What Is a Point of Sale POS System? Complete 2024 Guide

All feedback, positive or negative, helps us to improve the way we help small businesses. Now that you know the definition of a POS system, how much it costs, how to use one, and the ways POS can benefit your small business, you’re ready to begin shopping. Many systems require you to purchase your POS hardware from the POS vendor, while others let you source your hardware yourself or use components you already have from a previously used system. A POS system will also help you keep your inventory organized and track what items are top sellers.

POS systems consist of both software, like the program or app itself, and hardware, like a touchscreen computer, barcode scanner, and receipt printer. Businesses that operate entirely online and have no brick-and-mortar location generally don’t need POS hardware. Their point-of-sale is their website, so they need a payment gateway, an online shopping cart or other e-commerce software. With the proliferation of low-priced touchscreen tablet computers, more restaurants have implemented self-ordering through a tablet POS placed permanently on every table. Customers can browse through the menu on the tablet and place their orders which are then sent to the kitchen. Most restaurants that have iPad self-order menus include photos of the dishes so guests can easily choose what they want to order.

Lightspeed, for example, offers premium onboarding, account management and other services to help you get the most out of the software. Lightspeed also provides 24/7 support so you can get in touch with us at any time of the day or night. If you reward shoppers for their purchase, then your checkout process would involve a loyalty component, in which you ask customers to provide their details. This could be their email, phone number, birthday, or whatever info you use to track your loyalty program members.

In hotels, POS software allows for transfer of meal charges from dining room to guest room with a button or two. If you’re ready to start looking into which POS system is right for your business, fill out our quick and easy form to get bespoke quotes from leading suppliers. You’ll be under no obligation to get started with any of the providers, and it’ll only take a few minutes. Mobile-friendly solutions will be especially useful if you’re operating on the move, whether you run a food truck, kiosk, or Farmer’s Market stall.

To find and compare prices for your business-specific needs you can use our free comparison tool. If you’re able to function on minimal hardware, check out our guide to the best iPad POS systems. Before completing the transaction, your bank may also contact you to confirm if you want to proceed with the payment. Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance.

If you prefer to peruse information at your own pace, then keep these documents handy so you can reference them when needed. As items are added to the sale, your POS system is busy tracking and recording those quantities in the background, and it updates your catalog accordingly. Receipt printer – If you provide physical receipts to shoppers, then you what is the meaning of pos need a device to print those receipts. When connected with your POS system, the printer will automatically produce a receipt when the transaction is complete. Retail stores come in all shapes and sizes, but if there’s one thing every shop needs, it’s a solid point of sale (POS) system.

Financial Services

This is done across all touchpoints, which means a swift checkout process can be achieved while providing a seamless payment experience. A POS transaction debit refers to a payment made using a debit card through a POS system, where the customer authorizes the transfer of funds from their bank account to complete the purchase. If you’re shopping for a POS system, PayPal Zettle can help streamline transactions and business operations. You can then use this data to launch personalized marketing campaigns and distribute special offers based on each customer’s interests and preferences.

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So, if the customer purchases three pairs of socks, then your POS will update the quantity of that item so you always have an accurate record of what you have on-hand. The POS system is certainly a critical part of the checkout process, but let’s not forget that it also plays an equally important role in the back office. We just covered the different components of a point of sale solution; now, let’s look at how they all come together. By providing feedback on how we can improve, you can earn gift cards and get early access to new features.

With a Point of Sale system you can quickly and easily move from task to task as prompted, while being notified with alerts when inventories need restocking or employees need to be scheduled. Naturally, this boosted productivity will also have a knock-on effect on a store’s revenue, which is more important than ever in 2024. This means if you’re new to the software and require real-time support, providers like Square will be better at meeting your needs. Meanwhile, a salon POS system needs to be able to track appointments months into the future, while a system designed for use in a bar or busy cafe needs to run incredibly quickly to keep customers happy. When deciding which POS features to prioritize, we’d recommend understanding your business’s unique needs and working backward from there.

Good POS system features

1. The faster a sale is completed the shorter the queue time which improves customer satisfaction, the less space it takes, which benefits shoppers and staff.
2. For instance, a POS system might work smoothly on a test database during the review but not when the database grows significantly in size over months of usage.
3. At the most basic level, POS software enables you to calculate transaction amounts, track sales and monitor inventory.
4. In this ‘What is POS’ guide, we cover everything you need to know about the versatile sales device, including how they work, how much they cost, and which systems performed the best in our research.

A favorite of small-time vendors everywhere, this company offers free POS apps. In addition, they sell the all-in-one hardware component you’ll need to run their app. While this isn’t a comprehensive list, it’s a fast at-a-glance look at the POS vendors that performed the best in our independent research.

The availability of local processing power, local data storage, networking, and graphical user interface made it possible to develop flexible and highly functional POS systems. Cost of such systems has also declined, as all the components can now be purchased off-the-shelf. Retailers and marketers will often refer to the area around the checkout instead as the point of purchase (POP) when they are discussing it from the customer’s perspective. This is particularly the case when planning and designing the area as well as when considering a marketing strategy and offers. Lightspeed’s business management features give Square a run for its money and unlike our frontrunner, the POS offers a dedicated training mode, making it easier for new workers to get started on the system. If you regularly shop at Starbucks or Safeway, you probably carry their loyalty card around wherever you go.

What is a POS System and How Does a Point of Sale System Work?

Similarly, the format of a POS can affect profit or buying behavior, as this gives consumers flexible options for making a purchase. Beyond simply processing payments, comprehensive POS software systems can also help manage other aspects of your company, including sales, inventory, and reporting. Needless to say, opting for integrated payments offers a much more favorable experience for both your team and your customers. When your POS and payment terminals are able to “talk” to each other, there’s no need for manual data entry, which means fewer errors and faster transactions.

Best for retail shops: Shopify

This usually means that the shopper brings the products to the checkout area, though some retailers can implement the checkout process on the sales floor. Payment processors charge a fee per transaction to facilitate credit card processing. The fee actually encompasses multiple fees divided among the credit card network, the bank that issues the credit card and the processor. Payment processing fees follow either a flat-rate pricing model, based on a percentage of the card payment amount plus a flat fee per transaction, or an interchange-plus model. In some countries, credit and debit cards are only processed via payment terminals. Thus one may see quite a number of such terminals for different cards cluttering up a sale counter.

Francesca Nicasio has been writing about retail and hospitality for over 10 years. She focuses on producing actionable content pieces that helps retailers and restaurants improve their operations and bottom line. Having been featured in Entrepreneur, Forbes, The Huffington Post and other top-tier publications, Francesca stays at the forefront of industry trends, helping businesses adapt and thrive. These capabilities enable you to streamline your inventory management, reduce errors and optimize stock levels for maximum efficiency and sales. Having visibility into your retail data also leads to smarter marketing decisions so you can acquire and retain more customers. Just ask Wilfredo Rodriguez, CFO of Sunmed, which has multiple CBD stores across the United States.