Every business retailer needs a way to record sales, collect money and create receipts as they sell items or services to their customers. In today's increasingly efficient business environment, retailers can use several types of POS systems to simplify sales transactions while also utilizing additional accounting and business planning features. Before choosing a POS system for your business, it's best to research the different types available and select one designed with the industry-specific features that will most positively impact your business.
POS Systems Defined
In short, POS stands for point of sale and represents the moment when a customer makes a purchase of any type. In the past, this would have included the physical space where the purchase was made, such as at the front counter by the cash register. Today, points and locations of sales are more fluid and can take place anywhere in the store.
In modern business terms, a POS system is the hardware, software and payment processing system that can accept payment and divert money to your bank account. Many POS systems and providers also offer sales data analysis and accounting integration to further assist business owners in recording and tracking their sales and inventory information.
Types of POS Systems
Cash registers could technically be considered a POS system, but in the strictest sense they don't measure up. While they certainly are a tool that's used to complete a sales transaction, most don't contain both hardware and software, don't handle credit card sales, can't manage inventory and can only offer basic data on completed sales. Contemporary POS systems instead offer more advanced features including:
- Online order processing.
- Integrated tracking of inventory and sales data.
- Integrated accounting and tax payment software.
- Sales processing for mobile vendors who are on the go.
- Integrated scales for weighing products.
- Built-in loyalty program features.
Additional Hardware Options
In addition to the POS system software you choose and the card reader payment-processing hardware you're utilizing, you may wish to include some other items. Not every customer will prefer an emailed receipt, so a printer that provides a hard copy as an option is a good choice. In addition, if you have a high volume of products in-store, a bar code scanner will speed up the checkout process. These can be linked to your inventory system and keep track of diminishing stock with each sale.
Finally, it's important to have a cash drawer for customers who wish to use that option for their purchase. These can also be connected to the POS system to open as needed yet be secured when not in use.
Hospitality Businesses Require Special Features
When it comes to bars and restaurants, the benefit of purchasing a sales system far outweighs what the restaurant POS system costs because they're specifically designed to improve the customer experience and help servers accomplish routine tasks more efficiently. Orders can be taken table-side on a handheld device and sent to the kitchen before the server even leaves the table. Customers can be moved through the dining process at a more efficient pace, thereby reducing wait times for the next seating. Ultimately, this also increases the number of sales for the restaurant during any given evening.
When the meal is completed and it's time to settle up, customers can pay for their meal right on the handheld credit card processing device, add a tip and have their receipt emailed to them. These specialized systems can also easily split tabs between members of a large party, making end-of-dinner bill calculations a thing of the past. Tabs can also be held open from the bar, transferred to the table and paid in one single transaction.
A restaurant that takes orders and serves from the counter may use a terminal type of POS system. Software on these devices can be programmed to include menu items that can be ordered with the push of a button. Customers can pay for their food by swiping their card into the same terminal, adding a tip and signing for their purchase if required.
Salon Systems Coordinate Complex Schedules
Since many customers at salons and spas make appointments for their beauty needs, POS systems that cater to these businesses utilize scheduling software to allow customers to make appointments through the business website. Available time slots are filled and integrated into the master schedule. If a client is booking several services and multiple clinicians, the system can handle the complex scheduling needs.
Salons can also increase their sales as they use their POS system to spearhead their marketing efforts. By integrating their customer profiles to social media accounts, beauticians can push out updates, specials and photos to their clients. This informal marketing can be a great way to increase exposure and expand a client base.
POS Systems for Mobile Users
Business owners who sell to customers on the go or in a non-fixed retail spot need a POS system that moves with them. One of the most popular systems is Square, which includes software that's housed either on a terminal or an iOS or Android device. A small square card reader can then be attached to the smart device and used to complete sales transactions.
Square allows the user to swipe a credit card and sends the card information to the appropriate financial institution for processing. Receipts can be emailed directly to the customer, eliminating the need for paper receipts. Some of the business owners who might find Square most useful are:
- Artisans who sell at craft shows.
- Breweries or wineries selling at community fairs.
- Plumbers, landscapers or others in the home repair industry.
- Piano tuners or mobile pet groomers.
- Business owners operating in remote areas with intermittent internet.
Another benefit of this POS system is that it can be used in offline mode. This means that if an internet connection is lost or unavailable, sales and card information swiped into the reader can be stored in the system and fully processed later. Invoices can also be sent to customers using this system.
Retailers and POS System Business Management
Retailers who use a POS system designed for their industry can utilize many of the business add-in features that help them manage other aspects of their business. For example, sales and inventory systems are integrated so that managers can easily keep an eye on inventory levels and place orders when levels get low. Sales analytics are also available in many systems. These components can tell owners which products sell best, on what days of the week certain items move and which employees are selling which types of products.
Customer profile information can also be gathered because sales information is stored within the system each time a payment card is used. Retailers can learn about the customers' purchasing preferences, how often they buy and how much they spend during an average visit to the store. This sales data can then be used to tailor marketing and incentive programs.
Some systems also help retailers to manage their staff. Employees can use the POS system to clock in and out, once again eliminating the need for paper or an additional resource.
POS Systems for Grocery Retailers
Other types of POS systems include those geared toward serving the retail grocery industry. At the grocery store, large quantities of items are typically scanned during each transaction and are linked to inventory — a key component in the industry. Integrated scales are also extremely important for weighing produce or bulk food items.
Grocery stores are also moving increasingly toward self-service checkouts, so terminals are being used not only by store personnel but also by customers. Point and select screens and bar code scanning provide a smooth experience for customers who want to get in and out of the store quickly. Stores also save money since the self-service option reduces the number of employees needed to maintain a checkout point.
The other growing trend in the grocery industry is the use of online shopping combined with either home delivery or quick pickup in the parking lot. Consumers can shop for their groceries online, place an order through the system, pay for their groceries and pick them up later in the day. A fully integrated POS system manages this entire process.
Storing and Accessing POS Data
Many POS systems operate in the cloud, storing data for their clients and making it easily accessible to managers from anywhere in the world. This is especially useful if a business operates several stores. The software in these systems is also frequently updated with new features that provide great benefit to merchants. However, some businesses may prefer to keep their data on an in-store server. Reports must be accessed from the server and any new features must be researched and added by choice. This method also requires that the business maintain its server integrity and security.
Loyalty Program Add-Ons
Another feature of many POS systems is the ability to sync a customer loyalty program or card to the system. Individuals' sales are tracked and customers can then be rewarded with discounts or gift items based on amounts they have purchased. This feature builds loyalty among the customer base and increases the number of return sales without requiring any extra work for the sales staff.
PCI Compliance is Crucial
Any business owner who accepts credit or debit card payments is required by law to keep the customer's financial and personal information secure. This means it must be stored and transmitted safely by encrypting data during transmission. When choosing a POS system, it's important that the provider can assure you that their system meets all payment card industry (PCI) compliance regulations. Most systems available today meet these criteria or are working to be fully compliant in an ever-changing security environment.
Similarly, business owners should take precautions to protect their systems from unauthorized entry by maintaining firewalls and antivirus software, regularly updating passwords and restricting employee access to sensitive data.
POS in Banking
In-store and online purchases are becoming a very streamlined process, so customers must stay on top of tracking payments made from their checking accounts or against their credit lines. When reviewing bank or credit card statements, purchases may appear simply as a POS sale. The statement may or may not identify the store from which the purchase was made, sometimes creating confusion or concern. If in doubt of any charge on your statements, always check with your bank or lending institution; they typically can identify the source of the charge, verify its validity or assist with a fraud claim.
- Fitsmallbusiness.com: 8 Best POS Systems for Small Business 2019
- Shopkeep.com: Choosing the Right POS System
- Businessnewsdaily.com: Best POS Systems for 2019
- Squareup.com: How to Choose the Best POS System for Your Small Business
- Lightspeedhq.com: What is a Point of Sale System? Here's Your Ultimate Guide
- Marketbusinessnews.com: What Kind of Businesses Use POS Software?