Systems

Accurately inputting items sold, quantities, and price can be automated in a number of different ways. Many point of sale applications allow for barcode scanners as a way of transmitting information about the item being purchased. Whether the information is gathered through touch-screens, bar codes, or manual input of item codes, POS systems will associate the item and quantity input with a per unit price.

Point of sale systems are also responsible for summing the total of all items and providing a balance due figure. Errors are more likely with manually calculated balances as opposed to those derived at automatically by software. Also, the ability to create line item records for every item sold is a first step in preventing fraud and theft.

Track Buying Trends With A Point of Sale System

An often-overlooked capability of a point of sale system is the ability of intelligent software to assist in promoting increased sales volumes. The point of sale offers a tremendous opportunity to get to know your customers and to appeal to their consumer needs. Detailed sales histories let you see firsthand what your hottest sellers are and which products are not moving as fast as you’d like. Understanding the buying trends of individual customers further helps target sales opportunities–provided the information is shared with the right employees at the right time.

Access Key Point of Sale Reports

Point of sale systems capture data critical to making solid business decisions. POS systems can be integrated with inventory software to deduct items from inventory as they are sold. Understanding precise inventory stocks and the rate of sales on products allows retailers to make good decisions on when to re-order items. Ordering stock wisely means ensuring availability without tying up cash in overhead expenses.

Enable Multiple Payment Options

The cash only retail business is quickly fading into obscurity. Today’s consumers expect uniform access to the payment method of their choosing. Point of sale systems help to accommodate this business reality.

Point of sale system modules easily allow credit card processing and are built to easily receive input from credit card swipers. While credit and debit options have reduced the number of checks being written, many customers still expect the option. Payment by check has historically offered an opportunity for fraud and lost revenues, but modern point of sale systems have introduced security tools to help minimize this possibility.

Many point of sale applications can integrate with check reader hardware and check verification services. Of course, virtually all point of sale systems require the ability to support cash transactions. Tight integration between the point of sale software and the cash drawer is a must.

Point of Sale Hardware Integration

Most point of sale experts recommend choosing software and basing the decision on what hardware to use off of the software system, rather than vice versa. The basic reason for this is that the software provides the intelligence in the system and will have more specific requirements about which hardware devices can be integrated.

Typical hardware needs for POS set-ups include:

• Credit-card swipers
• Computer terminals
• Monitors
• Bar-code scanners
• Receipt printers
• Touchscreens
• Computer peripherals such as keyboards and mice
• Cash-drawers