The POS point of sale definition refers to a computer-based cash register and the place of payment. It refers to the place where a customer executes payments for goods or services. This place is also where taxes may become payable. With the help of software, POS is capable of taking orders, making payments, monitoring inventory, and collecting data. The transaction in POS can be done in person or online. The goal for retailers is to track pricing and inventory.
How does POS work?
POS usually works with the use of barcode scanning. The barcode can calculate the cost of orders, take payments, and log transactions. There is the option of using cash payment by inserting notes or coins into a machine. A popular one is card payment, by swiping, inserting, or tapping the card onto the reader. The process of using a card is a little more complex than using cash:
- POS system connects to the cardholder’s bank
- The customer then might be asked for the card PIN
- The POS system checks funds to follow up with the transaction
- Confirmation of whether the payment has been completed or rejected
- If completed, the payment goes through
Types of POS Systems
When discussing the different types of point-of-sale (POS) systems, it’s important to recognize how each serves specific business needs. Some systems are designed for larger, stationary operations, while others offer more flexibility for businesses on the move. Some solutions allow remote access to data, enabling businesses to stay connected across multiple devices and locations.
- Traditional POS: based on desktop computers, for longer businesses (retail, stores, restaurants)
- Mobile POS: based on smartphones and tablets, used by businesses with mobile/pop-up aspect
- Cloud-based POS: based on the cloud, flexible/remote access to data. Can sync across devices and locations in real-time
Benefits of POS
Besides tracking costs and inventory, POS comes with a lot of other benefits you should be aware of.
- Efficiency: Speeds up the checkout process, reducing wait times for customers.
- Accuracy: Reduces human error in calculations, item entry, and stock management.
- Integration: Works seamlessly with other systems, like accounting software, to automate back-end processes.
- Analytics: Offers insights into sales, helping businesses make data-driven decisions.
- Customer experience: Facilitates a smoother and faster transaction experience for customers, and can also offer loyalty rewards or promotions.