POS purchasing basics

A quick look at the components of a point of sale (POS) system and tips on getting the right solution.

POS Purchasing Basics

Few purchases can have as dramatic an effect on your retail or hospitality business as a point of sale (POS) system. The right POS system will give you a new level of control over your operations, increasing efficiency and boosting profits. The wrong system, however, can be a waste of money and a source of ongoing frustration.

In the most basic sense, a POS system is an improved cash register. The most basic POS system consists of a computer, a cash drawer, receipt printer, a monitor, and an input device such as a keyboard or scanner. However, in addition to being more efficient than cash registers, POS systems can create detailed reports that can help you make more informed business decisions.

A computerized POS system can provide significant returns if your retail or hospitality business has annual revenues of around $700,000 to $900,000. Below this level, an electronic cash register can probably meet your needs for considerably less money.

One of the basic decisions you will have to make about your POS system hardware is whether to go with a touch screen or a programmable keyboard. Most businesses these days choose the more intuitive touch screens. Most touch screens sold these days are based on flat-screen LCDs instead of traditional CRT monitors. While LCD touch screens are slightly more expensive (typically $600 - $1,000 instead of $400 - $500), they last longer, use less electricity, and take up less space.

For retailers, another key component is the scanner. Choose a scanner based on your customer volume. If you do not usually have more than a customer or two in line, CCDs or entry-level laser scanners should meet your needs. A fairly constant flow of customers might call for the more sophisticated autosensing, omnidirectional or embedded scanners. Prices range from below $100 for the most basic CCD scanners to $350 or more.

If a POS system is right for your business, make sure you have sufficient power for it. Having “clean” electrical power is a necessity that many businesses underestimate. Fluctuations in the electrical supply due to blenders, microwaves, and other mechanical devices plugged into the same electrical circuit can easily cause enough noise in the power supply to wreak havoc with POS systems.

Most POS systems are sold through resellers, not manufacturers. These resellers have the expertise to install, program, and support your POS system. Other vendors sell complete systems over the Internet or the phone – they tend to specialize in less-expensive, one-size-fits-all solutions -- that are ready to go as soon as you plug them in.

Costs for POS systems can vary significantly. A complete POS system, installed and customized to your business, can range from $2,500 to $6,000 per terminal, including hardware, software, and support. You can purchase a complete off-the-shelf system from a discount vendor for much less – as low as $1,500 – but you will have to install and program it yourself, and will not have the support you probably need.

Taking the next step to upgrade your cash management system can be a good way to ring in more sales. While it may be expensive to get started, the return on investment you’ll see makes it worthwhile.

Buying Tips
Price check. Price should not be your most important consideration when comparing POS vendors. Consider the system features and service levels when making a final decision. Support hours. Make sure any vendor you choose is able to support you during your busiest hours. Dot matrix vs. thermal. Consider dot matrix printers for use in kitchens, where the heat can make thermal printers less reliable.

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