A point of sale (POS) system is a more modern word for what used to be the simple cash register at a checkout stand. In retail terminology, the point of sale is the moment when the customer brings his or her goods to the checkout stand to pay for them. The point of sale equipment takes care of the transaction. POS systems include the software and hardware associated with this process and the bundled features that come with it.
You can find point of sale equipment designed specifically for clothing boutiques, or specifically for grocery stores. How might they differ? The POS system designed for a grocery store will probably have an integrated scale for weighing produce, among other things. The use of a well-chosen POS system improves business efficiency by lowering business costs, improving service, and making the purchase a simple, straightforward transaction.
The electronic cash register is a basic piece of po int of sale equipment. It rings up the goods and prints a receipt. When it’s closing time, the cash register can print out a daily report to reconcile the till and prepare money for deposit. More advanced POS systems can make more detailed reports and let users look up archived reports and generate monthly and yearly reports. Many POS systems have inventory management software to track merchandise, and some incorporate time cards and credit card verification.
POS hardware usually has display screens for clerk and customer, a drawer for cash, a credit card reader, printer, and barcode scanner. The hardware may be further specialized for the particular industry it serves. For example, a restaurant POS system may print orders directly in the kitchen to make ordering more efficient. Touch screen POS systems are another variation on point of sale equipment. Believe it or not, as far back as 1986, a New York cafe owner named Gene Mosher used an Atari ST computer and N eoChrome, an early bitmap graphics editor to create and sell the first graphical touch screen POS software.
Why would a restaurant want a touch screen POS system? There are many reasons. They are easy to train the staff to use, and wait staff can learn to take orders in just a few minutes. Restaurant menus can be customized, and touch screen POS systems can print reports that will let the restaurant manager know what is selling and when. Restaurant POS touch screen systems can be outfitted with remote printers that deliver orders to the kitchen after they’re entered in the system.
They can be made to automatically calculate tips for tax purposes and can be used as time clocks for employees. They can also be made to track inventory. A relatively new innovation in restaurant touch screen POS systems is wireless POS. Restaurants with high volume can use these to collect orders and send them to the computer server. The computer server sends the appropri ate information to the kitchen in real time, shortening the interval between ordering and serving the food.
When it comes to retail, there are even more reasons why touch screen point of sale equipment can be the best choice. Store owners can design the receipts to print a logo and change the size of the information on the receipts. The system can be programed to add “smart coupons” at the bottom of the receipt, either randomly, or based on the items the purchaser chose. POS systems for retail also make it easier to track bad checks and to use gift cards and track their balances.
Some touch screen POS systems even include integrated video surveillance, track employee commissions, print discount cards, and create user-definable discounts, such as buy 2, get one free. The magnetic strip on credit or debit cards and the card reader on a POS hardware system work basically the same with every credit or debit company. During this type of transaction, the merchant swipes the card through the terminal, and the terminal processes the credit card transaction.
Many POS software applications have been written for Unix and Windows platforms since the 1990s. With the advances in computer hardware during that time, programmers could develop flexible POS systems. Today, all components necessary can be purchased right off the shelf. Modern POS systems (including touch screen point of sale equipment) must have high speed, excellent reliability, an easy user interface, remote support options, relatively low cost, and comprehensive functionality. A top touch screen POS system for retail (such as for Target or other large retailers) costs (in 2009) around $4,000 per check-out lane.
Retailers and vendors are now working to standardize computerized development of POS systems to simplify communication between POS devices. Two standardization initiatives are OPOS and JavaPOS. Both conform to standards set by the Natio nal Retail Foundation. OPOS is actually a derivative acronym, with the “O” standing for “object linking and embedding,” and POS standing for “point of sale.” It was the first common standard, created by Fujitsu-ICL, Epson, NCR Corporation, and Microsoft and was released in 1996. First released in 1999, JavaPOS was created by Sun Microsystems, NCR Corporation, and IBM. It is largely platform independent.
POS systems can choose from a number of communications protocols to control peripheral devices like printers. There are about as many proprietary protocols as companies making peripherals. Fortunately for the modern retailer, most POS peripherals like printers and displays support a number of command protocols so that they work with many brands of POS terminals and computers. More recently, web-based POS software can be used on a computer as long as it has an internet connection and a browser that’s supported, without any software installations or the requirement for manual updates. The software is hosted on secure servers with back-ups. Because they are now quite fast, the lower cost makes web-based POS a viable option for small retailers.
POS software does numerous tasks: totals sales, figures sales tax, calculates change, and automatically adjusts the store’s inventory levels appropriately. Software for touch screen POS systems varies broadly in features and capabilities. Therefore it is very important that retailers evaluate their needs thoroughly before making selection decisions. Owners of independent boutiques won’t need the kind of inventory management suitable to a multi store chain.
A “baseline” POS system (whether a touch screen POS system or otherwise) should handle sales, manage the inventory database, operate a barcode scanner, and allow easy queries of inventory and sales. It should be able to search the inventory based on item description, stock keeping unit (SKU – a unique ID that retailers assign to all items they carry), vendor, and various keywords. Keyword search is very important, because without it, all employees have to know and memorize exact SKUs for every product, which is unrealistic.
Because data storage is so inexpensive these days, POS software should be expected to track and record date and time of every sale made in your store. It’s useful for many different analytical tasks. Retailers can look at whether sales rise or fall for seasonal reasons or because they are simply a trend that is over and done with. Sometimes surprising trends emerge, and POS software can help retailers tease them out from the data.
Retailers buying their first point of sale equipment must ensure that they can export information in a format that’s universal. This is a way of planning ahead for a time when the system must be upgraded or replaced. With universal export, retailers can move their entire inventory data and sales history to a new syst em seamlessly. Tips for purchasing a first touch screen POS system include buying from a reputable company with a decent track record so as to avoid “orphan software” that can result in headaches and unplanned expenses.
Touch screen POS systems and other point of sale equipment have become an indispensable part of modern retailing. A poorly designed or poorly supported POS system can be a daily headache and slow down sales. A good POS system, on the other hand, that fits in well with the retailer’s needs can be as valuable as a highly competent employee. Therefore, thoroughly researching point of sale equipment before buying is a critical step for retailers, whether selling custom truck floor-mats or gourmet champagne brunch.