Point of sale (POS) refers to the payment counter in a retail store where customers pay for their purchased goods. When a customer picks out a product and wants to check them out, a culmination of hardware and software helps businesses make those sales. It helps customer management be easier and the time taken is the bare minimum
What Is a POS?
A POS or point of sale is a device that is used to process transactions by retail customers. A cash register is a type of POS. The cash register has largely been replaced by electronic POS terminals that can be used to process credit cards and debit cards as well as cash.
A POS may be a physical device in a brick-and-mortar store or a checkout point in a web-based store.The software for POS devices is growing increasingly elaborate, with features that allow retailers to monitor inventory and buying trends, track pricing accuracy, and collect marketing data,
Points of sale (POSs) are an important focus for marketers because consumers tend to make purchasing decisions on high-margin products or services at these strategic locations. Traditionally, businesses set up POSs near store exits to increase the rate of impulse purchases as customers leave. However, varying POS locations can give retailers more opportunities to micro-market specific product categories and influence consumers at earlier points in the sales funnel.
For example, department stores often have POSs for individual product groups, such as appliances, electronics, and apparel. The designated staff can actively promote products and guide consumers through purchase decisions rather than simply processing transactions. Similarly, the format of a POS can affect profit or buying behavior, as this gives consumers flexible options for making a purchase.
Features
- A business generates data on sales, returns, regular customers, high-selling products, seasonal preferences, low-selling products, reorder points, low inventory, top employees, returning customers, etc. An efficient POS system will help compile this data to help the management make crucial decisions regarding inventory, marketing, employees, and customer relationship.
- The POS database and software integrate all the data of a business. For example, a brand with its stores across different cities can compile all the data from its stores and warehouses using an efficient POS system or software.
- The POS terminal comprises a server, a desktop, a credit/debit card swiper, a drawer for cash, and a printer for bills. One may choose a barcode scanner or other specific customizations based on the business type.
- The POS installation company sets up your system, including all hardware and software. The staff usually undergoes training to be able to handle the system.
- POS transactions occur in retail stores, restaurants, hospitals, hotels, online shopping, etc.
- There are different POS systems such as counter POS, mobile POS, online POS, tablet POS, etc. Depending on whether one runs an online store, has a physical store, or both, one can decide upon the type of POS system.
- A mobile or tablet POS will reflect that one can pay for purchase anywhere in the store or the restaurant without the need for wires. This portability is the result of a cloud-based POS system.
- The cloud-based POS systems are advantageous over other POS systems as they process and store sales data online instead of locally on a computer server. They are often referred to as point-of-sale applications (apps) since they often find they’re used on mobile devices. Alternately, it is mentioned as an electronic point of sale (EPOS).
- The market is full of different POS systems enabled with varying features. Apart from the basics of sales and inventory records, many are designed to help with report generation, customer relationship management, loyalty program, automation, reorder point, employee performance data, cost-cutting, and profit generation.
- It is imperative to find one that suits your business. Although, experts have warned businesses and customers of POS fraud as card transactions are a magnet for cyber-attacks. In 2019, VISA discussed how malware tried to gather card details from a gas station POS system. As such, merchants must ensure a system that ensures data safety.
How does the POS System Work?
Point of sale systems enable a business to accept payments from customers and track sales. It keeps track of different data related to a business. Think of a payment checkout counter at a store. The counter displays a point of sale system and terminal. The POS system refers to the place where the customer makes the payment. The system allows processing payment transactions, recording transactions, inventory updates, and various other things depending on the POS software features.
A POS terminal is usually a desktop, POS software, cash register, scanner, debit/credit card machine, and printer to facilitate a transaction. There are various layers to the concept of POS; let us start by taking a simple example.
- A customer decides to buy a product or service in a physical store. A sales associate now initiates the billing. The associate uses a barcode scanner to know the product’s price. When customers have completed adding items to their cart and click the checkout icon during online shopping, this step happens.
- The item’s price, inclusive of the sales tax, is calculated by the POS system. And then, the inventory count is updated, indicating that the item has been sold.
- After that, the customer pays using a means of payment. Apart from cash, a customer can pay using a credit card, tap card, or debit card. Some stores offer payments using PayPal, loyalty points, and gift cards.
- Once the customer’s bank authorizes the transaction, the store receives the money. With this, the POS transaction gets completed.
- A digital or a printed receipt arrives as the payment goes through. After that, the customer is free to leave with the purchases.
Benefits of POS Systems
Electronic POS software systems streamline retail operations by automating the transaction process and tracking important sales data. Basic systems include an electronic cash register and software to coordinate data collected from daily purchases. Retailers can increase functionality by installing a network of data-capture devices, including card readers and barcode scanners.Depending on the software features, retailers can track pricing accuracy, inventory changes, gross revenue, and sales patterns. Using integrated technology to track data helps retailers catch discrepancies in pricing or cash flow that could lead to profit loss or interrupt sales. POS systems that monitor inventory and buying trends can help retailers avoid customer service issues, such as out-of-stock sales, and tailor purchasing and marketing to consumer behavior.
FAQs
What is a point of sale transaction?
A point of sale transaction occurs when a customer pays for a purchase in a store using cash/card/mobile or online shopping using net banking or payment gateway.
What is a point of sale system?
A point of sale system is where a customer makes the payment. For example, a POS system could be the payment counter, online shopping checkout page, self-payment kiosk, mobile POS, tablet POS, etc.
What is a cloud POS?
A cloud POS is a web-based POS system that allows you to process payments through the internet. Cloud-based POS systems support all payment transactions and updates online and store data in the cloud, rather than holding on to your local computer.
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tnreginet |rajssp | jharsewa | picme | pmkisan | webland | bonafide certificate | rent agreement format | tax audit applicability | 7/12 online maharasthra | kerala psc registration | antyodaya saral portal | appointment letter format | 115bac | section 41 of income tax act | GST Search Taxpayer | 194h | section 185 of companies act 2013 | caro 2020 | Challan 280 | itr intimation password | internal audit applicability | preliminiary expenses | mAadhar | e shram card | 194r | ec tamilnadu | 194a of income tax act | 80ddb | aaple sarkar portal | epf activation | scrap business | brsr | section 135 of companies act 2013 | depreciation on computer | section 186 of companies act 2013 | 80ttb | section 115bab | section 115ba | section 148 of income tax act | 80dd | 44ae of Income tax act | west bengal land registration | 194o of income tax act | 270a of income tax act | 80ccc | traces portal | 92e of income tax act | 142(1) of Income Tax Act | 80c of Income Tax Act | Directorate general of GST Intelligence | form 16 | section 164 of companies act | section 194a | section 138 of companies act 2013 | section 133 of companies act 2013