Business Resources

Understanding the Components of a Point-of-Sale (POS) System

By: AllBusiness.com

The pieces that make up point-of-sale (POS) systems are pretty straightforward. For retail businesses, you start with a personal computer, which runs the retail POS software. You need a monitor. A regular computer monitor will do, but these days flat-panel screens, though still pricier than tubes, are popular. They don't take up as much space, and they're pretty durable, even when equipped with touch-screens, which you think would get tired of being poked all day.

You'll also need hardware to capture data and send it to the PC. Options include keyboards, which are flexible and handy. Equally important is magnetic stripe readers so you can process credit cards; you can get this feature built into the keyboard, or as a standalone gadget.

For a retail store, add scanners to read the bar codes: This is where the efficiencies at the checkout counter really happen. (For more about those efficiencies, read The Benefits of Moving to POS.) Cheaper scanners are fine for most retail outlets, although they have less range and might have trouble with deformed barcode stickers. Laser scanners are more robust and have longer range. They come in several flavors of increasing speed, capability, and price, with the most expensive models being appropriate for high-volume businesses.

With some systems, you can buy your own computers and then buy the POS software for your business separately. This works best if you have technical expertise working for you. If not -- and most of the time it's not -- you'll buy both hardware and software as a package from one vendor. The advantage is, the vendor knows the hardware and should be able to take care of problems. The disadvantage is, you might pay more than if you put it together yourself. But, as usual, if you don't have the (considerable) expertise, you can't expect to get the savings.

If you decide to buy the components and peripherals separately, the one thing you will have to check at each step is compatibility with your POS software.

Now, let's look at a few add-ons you may want to go with your retail POS system.

  • A printer at each station will let you print out receipts and also credit card slips for customers to sign.
  • A customer or pole display shows the customer what you're ringing up, and the total.
  • Check readers can be useful if you get a lot of personal checks in your business. they let you scan in the check and quickly verify it, reducing fraud.
  • You need security control for access to the POS terminal. Options include simple PIN numbers, magnetic cards, or fingerprint ID devices. The latter is much harder to trick than PINs or cards, which can be stolen.

Buying Peripherals

Most peripherals are commodities: They're all pretty much the same. But one area where they start differentiating is in high-volume operations. Heavy use can really beat up keyboards, touch screens, and even scanners. That's when you find out that few peripherals are road-tested for high volumes and can claim to be durable enough to handle it without breaking down. Following up on customer references can help here. Look for someone who is in the same kind of business, doing the kinds of real volume you expect to do.

One way to select among brands of a particular peripheral is to see which ones are supported by your POS software. Although you might be tempted with the newest, state-of-the-art technology, sometimes it's not ready for prime time. The major vendors only support the good stuff, so the most widely supported brands are more likely to satisfy. At minimum, it has to be able to integrate into the system you're buying.

AllBusiness.com operates one of the Web's premier business sites, providing practical information and services for business professionals and growing businesses. See more at www.allbusiness.com.

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