The Basics of a Point of Sale System (POS)

30 Sep 2018 18:54

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Point of sale (POS) can be referred to as a check-out or cash wrap and is usually the location in a store or restaurant where transactions for the exchange goods and services occur. A point of sale system typically refers to the physical electronic hardware and peripherals that are used to conduct a transaction. This hardware can include a cash register, a dedicated computer or even a mobile smart device such as a tablet computer. Value Added Resellers (VAR) interchangeably use the term POS when they discuss the hardware and the checkout location. The credit card industry adds to the confusion. Merchant services providers who process credit card transaction and their Independent Sales Organizations (ISO's) will refer to standalone credit card terminal as a POS as well. A POS in this sense is only the peripheral that reads the credit card, sends the transaction data between the store and credit card processor and may issue a receipt once approved.

The first POS hardware was a mechanical cash register invented by a Dayton saloon owner named James Ritty in 1879. The purpose was to keep employees and customers honest. It is hard to find a mechanical cash register today; the majority of POS systems are electronic, meaning they use an electronic cash register or computer system. Electronic POS is sometimes called ePOS. Electronic cash registers help streamline some of the end of day calculations that shop owners need to process on a daily basis. Realistically they are only used at shops that haven't automated, need a backup system or don't process many transactions on a daily basis.

The POS System is hardware which is combined with POS software and peripheral devices. This hardware helps a store clerk or associate manage the sales process. At a basic level POS software manages the transaction calculations. However, POS software is quite scalable and modules can be added for accounting, inventory and even customer relationship management (CRM.) Value priced software choices are available that can give a small shop owner some of the tools the large fortune 500 retailers use.

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