A point-of-sale (POS) system is more than just a fancy cash register. In addition to ringing up sales and accepting payments, it records and organizes sales data, generates reports, manages inventory, stores customer contact information, and more. But choosing the right POS system is challenging because there are many factors that determine whether it makes it easier to run your small business or becomes a big, expensive headache. To help make it easier for you to choose the right POS solution for your business, we looked at more than 100 options to come up with the following recommendations.
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Point-of-Sale System Reviews
Types of POS Systems
When you're looking for a new POS system, one of the first things you need to decide is which type you want. Do you want a cloud-hosted POS system, a locally hosted system or a hybrid solution?
Cloud-Based POS Systems
Cloud-based systems offer mobility and convenience. With this type of POS system, you can ring up sales, take orders and accept payments using a tablet or smartphone from anywhere in your store or restaurant. You can also access back-office features from any browser, which means you can view your store's sales performance and run reports wherever you are. You don't need to set up a local server to host your data – the POS provider takes care of that for you.
Although you usually pay a monthly fee for cloud POS software, most companies have transparent pricing and few upfront costs. They update the software regularly and you receive upgrades immediately, so you're always using the newest version. All of these upgrades are included in the subscription price. Most include customer service in the subscription rather than requiring you to sign a support contract that comes with a separate monthly fee.
The only potential downside to using cloud-based software is that you must have reliable internet access. Many web-based systems have an offline mode so you can continue working if you have the occasional glitch with your connection, but if your internet access is spotty or unreliable, you may need to consider a server-based solution.
Server-Based POS systems
Server-based, on-premises, or onsite, POS systems are installed on your server instead of being hosted in the cloud. The main advantages of this type of system are that, one, it doesn't require the internet to run, and, two, you may be able to customize the system.
The downsides are that you must maintain your server – which means security and backups are up to you – and this type of system can be more expensive than a cloud-based version. In addition to the extra hardware you purchase for your server and the IT costs to maintain it, you pay a large fee upfront for the software. Additionally, you're often required to pay monthly support or maintenance fees and purchase annual updates.
Another consideration is that you'll likely not have the ability to access your system remotely in real time, so you'll need to be in the office to take care of back-office tasks like running reports and updating your product catalog or menu.
Hybrid POS Systems
If you want the mobility and convenience benefits of a cloud-based POS system and the stability of a server-based POS system, consider a hybrid solution. This type of POS system runs on a local server and backs up your data to the cloud, allowing you to access it remotely. If your internet drops or lags, there's no disruption to your system. These systems are typically priced like cloud-based POS systems that have a monthly subscription fee.
The downsides of a hybrid POS system are that like server-based solutions, you will need some extra hardware, and it can be more involved to set up than a pure cloud-based system. You may also need to manually back up the server, which is less convenient than a cloud-based system that automatically does this for you.
How to Choose a POS System for Your Business
The tricky thing about selecting a POS system is that every POS provider is looking to diversify its services, and each offers a different combination of software, hardware and payment processing. Some companies sell POS software only. Some offer software and hardware. Some provide software, hardware and payment processing. Some have software and payment processing. Because of this, comparing value and overall costs can be challenging. You want to make sure you include the costs for all three components in your calculations when you're evaluating your options.
Additionally, each POS system has a different mix of features, which may also vary by service tier. Many systems can be customized with peripherals on the hardware side and add-on programs or integrations on the software side, though often at an additional cost. As you evaluate systems, you need to know which features you require so you can calculate the total cost, including add-ons or integrations.
How Much Does a POS System Cost?
POS system costs vary widely. As mentioned above, there are three components to consider when you're pricing out a system – hardware, software and payment processing – and you should plan on comparison shopping for each component.
POS Hardware Costs
The best POS providers are compatible with third-party hardware so you can shop around for deals (and may be able to continue using it if you switch software providers later on). They're also scalable, so you can start with just the basics, and add peripherals as your business grows and your budget allows.
Very small businesses that only accept credit cards and can email receipts to their customers may start with just a phone or tablet and a card reader. If you already have mobile devices and only need to buy a credit card reader (EMV compliant and NFC enabled), this type of setup usually costs between $20 and $100.
Most small businesses will want a few more peripherals: tablet stand, credit card reader, cash drawer and receipt printer. For this type of setup using your own tablet, you'll typically pay between $600 and $1,000. Naturally, additional peripherals like barcode scanners, kitchen printers and display screens cost extra.
POS Software Costs
Cloud-based POS software costs vary from free (though there are strings attached) to hundreds of dollars per month. Most offer a choice of pricing tiers that come with different features. Some tiers cap the number of users or the monthly sales volume you process.
If you want a basic, free POS system, the best options are from mobile credit card processors like Square, PayPal and SumUp that include POS features as part of their mobile processing apps. Although you're required to use these companies for your processing if you want to use their POS software, there aren't long-term contracts, and processing fees are charged on a pay-as-you-go basis, which is ideal for very small businesses.
For the starting tier of a good, full-featured POS software with no long-term contract and a choice of payment processor, expect to pay between $40 and $100 per month for one register.
As you compare prices, keep in mind that there is variance between brands on what features are offered within each tier, so one POS software may have all the features you need in its basic tier, while another might not. For example, if you need inventory management with tracking capabilities, one software solution may include it in its basic tier, and another might only offer it in its premium tier.
The final piece of the POS pricing puzzle is payment processing. The best POS systems give you a choice of payment processors so you can shop around for low rates and fees, and if you decide to switch processors in the future, you can do so without having to switch out your entire POS system.
POS providers are increasingly offering in-house processing, which can be convenient, but it may also be more expensive than working with a third-party processor. Some give you a choice of whether you use their in-house processing service or not, but some companies charge an extra fee (either monthly or per-transaction) for the privilege of using an outside processor. Others require you to use their in-house credit card processing service if you want to use their software.
What POS Software Features Do You Need?
POS systems have hundreds of features – which ones will you actually use? Depending on the specifics of your business, you may need a full arsenal of features, or you may prefer to keep things simple. As you look for POS software, think about what features you must have, those that would be nice to have, and which ones you'll likely never use. Sign up for a few demos and trial versions before making your final decision so you can make sure the POS app is easy to use and has all the features on your must-have list.
In addition to basic cash register features that are included with every POS solution, here are six key feature sets that you should look at closely before selecting a system. Keep in mind that specific capabilities within each feature set vary from system to system. Advanced features may only be offered with higher service tiers, or you may need to add apps or integrations to the POS system.
Mobile App Support
The best POS systems have apps that you install on iPads and Android tablets, and sometimes even smartphones, transforming the devices into mobile POS terminals. You can then use them as mobile checkout devices to ring up customer orders anywhere on the store floor or, for restaurants, take orders and payments tableside. You can also attach the tablet to a stand and add peripherals, such as a cash drawer and a receipt printer, to create a countertop checkout station.
Although some POS systems can be used with both Android tablets and iPads, some are platform-specific. If you have a strong preference for one platform over the other, or if you already have tablets and phones you want to use, this is an important consideration as you evaluate systems. Examples of dual-platform POS systems include Epos Now, Square and PayPal.
iPads are the preferred platform for most POS providers. These devices are well known for their user-friendly interface and stability, as Apple designs both the hardware and the operating software. iPads also have superior security because iOS is a closed platform, making it a less attractive target for hackers (though it isn't immune to malware attacks, and it's important to keep your devices updated). However, iPads tend to be more expensive than Android tablets because they're produced by a single company rather than multiple manufacturers. Examples of iPad POS systems include Vend, TouchBistro, Lightspeed, Talech and Revel.
Android may be the more popular platform with consumers, with over 2.5 billion devices in use, and many developers may prefer Android because it allows greater customization than iOS, but it isn't as popular with POS providers as iOS. Android tablets tend to be less expensive than iOS because multiple manufacturers develop them, so there's more competition in the market, resulting in lower pricing and a broader product selection, which can save you money as you set up your system, add devices, or replace broken, lost or stolen tablets. An example of an Android POS systems is Toast.
Do you need a basic product catalog or menu-item countdown? Or do you need to track quantities, including components or ingredients? Do you need low-stock alerts or automatic reordering? If you have a retail business, estimate how many SKUs you need it to support; some support a limited number. Also, consider whether you need vendor management and purchase ordering tools. If you need advanced inventory management features and they're not available, does the system integrate with inventory software?
Customer Management and Loyalty Programs
How much information do you need to collect about your customers? Do you need their email addresses for your mailing list? Phone numbers and addresses for delivery? Or do you need a system with a built-in CRM (customer relationship management) application that allows you to create customer profiles with detailed purchase histories and to add notes, such as birthdays, preferences or allergies? Do you want your POS system to include or connect to a loyalty program?
If your employees will use the POS system, you need to control the data and functions they can access. For example, maybe you only want your store managers to handle refunds, or perhaps you want all your cashiers to have this ability. Consider whether you prefer role-based permissions or if you want to set permissions individually for user profiles. Also, do you need it to have a timeclock so your employees can clock in and out using the POS system? If you're already using time and attendance software, will it integrate with the POS system?
All POS systems can generate reports, but the number of reports, specific report types and customization options differ between systems. Do you need data on your sales per hour so you can staff your business more effectively? Would a list of your best- and worst-selling items help you refine your product mix? Do you want the system to email specific reports to you automatically? Do you need real-time reporting that you can access using a mobile app?
Most web-based POS systems have integrations or apps that make it easier for you to share data between systems. For example, connecting your accounting software to your POS system saves you the time of exporting sales data from your POS system and manually uploading it to your accounting software. Look for a POS system that integrates with the business programs you already use, such as accounting software, payroll, e-commerce platforms and email marketing services.
Which POS Hardware Features Do You Need?
You have a lot of options for POS hardware and how you configure your system. A basic POS station has a tablet or a touchscreen, a credit card reader, a cash drawer and till, and a receipt printer. Some POS systems are compatible with additional peripherals, such as a:
- Tablet stand: Holds the tablet in place
- Barcode scanner: Makes it faster to enter items into the system at the checkout station
- Scales: Allow you to sell bulk items by weight
- Customer display screen: Shows the customer their sales ticket as you enter items into the POS system
- Kitchen printer: Sends orders to the kitchen for the cooks to prepare
- Kitchen display system: Digital alternative to the kitchen printer
- Kiosk: Tablet that customers can use to place their own orders
- Digital menu boards: Large screens that display your menu and promotions
- Coin dispenser: Reduces errors and speeds the checkout process by automatically returning change to the customer
- Caller ID device: POS system automatically starts an order when customers call your business
Buying, Leasing and "Free" POS Hardware
It's always best to purchase your POS terminal upfront, even if that means starting with just the basics. You can pay much, much more than the equipment is worth if you lease. Plus, leases have noncancelable, multiyear contracts, so even if you go out of business and return the equipment, you must continue making lease payments.
Some companies offer "free" POS terminals, but this can also be more expensive than buying your equipment upfront. To get this deal, you're typically required to sign a lengthy contract for the company's credit card processing service. Most also charge a monthly fee for maintenance or insurance, in addition to credit card processing fees and the POS software subscription. If it's a "free placement program," you'll be required to return the equipment if you close your account when the lease expires.
Proprietary vs. Open-Source POS Hardware
Proprietary POS hardware only works with the system you're purchasing it for, so if you switch systems, it will be unusable. It's usually only available from that specific POS provider, so you can't shop around for a good deal.
Open-source POS hardware can be used with multiple POS systems, so if you switch to new POS software that also works with open-source hardware, you might be able to continue using the equipment you already own. It's usually available from the POS company and multiple third-party vendors, so you may save money if you comparison shop.
Credit Card Terminal or Card Reader
Most of the time, you'll buy the credit card terminal or mobile reader from your payment processing company. However, sometimes you must purchase it from the POS company for it to integrate with the POS system. Whether you buy it from the processor or POS company, you want it to be EMV-certified so you can accept chip cards at your point of sale. You also want it to have NFC capabilities so you can accept contactless payments like Apple Pay, Google Pay and Samsung Pay.
Best POS Software Systems for Small Businesses
In addition to having a comprehensive suite of features and providing reliable support, the best POS systems are those that give you the most flexibility with contractual terms and setup configuration. They don't lock you in with contracts, leases or proprietary hardware, so you can move on if the system isn't the best fit for your business, or you want to try a different solution.
They integrate with multiple payment processors, so you have a choice of which one you work with and can switch processors without having to move to a different POS system if your rates increase or if the processing service doesn't meet your expectations. They also integrate with various business applications, allowing you to add more features to the system or connect with other systems you already use, such as accounting and marketing software, saving you the time it would take to manually share data between systems. Many also have an open API so you can build custom integrations if needed.
Finally, they can grow with your business, whether that means adding extra users, more devices or registers, or even a new location – allowing you to manage multiple outlets from a single account.
We started our evaluation of POS systems with more than 100 options, including companies we were already familiar with, those that contacted us and others that we came across in our research.
From this list, we looked for cloud-based POS systems designed for small businesses. We searched vendors' websites for information, read customer reviews, browsed how-to guides and installation manuals, watched video tutorials and tried out demos. We also posed as small business owners in the market for a new POS system and reached out to customer representatives to ask questions about pricing and features. Here are the criteria we used to evaluate POS systems:
- Contractual terms. The best POS software companies give you a choice between month-to-month and annual subscriptions. They don't require you to sign a multiyear contract or charge you fees if you cancel your account.
- Monthly subscription fees. We considered how much it costs to use the POS software. We also looked for additional fees the company charges, such as for setup and installation, or for additional features or services.
- Transparency of pricing. The best companies post their prices on their websites so you can determine whether the system is within your budget before you spend time on the phone with a sales representative.
- Choice of payment processor. We looked for POS systems that work with multiple payment processors so you can shop around for good rates.
- Inclusion of key feature sets and integrations. The best POS systems have a good mix of features. They also have add-ons or integrations so you can customize the system to meet your needs and share sales data with business applications you already use.
- Compatibility with third-party POS hardware. This is a cost-saving feature, as you may be able to use equipment you already own, and it gives you possible compatibility with a future system.
- Availability of customer support. You want customer support to be available when you need help. Because some businesses have irregular hours, and many business owners work long hours, we looked for systems that have 24/7 phone support.
What to Expect in 2020
It's always nerve-wracking to make a big purchase – especially when the item is something that you're going to use daily, possibly for years. It's no wonder then, that choosing a POS system is a difficult process for small business owners. While the right POS system will make it easier to run your business and become a central hub that you use to ring up sales, accept payments, collect customer contact information, manage employees, and run reports, the wrong system may make these tasks more difficult and become a source of irritation. We want to help you find a POS system that you'll love, so we evaluated more than 100 options to come up with our recommendations.
In 2020, as customers increasingly expect a seamless shopping experience that lets them make purchases how, when and where they want, merchants will be on the lookout for POS systems that help them create a unified commerce experience for their customers. They'll also seek POS technology that they can use to offer their customers the convenience of unattended restaurant ordering or retail checkout options.
Think of unified commerce as omnichannel 2.0. Like omnichannel and multichannel commerce, unified commerce seeks to create a seamless, cross-channel shopping experience that allows customers to easily move between brick-and-mortar, online and mobile retail. The difference, explained Boston Retail Partners' co-founder Ken Morris to eMarketer, is that "In omnichannel, you have multiple channels, but you don't have one piece of software, one version of the truth: You have many versions of the truth. In the unified commerce world, it's all connected in real time."
Your customers aren't just in store or just online – they want to interact with your store in a variety of ways. In a 2017 Harvard Business Review survey of 42,000 customers, researchers found that in their shopping journey, 73% of shoppers used multiple channels, 20% shopped in store only and 7% shopped online only. And, according to BPR research, 87% of consumers want a consistent, personalized experience across channels.
Researchers also found that 63% of shoppers use their phones in your store to research the pricing and availability of the products they're planning to purchase, and 56% of consumers want a shared cart across channels.
Here's an example of what unified commerce might look like. Your customer is at home on her computer and looks up your website. She places a pair of shoes in her shopping cart. The next day while she's at work, she decides she needs those shoes and pulls up your app on her phone where she finds the shoes waiting in her cart. She purchases them but needs them now, so instead of waiting for them to be shipped, she drives to your store after work and picks them up.
Retailers that offer this type of unified commerce experience are rewarded with bigger sales tickets as omnichannel customers spend more than single-channel customers.
Unattended POS Systems
Another trend in the POS industry that continues to grow in popularity and sophistication is unattended retail POS systems. Payment processing giant Global Payments says that over the next five years, it is expected to become a $13 billion industry.
Small business retailers – and restauranteurs – can jump on this trend now by choosing a POS system that offers kiosk and mobile order technology. A kiosk module allows you to use tablets as self-service kiosks that customers use at your establishment to make purchases or place their own orders. Mobile order technology uses apps or mobile-friendly websites to allow customers to make purchases or place orders from their phones, tablets, or computers.
The convenience and novelty of unattended retail improve the customer experience and the amount of money they spend at your establishment. A good example of this is seen in quick-service restaurants, where customers spend 20% more on average when ordering from kiosks than from a person, as kiosks allow customers to take their time looking over the menu and customizing their orders without feeling like they're holding up the line.
Another reason many businesses are implementing unattended retail solutions is that as minimum wages rise, they offer business owners a way to manage labor costs. For instance, instead of ringing up orders at one checkout station, a cashier can oversee several self-serve checkout kiosks.
At the high-end of unattended retail POS technology are the cashless, cashierless stores such as Amazon Go that use a mobile app plus RFID, AI, cameras and shelf-weight sensors to allow customers to simply walk out of the store with their items as their credit cards – via the mobile app that was scanned as they entered the store – are automatically charged. Though this POS technology is largely aspirational, it's a glimpse into the future of retail POS systems.
Common POS System Questions and Answers
You probably have already investigated this, but I will say it anyway just in case you overlooked this option. Most POS (point of sale) systems have a coupon management module that will allow you to apply coupon to specific products or against the total, track the expiration and track discounts. Additionally, many of these products allow you to generate a pop screen to be used for surveys. Microsoft Retail Management is a solution that comes to mind.
Do you provide your coupons digitally or in print form? If digitally, look into a diminishing coupon. In a prior role, we had abuse of printed coupons, too. We cut back substantially on printed coupons and shifted many of them onto a digital platform. Since our coupons were sent via email, and our email provider offered diminishing coupons, it limited abuse. The customer could still open and review the contents of the email, but after 3 opens (our set number), the coupon was digitally...
A POS is so simple to acquire these days and it offers support, reports and so much more than you can do manually. Even with a few small transactions a day, it will be good for taxes at the end of the year, organization and a better understanding of business trends, times of transactions etc. Square offers a great way to do that very inexpensively. There are a lot of really inexpensive options that will help you save time so you can grow your business rather than filtering transactions manually.
There are many ways to approach pricing, and cost plus is not necessarily the answer. It's a complex subject, and needs a structured approach to answer it. I suspect from this long list of questions there's no pricing strategy set by your company. It's like a flag blowing in the wind without one. In each situation, you're letting the market, the customer or the competition set the price for you. Of course these are important, but it's up to your company to decide what it wants. The first...
I have three 30-seat cafe restaurants, and I use Revel POS. It is all iPad based, and runs off installed apps. The back end is a cloud based CRM (for want of a better word), that quickly enables updates, menu item changes, pricing to be changed on site or back home in my office, or for that matter, anywhere I have internet access. The support is really good, takes about 30 minutes to install on site, and errors are quickly rectified. Its been easily scaleable so far. The staff like...