The point of sale (POS) can be referred to as a cash register or cash wrapper and is typically the location in a store or restaurant where transactions for exchange goods and services take place. A point of sale system generally refers to the physical electronic hardware and peripherals used to conduct a transaction. This hardware can include a cash register, a dedicated computer, or even a smart mobile device like a tablet. Value-added resellers (VARs) use the term POS interchangeably when discussing hardware and payment location. The credit card industry adds to the confusion. Merchant service providers that process credit card transactions and their Independent Sales Organizations (ISOs) will also refer to the standalone credit card terminal as a POS. A POS in this sense is just the peripheral that reads the credit card, sends the transaction data between the store and the credit card processor, and can issue a receipt once approved.
The first POS hardware was a mechanical cash register invented by a Dayton saloon owner named James Ritty in 1879. The purpose was to keep employees and customers honest. It’s hard to find a mechanical cash register these days; Most POS systems are electronic, meaning they use an electronic cash register or computer system. Electronic POS is sometimes called ePOS. Electronic cash registers help streamline some of the end-of-day calculations that store owners must process on a daily basis. Realistically, they are only used in stores that are not automated, need a backup system, or do not process many transactions on a daily basis.
POS system is hardware combined with POS software and peripheral devices. This hardware helps the store clerk or associate to manage the sales process. At a basic level, POS software manages transaction calculations. However, POS software is quite scalable, and modules for accounting, inventory, and even customer relationship management (CRM) can be added. Inexpensively priced software options are available that can provide a small store owner with some of the tools used by high-flying Fortune 500 retailers.
POS peripherals are devices such as:
receipt printers
Provide a physical record of the transaction.
Magnetic Stripe Reader (MSR)
Automate the entry of credit card, driver’s license or loyalty card information
barcode readers
Automate the entry of information found on products, loyalty cards and coupons. This information is referenced in Universal Product Codes (UPCs) and Quick Response (QR codes).
cash drawer
A drawer connected to the POS that is used to securely store cash and coins.
POS keyboard
Typically, the ruggedized retail keyboard is designed to withstand constant use in a retail environment and is used to enter customer, product, or service data. Many times it will have the MSR built in. Many big box stores use mechanical keyboards that are rated for higher use than a standard consumer keyboard.
signature capture
Used to keep an electronic record of a client’s signature
electronic scales
Automated data entry of weight information
Computer screen
It is used as a computer screen to display information. May have touch screen technology.
Typically, large companies have built or customized hardware, software, and peripherals to fit their specific needs. The goal is to process transactions in the fastest and most accurate framework to keep your customers happy, associates trained, and accounting accurate.
Small and medium-sized businesses (SMB retailers) often purchase off-the-shelf hardware packages with software customized for their industry vertical. Today, this software no longer needs to reside on a computer in the store, it can be hosted in a cloud and sold under the software-as-a-service (SaaS) model.
Mobile POS is now available and prevents POS users from being tied to a specific location in a store. Mobile POS devices enable some or all of the hardware and software functions contained in a traditional point of sale system in a device that fits in the user’s hand.
POS systems have come a long way since 1879 and will continue to change adding features and benefits. In the end, they will continue to help store and restaurant owners manage and measure their performance, ease routine work, and increase customer satisfaction.
