What is POS? What does it mean to be the point-of-sale? What forms does point-of-sale take?
Today, we’re keeping it simple and evaluating the definition, roots, and goals of point-of-sale. You may be surprised to learn that 56 percent of single-store retailers are still using pen and paper, calculators, or Excel sheets to track their purchases – so unfamiliarity with POS is not as uncommon as you may think.
What is POS?
POS is an acronym that stands for point-of-sale. It’s also seen spelled without the hyphens: point of sale. It can also be known as POP or point-of-purchase. There are also lots of uses for the acronym, “Positively Outstanding Service” being one of them, and one more recently emerging one that is less pleasant (millennials will get this…).
Now that we know what the acronym actually stands for, let’s talk about the reason that it exists. Point of sale its most simple definition is the point where a transaction is performed. I say performed, and not completed, because not all transactions are necessarily “completed”, they can be cancelled or aborted halfway through. Either way, the POS is where you are performing a transaction – purchase, refund, or void with a variety of payment methods.
The point-of-sale is essentially a fancy calculator. Different tiers range from single unit to Enterprise, indicating how fancy or complex of a calculator you are getting. The device associates an item or service with a dollar value to a transaction, (sometimes) applies taxes, and generates a total that the customer will pay.
For modern business operators, the idea of operating without a POS is mind-blowing. These solutions end up being a core business component that produces reports, encourages security, drives business decisions and allows operators to learn about customer behaviour.
What forms does POS take?
In 1973, the first computer-driven cash register was developed by IBM. You’ll now find point of sale in many forms, as it continues to evolve. It could be as simple as what I mentioned earlier (a fancy calculator) – to an e-commerce checkout. This evolution can be tied closely to the development of credit cards, and increasing use of virtual and/or contactless payment methods.
Point-of-sale can be found as:
- Terminal POS: fixed terminals, typically found on the counter at a business
- Mobile POS: handheld devices such as tablets
- Self-Serve POS: kiosks for self-ordering
- Online POS: online check-outs and e-commerce engines that power web-based sales
With all that background information, POS technology might sound like a no brainer for any business. However, as we know, there are still many businesses operating without it. What is the hesitation and what are the core “disadvantages” that people associate with POS?
- Cost: Small businesses, in particular, are often reluctant to implement technology out of fear of it being too expensive. You’ll be surprised to find that POS can be incredibly cost effective, and even better: it can help prevent theft and allow you to manage inventory properly, leading to savings. Before ruling it out, spend one hour on Google reaching out to POS providers. You will be pleasantly surprised at the ROI that can be generated from even the most simple of solutions.
- Hardware: Once you implement a solution that may have a hardware component, yes, you are opening yourself up to the chance that hardware will fail. However, many providers provide warranties. As you are searching for a POS partner, include asking about hardware warranty as part of your checklist. Whether it ends up being a Premium Hardware Warranty or a manufacturer’s warranty, you’ll be glad you did.
- Security: Interestingly enough, some locations feel like adding technology opens them up to breaches or higher risk of being hacked. However, the benefits to your security that POS brings outweigh the risk posed by adding internet or credit card processing, assuming you do it correctly. Select a partner that is PCI-validated, offers point-to-point encryption of your credit card data, and prioritizes cash drawer security to help ease any worries in this area.
- Updates: Implementing a new software tool does mean that there will be upgrades and maintenance involved. This can be intimidating, depending on the partner that you select. Asking the partners that you are evaluating about their upgrade process is important. Be sure to clarify what resources are required, whether in-person support from the vendor is necessary, what downtime (if any) may occur, and what costs are associated with upgrades and updates.
What is the goal of a POS system?
Ultimately, the goal of a POS system is (or should be) to help improve business efficiency and improve your bottom line. This means shortening lines, improving accountability, increasing visibility into operations, encouraging upsells and promotions, and fueling your business’ growth. However, every business is unique and prior to investing, start with what is keeping you up at night to help you find the best POS partner for your business.