POS System

POS System

A point of sale system, or POS system, is something people use every day when they go shopping. It is the hardware that businesses use to complete customers’ transactions. 

Each POS system also has software, which is what the payment processing company uses to authorize and process each customer’s payment. 

How do POS Systems Work? 

There is a process that occurs at the point of sale, and it goes something like this: 

• The customer decides to make a purchase at a store. 
• The sales associate scans the barcode on the product or enters pricing information manually. Some POS systems even work with cell phone cameras to capture the price. 
• The POS system calculates the price and tax before providing a final total. 
• The customer pays using a credit card, debit card, or another form of payment. 
• The customer’s bank authorizes the transaction if it is approved. 
• The POS system provides a receipt for the customer and finalizes the sale. 

Other things are also happening in the background. For example, the POS system can be set up to track store inventory. Once a sale is made, those numbers are updated. 

POS systems can also be used to track customer rewards points and offer discounts. 

What do POS Systems Include? 

POS systems usually involve some or all of the following, depending on the business’ needs. 

• A register - This is the device that helps you calculate and process your customers’ transactions and payments. In today’s hardware, it is usually some type of tablet. 
• Credit card reader - You’ll need a credit card reader in order to accept credit and/or debit card payments. Many also allow contactless and mobile wallet payments, such as Apple Pay or Google Pay. 
• Cash drawer - Some customers still like to pay in cash, so you want to have a way to collect those funds and give change. 
• Receipt printer - Many of today’s POS systems will send customers email or text receipts. But having a receipt printer allows you to give your customers paper receipts if they want them. 
• A barcode scanner - With a barcode scanner, you can quickly ring up sales. You can also check prices, inventory, and more. 

POS System Features

Many POS systems offer features on top of processing payments. For example, they can be configured to: 

• Manage inventory
• Print sales reports
• Manage employees
• Manage customer relationships
• Provide receipts (paper or digital)
• Calculate and pay out tips

POS systems are essential for many businesses who want to process payments other than cash. 

Most businesses should avoid leasing payment processing hardware because doing so can drive up the price. The best option is to purchase one outright to avoid a lengthy and costly contract.