When a shopper is ready to make a purchase, you want to provide a smooth checkout experience — especially when they're in your store with a product in hand.
Here’s where a point of sale system, or POS, comes in. When browsing turns to buying, a POS system can typically process the transaction smoothly and help better manage sales, inventory, and customer data.
Here's a closer look at what to know about POS systems, why they’re a game-changer for growing businesses, and how to find a great solution for your needs.
So, what is a POS system? A point of sale (POS) system is a platform businesses use to process and complete customer payments, whether online or in-store.
Before the internet age, the common system was a cash register. Now, portable and connected POS terminals, tablets, and monitors are popular alternatives. With this digital checkout technology, businesses can process contactless and secure transactions from almost anywhere.
A point of sale system integrates all your transactions and customer data, helping you facilitate sales, gather customer insights, activate special offers and discounts, and manage product inventory all in one place.
When it comes to transaction processing, POS retail systems play a critical role in providing an easy checkout experience. Not only do they enable a range of payment methods, but they also calculate sales tax, log the transaction details (e.g., the date and time), adjust inventory records, and generate a receipt for the customer.
These features make point of sale systems particularly helpful for restaurants and brick-and-mortar stores. Cafes, for example, can use these comprehensive payment systems to send orders to their kitchens and track popular menu items, while retail shops can use POS technology to build customer databases and sales reports.
Let's look at a point of sale example: Leo owns a record store called Chairman of the Boards, and he uses a tablet POS with advanced software. A shopper approaches the checkout counter to buy an album using her credit card.
Here's how the POS transaction would work from start to finish:
A POS typically consists of both POS hardware and software. While every POS solution requires software, not all businesses may need dedicated hardware. For example, some businesses might opt for cloud-based or mobile POS that are accessible through smartphones or tablets.
To understand what a POS system is, you should understand the types of hardware. With POS hardware, the primary role is to process transactions. To that end, businesses can choose from a range of hardware options, including:
Just like your phone or computer, POS systems run on software. Common types of POS software features include:
Payment processing is one of the most important features of any POS. Generally, the payment methods that systems can facilitate include the following:
Given that every business has unique needs, finding the right POS is imperative. If you want to know what are POS systems, then you need to understand the different types of systems, such as:
Robust and well-integrated point of sale systems can take growing businesses to the next level in terms of driving sales and unlocking new growth opportunities — all while providing the tools for managing operations from anywhere.
Modern point of sale systems can connect to entire ecosystems of third-party platforms to help businesses sync data and simplify their workflows. With the right integrations, you can also avoid the hassle of learning new software or migrating data.
Common POS integrations include e-commerce, accounting, and inventory management platforms. For example, a business might connect its POS to an accounting platform, making it easy to track and report revenue come tax season.
Automatically update inventory in real time with your POS system. Some POS inventory management platforms will alert you when stock runs low. You can use this inventory data to reorder best-selling items in advance, so you don't run out of your most popular items.
Your POS can generate comprehensive sales reports from POS data related to customer activity and transactions, including total sales, cost of items sold, gross margins, and net profits.
With these insights at your fingertips, you can make more informed decisions to fuel small business growth.
Use your POS to set up unique accounts for each employee. This way, staff members can clock in and out from one unified platform.
POS employee management features can also help business owners create schedules and track staff performance.
Make it easy for customers to show their support by providing a POS tip screen at checkout. Many systems will prompt customers with suggested tip amounts, so they can simply tap and add the extra payment.
A POS tip management feature can also help you track, organize, and distribute employee tips as needed.
Create comprehensive customer profiles that store payment and contact information, purchase history, and loyalty program status so customers generally only have to share their information once.
You can then use this data to launch personalized marketing campaigns and distribute special offers based on each customer's interests and preferences.
Sales associates and customer service representatives can also access this information to deliver more personalized online and in-store assistance.
Choosing the right POS solution depends on the unique needs of your business. Consider a POS that supports the following:
POS systems are more than just payment processing tools. With the right features, they can help integrate and optimize processes across your business — from inventory management to accounting. These systems can also be customized to meet each company’s needs. Meaning you mix and match the hardware and software features that make most sense for your checkout experience.
Beyond traditional systems, mobile or cloud-based systems are transforming the way retailers function. With these connected solutions, you can meet shoppers with their preferred payment methods and generate detailed reports about customer behaviors. As your business grows, your POS can serve as a central hub for driving sales and keeping operations in sync across your organization.
If you’re shopping for a point of sale system, PayPal Zettle can help streamline transactions and business operations. Click here to learn more about our complete Point of Sale Solution.
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