Features of POS Systems

By business.com editorial staff,
business.com writer
Jun 17, 2014
Image Credit: Utah778 / Getty Images

The type and number of hardware devices involved depends not only on the physical size and location of a business, but also on its branding/marketing strategies. For example, retailers frequently employ "stores within a store," where the idea is to capture sales immediately at multiple retail displays placed throughout a single store. The advantages include not only the ability to better capitalize on impulse purchase decisions, but also to eliminate long register lines at crowded exits that might discourage shoppers from shopping there again.

Hardware comprises terminals and peripherals that involve one, or a combination of, devices:

  • Touchscreens (either all-in-one units or terminal add-ons)
  • Barcode scanners
  • Credit card readers
  • Check readers
  • Cash drawers
  • Receipt printers
  • PIN (Personal Identification Number) pads
  • Electronic cash register terminals
  • Off-the-shelf personal computers
  • Tablets
  • Mobile phones
  • Checkout scales

It is becoming increasingly common for these devices to function on mobile or wireless platforms, which further adds to the flexibility regarding placement of the terminals as well as the environments under which they can function. In addition, Web-enabled terminals allow for inventory tracking across geographically disperse locations; and also provide for remote training, operation, and diagnostics.

In terms of software, certain industries have different POS needs-e.g., a restaurant POS has different software requirements than a hardware store or a hotel operation. The size of the business also determines the type of software. For instance, a small "mom-and-pop"–type business has less complex needs than a large chain retailer.

In some cases, the operating system (OS) may be proprietary, but there are also standard Windows, Mac, UNIX, and Linux offerings. The generally accepted industry standards for dedicated POS systems are OPOS (OLE Point-of-Sale), which is Object Linking and Embedding technology developed by Microsoft (and hence is a Windows-specific application); and JavaPOS, which uses the Java programming language and therefore is OS platform-independent.

Some Mac-based systems include Prosperity POS, LavuPOS, ShopKeep POS, and Lightspeed. There is also a QuickBooks POS that is attractive to those who already use QuickBooks accounting and payroll software.

An increasingly popular choice is a Web-based platform, also called a cloud-based POS, because it is largely OS- and device-agnostic. Web-enabled POS systems can not only run on any computer with an Internet connection and browser; but also on smartphones, tablets, and other mobile devices.

An additional advantage is that cloud-based systems run remotely from one or more secure servers, eliminating the need to install and update software at the local level. In addition, the centralization of data provides a single repository that can be accessed across geographic and organizational locations via a simple Internet connection, which also reduces operational overhead costs.


POS systems come in a variety of "flavors." There are complete bundled packages of hardware, software, and services that may be put together by the OEM (original equipment manufacturer) or a reseller. You can opt to buy a system, a single terminal, or input/output (I/O) device with software to use a computer, smartphone, or tablet. Systems can be leased or bought, and some systems are free with a contract for a payment-processing agreement.

After-sale services include basic on-site repair and remote telephone support, email support, and upgrades. Such after-purchase care may run for a predetermined limited period or may require a service plan at an additional cost. Warranties can run from one to three years, although some vendors offer lifetime warranties.

Additional services, typically arranged by the POS vendor through a third party, include credit card processing, cash advance and loan services, financing, remote backup, and equipment leasing.

POS Packages

POS systems broadly fall into these industry-specific packages:

Retail: The retail industry is one of the predominant users of POS terminals, which are almost always integrated into inventory and accounting back-office functions. In addition to processing purchasing transactions, the POS system also accommodates the use of customer loyalty cards, gift cards, gift registries, and coupon redemptions.

Hospitality/Hotel: The hospitality/hotel industry needs to track guests as they interact with various services throughout their visit: from dining room to guest room to a golf or tennis lesson reservation to a spa visit. POS systems can also provide handy displays of guest preferences in amenities and housekeeping. They allow hospitality staff to anticipate guest needs, rather than respond to requests, thereby raising service levels and customer satisfaction and loyalty. POS software is usually integrated with property management software.

Restaurant: Some of the first touchscreen terminals were used in the restaurant industry, particularly in fast-food chains. Today, they are the standard means to input and track orders, process payments, and generate customer receipts. A growing trend in quick-serve restaurants is the use of wireless pagers to notify customers when their orders are ready for pickup. Even in fine-dining segments, waiters are equipped with mobile input devices to send an order directly from the table to the kitchen. The same device notifies waiters when orders are ready for delivery to the table.

Grocery: In the grocery business, in particular, POS systems can be part of self-checkout systems, and will typically incorporate weight scales. Some systems also allow customers to use bar scanners to record their selections as they place products into their carts, and thus expedite the final checkout process. At the point-of-sale, data that directs decisions within an organization-such as inventory, purchasing, discounting, and marketing-is gathered. Good POS systems will give you the confidence that decisions are based on data, not hunches. A prime example of how this data comes together at the point of sale is the ability to generate instant coupons based in part on what the customer has just purchased. Strong grocery and retail POS can generate just-in-time marketing, personalized for the customer at the checkout counter.

Salon: The hair and beauty industry needs to enter, modify, and track client appointments and preferences in a system that can generate performance reports and loyalty profiles as well as identify and correct workflow inefficiencies. The POS system also maintains an inventory of beauty-care products and compiles a database of customer emails to send appointment-reminder notices, special offers, and other notifications.

business.com editorial staff
business.com editorial staff
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