In general terms, the definition of a point of sale device is a piece of hardware (and in some cases, software) that enables merchants to carry out transactions. It facilitates business owners to accept multiple tender types such as cash, check, credit cards, debit cards, and mobile wallets.
However, it’s not one size fits all when it comes to choosing the right point of sale device for your business. Let’s take a look at the different types of POS devices and their functionality so you can determine which one fits your business model.
Cash registers are the forefathers of POS devices, so it’s only appropriate that we start the conversation with these old gems. For more than a century, merchants have been using cash registers to ring up items by department, total sales, add tax, generate a customer receipt, and provide secure cash management.
Today, most registers are ECRs (electronic cash register) and also feature recordkeeping, sales reporting, and price lookup. They are faster and more efficient than traditional mechanical cash registers, especially when you add a barcode scanner for quicker, more accurate checkout.
ECRs also have advanced security, automatically locking cash drawers and only granting access when users have the proper credentials.
The Pros and Cons of Cash Registers
Cash registers can get the job done for small businesses that only need to ring up sales, generate a receipt, and manage cash, check, and, credit card payments using a standalone credit card reader.
Compared to other options we’re going to talk about, ECRs can be an inexpensive way for a small merchant with low transaction volume and a limited number of SKUs to manage the point of sale. Another advantage, depending on your perspective, is that they can operate without an internet connection.
On the downside, cash registers lack advanced functionality such as integrated payments, inventory management, customer loyalty, and a gift card program.
Since more consumers are choosing debit or credit as their preferred payment method, if you have a cash register, you also need to have a standalone payment terminal or credit card reader so they can accept electronic payments. For customers opting to pay with a card, they can securely swipe, dip, or wave a card or smartphone to make a contactless payment using NFC (near-field communication) technology.
Stand-alone payment terminals, like those available from Verifone or Ingenico, can operate independently with your payment processor or as part of a larger point of sale network.
The Pros and Cons of Stand-Alone Payment Terminals
Stand-alone payment terminals can be a simple, cost-effective, low-maintenance solution for payment card acceptance. Offline capabilities will keep your business running, even in the event of network downtime.
However, there are cons to using stand-alone payment terminals. Your cashiers will still have to enter the sale into your cash register, which can take longer at the checkout. Also, if you have multiple stand-alone terminals, it will create more work when you reconcile your end-of-day reports because each one will have to batch-out individually.
POS (Point of Sale) Systems
A POS system is a combination of software and hardware that allows merchants to process transactions at the point of purchase, but it also provides additional features and functionality that help you manage your business.
POS solutions can track inventory, create purchase orders, process returns, track labor hours, manage customer data, and administer loyalty programs — can your cash register do that? Point of sale systems can also integrate with online ordering for restaurants and e-commerce solutions for retailers — can your payment terminal do that?
Powerful POS software will provide you with real-time reports such as sales, shift reports, and accurate inventory data so that you can make informed decisions and control costs. Your point of sale system can also provide you with insights based on customer or loyalty program data that can help you target promotions and conduct more effective marketing campaigns.
These days, the most common point of sale systems are traditional and cloud-based POS systems. Traditional POS software operates on a local server, on-premises in your storefront. You need to be present at your store or restaurant to access the network, view reports, make price changes, or perform any other POS function.
On the other hand, cloud-based POS software is hosted on a remote server that you access anywhere via an internet connection. Since you can access information remotely, you always have real-time data at your fingertips.
Lastly, there is a third option that’s becoming popular, and that’s a hybrid POS system. In a hybrid model, the system has a local connection like a traditional POS, but the data is also pushed and stored in the cloud. This configuration gives you the best of both worlds — reliable POS performance along with cloud access whenever you need it.
If you opt for a POS system, there’s no need to settle for a large, unattractive POS that takes up a significant amount of counter space. The modern point of sale system includes sleek, all-in-one POS terminals or tablets (iPads) with a small footprint. They also support peripherals such as barcode scanners for faster checkout, integrated payment terminals for easy reconciliation, and intuitive user experience with touchscreen monitors.
Pros and Cons of POS Systems
Unlike a cash register, POS systems enable you to automate many of your day-to-day tasks, making your operation more efficient and saving you valuable time. A point of sale system also stores all of your data in one place, making it easier to analyze and gather insight into your business’ profitability.
The only downfall of a POS system is that it will cost more than a cash register and standalone payment terminal. However, as the saying goes, “you get what you pay for,” definitely applies in this situation. You’re paying more for a point of sale system because you’re getting more. You’re getting more features, functionality, and analytics than a register or terminal could ever provide.
In the long run, the benefits and savings that come from using a POS system will offset any hard feelings you had about making the initial investment.
Mobile POS (mPOS)
A relatively new take on the point of sale devices is mobile POS. Just like the name implies, mPOS uses devices such as tablets or smartphones and allow sales associates to ring up customers from anywhere in the store. Mobile POS also includes integration with mobile printers, card readers, and other POS peripherals, so you don’t have to compromise on functionality if you choose a mobile POS solution.
Pros and Cons of Mobile POS
Mobile POS is an excellent choice for merchants that need the functionality of a POS system but don’t have a traditional storefront or business model. For instance, food trucks, pop-up shops, outdoor dining, or concession stands are ideal for mPOS.
A common downfall to mobile POS is the use of consumer-grade mobile devices such as iPads. Depending on your business, an iPad may not be able to withstand the harsh environment of a restaurant or retail store. These conditions can lead to more repairs or replacement costs from using hardware that doesn’t have a more durable design.
Finding The Right Point of Sale Device
When it comes to choosing a point of sale device for your business, it’s smart to start at the same place you should always start with any tech purchase: Look at the problems you need it to solve. Do you only need a device that tracks sales and takes payments or do you need a management system to track inventory, employees, and customers? Once you define your pain points, you can narrow your choices of which point of sale device will fit your business.