A POS System has many functions, but the primary function of a “Point Of Sale” system is accepting payments in exchange for goods or services… or, said more bluntly, the primary function of POS systems is taking money!
Every business wants to make money. Without the ability to make money, there would be no reason to have a POS system. A POS helps guide both the buyer and the seller through the process of making and accepting payments.
The basic function of a POS (accepting your customers’ payments) is usually accomplished in the same basic way every time.
Your customers come to you for the best goods, merchandise, and service (obviously). They make their way through your store (or browse through pages on your website), browsing through all of the excellent products you have.
Once they find the goods they need or want and have decided they are ready to purchase those items, they make their way to the front of your store to the checkout stand. This is the physical location where the Point Of Sale system resides.
POS systems usually all look the very similar, with some small differences depending on the type of business. The traditional ones typically have either a digital readout or touch screen for inputting and viewing items being scanned into the system.
This screen allows the salesperson and the customer (with a customer facing screen) to see the items being entered into the system and helps ensure all the items they are trying to purchase are accounted for and the prices are correctly reflected as advertised.
Customer facing screens are a nice little feature if you are able to make it work at your cash out counter. It gives the customer the extra assurance that nothing is missed and they aren’t being overcharged for their items.
If you have a loyalty program in place, your customers, in most cases, will see the discounted price reflected as the items are scanned, this way they can literally “see” the money they are saving right before their eyes!
The item’s original price is the first they see and then the POS system applies the discounts (either loyalty or sales prices/promo prices) to each item and then changes the price to the loyalty/sale price.
Cha-Ching! Your customer is already in a better mood and ready to shop for more savings!
Of course, the items must first be entered into the POS system before any of the discounts are applied and before they can pay. This requires a barcode scanner. Nearly every single POS system comes with either an attached or wireless barcode scanner.
Your salesperson needs only take each item, find the barcode on the product, and point the scanner (which looks kind of like a laser gun from a sci-fi movie) at it to “read” and enter the product into the system. As soon as it reads the barcode, usually it will make a beeping sound and the item will show up on the screen.
Then, the original price and any discount… the process described a moment ago… occurs. Each item is scanned into the system, the prices/discounts are reflected on the screen or digital readout, and once they have entered everything, the salesperson states the total amount owed after discounts and tax.
The customer retrieves either their payment card of choice or cash/check to pay for their items and hands it to the salesperson. The salesperson then swipes or inserts their card into a reader, or, instructs the customer to use a separate PIN pad to complete their credit/debit/gift card transaction.
This PIN pad is connected to the POS system and communicates with it digitally, as well as with the customer’s financial institution, to process the transaction.
When the transaction is approved the salesperson asks if they would like a receipt and then they produce a printed receipt of the transaction for the customer from the attached printer.
These are not the bulky at-home-use type printers which require their own small desk to accommodate them. They are quite small actually. Only a few inches in width, height, and breadth. They have a small roll of receipt paper which is front-loaded into it and as transactions are rung through, it prints the details of the transaction on the paper and feeds it through a slot on the top.
We’ve all seen them in one form or another. They are quite common wherever you purchase merchandise or services. From food trucks to movie theaters, if it involves a purchase, there is a receipt printer there somewhere.
If your customer pays with cash, the salesperson enters the amount into the POS with either a touch-screen prompter or with an attached keyboard. Once the amount has been entered, the attached cash drawer makes a “ding” sound and slides open to reveal a cash tray.
This tray has separate slots for each bill amount and also individual change trays. The salesperson can use the total amount of change on the screen to see how much change the customer needs back (unless they are very proficient and quick with their math skills!).
The cash drawer is then closed and automatically locks itself. These attached cash drawers are made of heavy-duty steel and the locks are also extremely heavy-duty and tamper proof. The person with the master key is the only one who can manually open the drawer.
This feature is a great safety feature to have and helps ensure there are no unauthorized openings of the cash drawer.
The drawer is also used to store credit card slips and hand written checks and they can be placed in the drawer through a slot on the front of it.
A lot of new credit processing companies have condensed the traditional POS system into software systems which incorporate all the same functions of traditional systems but they come in a much smaller, compact design.
iPads and smartphones can be used to install POS system software and use things such as a “dongle” (separate attachment) which is plugged into the smart device and used for swiping credit, debit, and gift cards. They are very small and are usually included with the purchase of the POS system.
iPad and Android tablet POS systems are very user-friendly and intuitive. The prompts are quite easy to see and read and walks the salesperson quickly through the transaction. Once they have completed ringing up the customer, they turn the tablet to the customer to approved the transaction with a simple “yes” or submit button.
For businesses such as a coffee shop or other “service” type businesses, they can include a section to add a tip and will have buttons with $1, $2, $3, or “other amount” on them. They simply choose their tip they wish to add and it processes their total.
It will also ask them if they want a printed receipt, no receipt, or have it emailed to them. This is a nice touch for your customers who might be environmentally conscious and paper-use conscious.
They can opt to receive their receipt digitally, thereby saving one more tree! Not to mention saving you money on receipt paper.
Any business owner will tell you, it’s the little expenses which can end up costing you in the end. They are easily overlooked as a “small” albeit necessary expense, but put all of those small expenses together and you have a massive, looming amount!
Anywhere you can save will only help you reduce your overhead.
POS systems have really come a long way.
What once was a massive metal machine with huge typewriter style buttons and very little functionality beyond simply accepting and storing cash (and not very safely) have morphed over the years into smaller and smaller “smart” machines which can promptly guide both the salesperson and your customer through the process.
Modern POS systems also incorporate a lot of your back office functions, too! POS software (depending on the software you choose) can help you with anything from keeping track of your employees’ time punches to keeping track of your inventory and helping keep your accounting records in order.
Because everything is digitally entered into the system, it will automatically keep track of your inventory levels, which is hugely beneficial when it comes time to fulfill your orders for new stock or merchandise.
You can also print or view sales data to see how your business is doing. In many cases, you can view sales on both the general/overall scale down to individual sales of each item. This can help you accurately predict buying trends and place your inventory orders accordingly.
No one likes tax season, right? Good news! You can integrate accounting software into your POS system! (In most cases).
Having an accounting program installed on your POS can help greatly reduce your migraine levels when it comes to balancing your books and keeping track of your HR functions.
Bottom line, POS systems are here to help! And help they do…
Just be sure you don’t trade cost for functionality and efficiency. Some POS systems are more headache than helpful. Don’t skimp on price.
Do your research and keep your eye on the functions you need to run your business smoothly and only let the price be a contributing factor in your decision, not necessarily the deciding factor.
We understand, you probably don’t have a pile of cash just sitting around and every penny counts. But make sure when those pennies are spent, they are spent on a POS system worthy of them!
If you have any questions about specific POS systems or still aren’t sure what system you need, give us a call here at RedFynn. We come to this place we call a job and do this every day! We’ve got answers for you, whether your questions regard merchant services, low payment processing rates, flexible business loans, or straight up business intelligence.
Call us at (888) 510-9871