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When a shopper is ready to make a purchase, you want to provide a smooth checkout experience — especially when they're in your store with a product in hand.
Here’s where a point of sale (POS) system comes in. When browsing turns to buying, a POS system can process the transaction seamlessly and help better manage sales, inventory, and customer data.
Here's a closer look at what to know about POS systems, why they’re a game-changer for growing businesses, and how to find a great solution for your needs.
A point of sale (POS) system is a platform businesses use to process and complete customer payments, whether online or in-store.
Before the internet age, the common POS system was a cash register. Now, portable and connected POS terminals, tablets, and monitors are popular alternatives for powering contactless and secure transactions that could as seamlessly as the other apps and devices in shoppers’ lives.
A POS system integrates all your transactions, inventory, and customer data, so you can facilitate sales, gather customer insights, activate special offers and discounts, and manage product inventory all in one place.
When it comes to processing transactions, POS retail systems are key to providing an easy checkout experience. Not only do they enable a range of payment methods, but they also calculate sales tax, log the transaction details (e.g., the date and time), adjust inventory records, and generate a receipt for the customer.
These features make POS systems particularly helpful for restaurants and brick-and-mortar stores. Cafes, for example, can use them to send orders to their kitchens and track popular menu items, while retail shops can use POS systems to build customer databases and sales reports.
Let's look at a sample scenario: Leo owns a record store called Chairman of the Boards, and he uses a tablet POS system with advanced software. A shopper approaches the checkout counter to buy an album using her credit card.
Here's how the POS system would work from start to finish:
A POS system typically consists of both POS hardware and POS software. While every POS system requires software, not all businesses may need dedicated hardware if they opt for cloud-based or mobile POS solutions accessible through smartphones or tablets.
Within a POS system, the primary role of POS hardware is to process transactions. As a result, they typically come in various types, such as:
Just like your phone or computer, POS systems run on software. Since POS software can sync across devices and share updates in real time, it acts as the nerve center of your business.
Beyond simply processing payments, comprehensive POS software systems can also help manage other aspects of your company, including sales, inventory, and reporting. This ultimately can boost efficiency, accuracy, and overall management.
Payment processing is one of the most important features of any POS system. Generally, the payment methods that POS systems can facilitate include the following:
Learn more about POS payment processing and how QR code payments work.
Given that every business has unique needs, finding the right POS system is imperative. The different types of POS systems include:
Robust and well-integrated POS systems can take growing businesses to the next level in terms of driving sales and unlocking new growth opportunities — all while providing the tools for managing operations from anywhere.
Modern point-of-sale systems can connect to entire ecosystems of third-party platforms to help businesses sync data and simplify their workflows. With the right integrations, you can also avoid the hassle of learning new software or migrating data.
Common POS integrations include e-commerce, accounting, and inventory management platforms.
Automatically update inventory in real time with your POS system. Some POS inventory management platforms will alert you when stock runs low. You can use this inventory data to reorder best-selling items in advance, helping to ensure you don't run out of your most popular items.
Your POS system can generate comprehensive sales reports from POS data related to customer activity and transactions, including total sales, cost of items sold, gross margins, and net profits.
With these insights at your fingertips, you can make more informed decisions to fuel small business growth.
Use your POS system to set up unique accounts for each employee. This way, staff members can clock in and out from one unified platform.
POS employee management features can also help business owners create schedules and track staff performance.
Make it easy for customers to show their support by providing POS tipping options at checkout. Many POS systems will prompt customers with suggested tip amounts, so they can simply tap and add the extra payment.
A POS tip management feature can also help you track, organize, and distribute employee tips as needed.
Create comprehensive customer profiles that store payment and contact information, purchase history, and loyalty status so customers generally only have to share their information once.
You can then use this data to launch personalized marketing campaigns and distribute special offers based on each customer's interests and preferences.
Sales associates and customer service representatives can also access this information to deliver more personalized online and in-store assistance.
Choosing the right POS solution depends on the unique needs of your business. Consider a POS solution that supports the following:
If you’re shopping for a POS system, PayPal Point of Sale can help streamline transactions and business operations. Click here to learn more about our complete Point of Sale Solution.
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