Gina Obert
By Gina Obert on August 25, 2015

Be Aware of the Dangers and Hidden Costs Behind Free POS Software

While there are certainly exceptions to the rule, there is a lot of truth to the old saying: “You get what you pay for.” (That’s probably one of the reasons the saying has lasted long enough to be an old one.) This maxim certainly applies to “free” point of sale software.

While an offer of free POS software may seem like a deal that’s too good to pass up, it can end up costing a merchant plenty over the life of the product. There can be hidden fees, high credit card processing costs, spotty service, and support, as well as inconsistent (or non-existent) product upgrades that can threaten a merchant’s ability to comply with payment security requirements.

In addition, while simple, bare-bones POS software may seem adequate for your small start-up, a growing business will need a scalable system capable of adding new functionalities. These can include customized reporting, time and attendance/labor scheduling, inventory controls, customer loyalty data and marketing capabilities, and the ability to easily expand to new sites.

A Parade of Hidden Costs

In some cases, merchants opting for free POS software will find themselves paying for it almost immediately. Vendors offering free software will often charge heavily for hardware and software installation, initial and ongoing training, as well as for any support or service calls the merchant needs to make. Even the best POS solution will sometimes fail to function the way it should, so responsible merchants need to factor in such costs as part of doing business.

Remember also that it’s not just the cost but the quality of service that’s important – particularly with a mission-critical system like your POS. If a fix that should have taken minutes instead takes hours or days, merchants will pay in the form of lost sales and a highly negative customer service impression.

On an ongoing basis, the costs of free POS software can mount up via high credit card processing fees. If a software deal ties a merchant into a suboptimal rate, it can eat away at profits with each swipe of a card. As with the POS system itself, extra charges for customer care and support, as well as the poor impression that’s created when system outages prevent the merchant from accepting credit cards, all go into the “debit” column of a “free” POS system.

Keep Control of Your Customer Data

Merchants also need to be aware that they may be paying for their POS software with another form of currency – their customer data. In today’s age of mobility, electronic communication and social media, retaining control of customer contact data (not to mention loyalty program data such as recency, frequency, and spending habits) is crucial to any business’ growth plans.

Beware of POS providers who use the offer of free POS software as a means to gain access to your valuable, and proprietary, customer data. If a POS provider doesn’t allow a merchant to easily collect and use its customers’ e-mail data – or worse, uses such data to build their own consumer network – it should be considered a real, measurable cost by the merchant.

The money spent on POS software is an investment in both the current operational capabilities and the future growth of your business. Skimping on that investment by opting for “free” software can both snarl those operations and stunt that growth.

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Published by Gina Obert August 25, 2015
Gina Obert
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