If your business sells goods or services to consumers from a brick-and-mortar location, you need a point-of-sale system. It can speed up the checkout process, save and organize your sales data, store customer contact information and more. But, choosing a POS system is a big decision for a small business. We want to help make that decision-making process easier for you, so we looked at dozens of options to come up with the following recommendations.
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What to Expect in 2019
In 2019, mobility and the customer experience are hot topics in the point-of-sales market. The industry continues to move to cloud-based POS systems that run on tablets and allow merchants to bring the checkout to the customer, either on the sales floor of retail stores or tableside at restaurants, eliminating the frustration retail customers feel when waiting in line and the anxiety diners experience when their credit cards are out of sight.
Self-service kiosks that run on tablets will also continue to grow in popularity. This is, in part, due to the convenience and novelty of POS kiosks that improve the customer experience, but the other factor driving growth is rising minimum wages, as POS kiosks offer business owners a way to manage labor costs. Instead of ringing up orders at one checkout station, a cashier can oversee several self-serve checkout kiosks.
At the high-end of self-service 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.
Another trend we’re likely to see more of in 2019 is POS companies offering in-house credit card processing services. The upside is that it ensures that you can seamlessly accept credit cards using the POS system right out of the box, and you work with one company, not two. The downside is that payment processing rates may be more expensive than what you would pay if you used a third-party processor and, in some cases, there may be an extra convenience or integration fee if you decide to use an outside processor.
Frequently Asked Questions About POS Systems
What are the key functions of retail POS software?
You'll use your POS system all day, every day, and it will make it either easier or harder to run your business. It will help you do the following:
- Move customers through the checkout process
- Record sales data
- Track inventory
- Capture customer contact information
- Generate reports that you can use to analyze your business's performance
Even if your business is very small, if you sell goods or services in person from a physical location – such as a brick-and-mortar store, restaurant, salon, spa or office – a POS system is a worthwhile investment that saves you time and money.
What do the best POS systems include?
In addition to having a comprehensive suite of features (read more about POS software features below) 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.
What are the benefits of a cloud POS system?
Cloud-based systems offer convenience, allowing you to access back-office features from any browser, which means that 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, as the company 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. These upgrades are included in the subscription price; there aren't any annual upgrades that you have to buy. Most also include customer support in the subscription rather than requiring you to sign a support contract with a separate monthly fee.
The only potential downside to a cloud POS is that it does require you to have reliable internet access. If this is an issue in your area, you may need to consider a downloadable program that runs offline.
Does the POS system come with mobile app support?
The best POS systems have POS apps that you install on iPads and Android tablets, transforming the tablets into POS terminals. You can then use the tablets as mobile checkout devices and 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.
Why Is It Tricky to Choose a POS System?
Every POS company 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.
POS System Reviews
POS Software Features
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.
Here are five key feature sets that you should look at closely before selecting a POS 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 may require you to add apps or integrations to the POS system.
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.
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 be using your 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?
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?
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 your 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, e-commerce platforms and email marketing services.
POS Hardware Features
You have a lot of options for POS hardware. 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 the following items.
- 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 (KDS): 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 up 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 end up paying 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 company, 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 be able to save money if you comparison shop.
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. You also want it to have NFC capabilities so you can accept contactless payments like Apple Pay, Google Pay and Samsung Pay.
What We Tested
We started our evaluation of POS systems with a list of 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's 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 decide to 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 that allow you to 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.
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...