What is the POS system?
The POS abbreviation stands for point of sale, and the POS system is a set of hardware and software components that enable merchants to accept payments from customers and track their sales.
In the past, the term "point of sale" applied to an actual place in the store, the counter where the merchant has a cash register. Today, it applies both to the counter of a physical storefront and to the online storefront, or digital checkout. Simply speaking, when a customer is about to buy something from your digital or brick-and-mortar store, they are at the point of sale.
Some people prefer calling it the point of purchase (POP) system, but the meaning stays the same regardless of the wording.
Who invented the point of sale system?
It isn't easy to name a single inventor of the point of sale device, given the fact it's a complex system having several significant milestones in its history led by different companies and people.
Let's begin by mentioning James Ritty, the inventor of the cash register, who developed it to register transactions at his saloon almost 200 years ago. In 1906, Charles F. Kettering gave Ritty's point of sale device a new life by adding an electric motor to it.
Then, in the early '70s, IBM developed an electronic cash register (ECR), a computerised POS system predecessor. A bit later, William Brobeck and Associates introduced the first microprocessor-controlled ECR for McDonald's restaurants. In 1986, Eugene Mosher presented the first graphical POS software with a touchscreen interface.
And not so long ago, in the 2000s, point of sale systems became available as software as a service and went mobile.
How does POS work?
These days, the process that happens at the point of sale consists of a few steps:
- A customer adds products to the cart, goes to the counter, or visits the merchant's checkout online.
- The POS system calculates the price for all the goods in the cart and updates the inventory count. In a physical store, it requires someone to scan the barcodes, while online this happens instantly.
- A customer pays with a preferred and supported payment method. The payment process depends on the chosen method and usually involves a bank that authorises the transaction.
- Once the payment is made, the POS system issues the digital or printed receipt and the merchant hands or ships the goods to the customer.
What can a POS system do?
Modern POS systems support the following functionality: payment processing, inventory management, sales tracking and report generation, team management, CRM, receipts issuance, and even digital tipping.
The particular list of features depends on the solution provider and the POS system model and should be taken into account before purchasing the equipment.
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What does a POS system include?
Digital POS systems for online sales are software as a service products developed to fulfil the aforementioned features. They need nothing but an Internet connection to work properly.
On the contrary, point of sale solutions for physical stores consist of software and hardware. The equipment modern POS systems include is the following:
- A monitor or a portable device to use the software.
- A bar code scanner to check product details and inventory count.
- A register that calculates and processes transactions.
- A card reader so that a merchant could offer the most widespread payment methods involving cards.
- A cash drawer, as many customers worldwide still prefer good old paper money.
- A printer to give customers receipts.
What are the benefits of a POS system?
As you could have guessed from the feature list above, POS systems bring many advantages to both the merchants and their customers.
First of all, this tool saves a great deal of time and requires less manual work due to the automation of tedious routine tasks, like stock management, reporting, employee scheduling, etc.
It also increases the checkout speed, resulting in an improved customer experience. The data your POS system may gather can provide you with precious insights into customers' preferences and behaviour patterns. It allows you to fine-tune your business accordingly and boost sales.
Besides, reputable POS systems provide enhanced data and payment security while being your reliable all-in-one tool for daily business operations.
Types of POS systems
The common types of POS systems include:
- Desktop POS system. It works as a desktop or browser application.
- Mobile POS system (mPOS). The portable version of the previous option works on tablets or smartphones.
- All-in-one POS system. It works on both computers and mobile devices.
- Self-service POS system. Somewhat similar to the first option but allows a customer to check out without the assistance of an employee.
Do I need a POS system?
If you're in retail, e-commerce, or hospitality business of any size, including a small business like stores and restaurants, the chances that you need a POS system are the highest. Earlier, a cash register may have fulfilled the needs of these industries, but today, you need more payment methods than just cash. Besides, modern businesses always strive to enhance customer experience by embracing advanced technologies of different kinds, and a sophisticated point of sale system is a perfect match.
Generally speaking, POS systems are used in enterprises with high requirements for the productivity and efficiency of the cash register. These are any trade enterprises, the throughput of which is quite high: supermarkets, shopping centres, markets, restaurants, hotels, etc. Convenience stores and small shops or restaurants need POS systems as well, but they usually use simple models with a minimal set of features, designed especially for a small business.
How to get the point of sale system?
First, we recommend analysing the activities your business performs and forming a list of requirements for your future POS system. Then, you need to explore the market of retail solutions providers and gather a pool of those offering all the features you need. It's worth reading the reviews from their current customers before deciding.
You're most likely end up with a few solutions to choose from. To make a final choice, hop on a call with each provider, ask all the questions you have. If they offer free trials, use them to test the solution and determine if it suits your business. By following these steps, you have all the chances to get the best POS system to run your business.
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