Gina Obert
By Gina Obert on September 20, 2013

Retail POS System Buyers Guide

Buy a Solution, Not Individual Pieces of Equipment

First, understand that point of sale equipment needs to be configured for your business. Configuring a dependable, fully functional POS system requires an in-depth knowledge of all components and how they interact with each other. You cannot simply piecemeal parts together and expect a system to work properly. You can find one-off pieces of POS equipment from discount vendors, Amazon, or eBay, but unless the POS hardware is configured for your system, your software, and even your payment processor, it will not work.

Do I Need a Support Contract?

Yes, yes, and yes. The point of sale industry has evolved where profit margins for hardware and software alone are too thin to cover the cost of support; instead, the incremental expense of supporting installed systems is covered through support contracts. Some support contracts are ‘free’, however, the cost is still built into the overall price of the system. Regardless of how you pay for it, we cannot stress how important it is to have a support contract. Your POS system is a mission-critical piece of equipment that also stores your business’ financial data. And let’s face it, at the end of the day, we’re still talking about technology, and if you’ve ever even turned on a computer, you know that things happen. Your business cannot afford to go offline because your system goes down. When purchasing a support contract, it’s important to understand what you’re getting. Below are basic levels of support.

  • Break-Fix Support. The most basic level of support, if something breaks, your POS company will fix it. Here’s the catch however, most break-fix agreements do not include how-to services such as teaching and training.1309_RetailBuyers_Feature (1)
  • How-To Support. A step up from break-fix, your issues will not only be fixed, but your POS company will tell you how they fixed them or walk you through your issues so you can fix them yourself in the future.
  • 24/7 Support. Fairly self-explanatory, but if your restaurant serves dinner, then a support contract that only covers regular business hours won’t do you much good.
  • Training. Some support contracts include training, which in our opinion is an invaluable resource. One-on-one training allows end users to truly unlock the power of their POS system and get the full benefit of a pretty powerful machine. Regardless of how plug-and-play a system is, end users still need to know how to effectively use the software before a POS system can be operational.

Understand the POS Equipment You Need.

There are hundreds of peripheral devices available for your POS system and you likely don’t need most of them. The most basic configuration should include a POS terminal, cash drawer, receipt printer, and barcode scanner.

What Kind of POS Terminals Do I Need?

Advances in technology have provided consumers with a host of POS terminal options.

  • Touchscreen Computer. A touchscreen terminal is an all-in-one computer that requires minimal space and few wires because everything is contained in one piece of hardware. Request a solid-state hard drive to increase performance and reliability. This setup will contain plenty of ports to attach peripheral devices.
  • Desktop Computer and Touchscreen Monitor. This setup is usually the least expensive but has several negatives associated with it. First, the computer and monitor are two separate pieces of equipment, which increases the system’s footprint and requires additional cabling. Next, desktop computers are designed as office/home computers, not as POS systems. We’ve found over the years that this setup creates significantly more problems than touchscreen computers. Desktop computers are also much more fragile than solid-state all-in-one touchscreens — drops, spills, and excessive dust can all damage desktop computers.
  • Touchscreen Monitors Can Make a Difference. All monitors are not created equal. Less expensive monitors typically have beveled edges, which can trap dust and debris. TrueFlat monitors are completely flat, which makes them much easier to clean and offer a more modern and sleek option.

How Many POS Terminals Should I Have?

Most retail locations make the mistake of planning their point of sale needs based on average customer volume. Instead, the number of POS stations should be based on peak business volume. Long checkout lines only provide customers an opportunity to reconsider their purchase, and an incremental point of sale station often pays for itself in a short amount of time.

What About Other Hardware?

  • Cash Drawers. Technology inevitably changes, but one constant in the POS world is that the best way to securely keep cash is with a strong metal box. A cash drawer should accompany every station you want to use to complete transactions. 
  • Receipt Printers. Modern receipt printers use direct thermal technology to ‘print’ receipts. Basically, the text is burnt into the receipt paper. This technology offers numerous benefits including the elimination of ink and printer ribbons in the design. The thermal transfer mechanism will eventually have to be replaced, but it lasts significantly longer than a typical cartridge or ribbon. Printer speed and printer resolution are the primary differentiators among receipt printers. One receipt printer should accompany each POS station. 
  • Barcode Scanners. Barcode scanners read barcodes using different technologies such as single-line scanning and omnidirectional scanning. Single line scanners are less expensive, however, the barcode has to be correctly oriented to be read. Conversely, omnidirectional scanners can read a barcode at any angle and work well in high-volume environments, however, they are also more expensive. Product volume and desired checkout speed should determine what type of scanner you need. Scanners can also be wireless or have the ability to scan IDs. These features can be useful for certain establishments, however, they are often significantly more expensive than basic models. 
  • Customer/Pole Displays Pole displays allow customers to see the item and price being rung up by the cashier. These devices are not necessary for the POS system to function, but often provide a better experience for the customer. LCD customer displays can also be attached to the back of a POS station and showcase advertisements and promotions when not being used for a transaction. 
  • Barcode Printer If you sell merchandise that does not come with its own barcode, then a barcode printer allows you to print custom barcodes to expedite the checkout process. Barcode printers typically require an additional software module to integrate with the point of sale software. Barcode labels come in a variety of standard shapes and sizes and can also be customized. It’s important to note that non-labeled merchandise can be entered into a POS system manually, however, this procedure can slow down the checkout process and also introduces the potential for user error. 
  • Pinpads. Pinpads allow you to take debit cards as a form of payments. This is recommended if your customers will regularly purchase more than $20 worth of merchandise since the processing fees for debit cards are generally less than those for credit cards at amounts greater than about $20.

Do I Need a Back Office Computer?

A back office computer allows managers to run reports, make changes to the merchandise, check inventory levels, or adjust employee time clock times without disturbing cashiers. It is not necessary however to have a back office computer unless you have four or more stations. Without a back office computer on a large system, one station will have the incremental burden of running the POS software as well as hosting the system’s database.

Can I Accept Credit Cards? Should I Integrate a Credit Card Swipe With My POS System?

Using your POS system to process credit card transactions allows you to keep records of every transaction you process in one convenient location. An integrated credit card swipe also save significant time compared to having a standalone terminal which requires you to manually enter in the transaction amount. Often, standalone terminals may appear to be a cheaper option, but they can require a long-term contract and charge higher-than-average credit card fees.

How Do I Choose a Credit Card Processor?

Credit card processors primarily compete on rates, however other factors come into play.

  • Rates and Fees. Ask what merchants think of the credit card processing industry and ‘snake oil’ is often heard in the response. Credit card processors are notorious for hidden fees and costs. Rates are only half the equations as you need to understand every fee that you are being charged as well. Don’t be scared to ask questions or call a processor out on hidden fees.
  • Service and Support. Service is a key differentiator in the industry, and if you’ve ever had difficulty batching out (i.e., getting your money), then you’ll understand this.
  • Analytics and Loyalty Tools. Some processors offer free analytics and loyalty programs tied to processing. This is a fairly new development in the industry and some really powerful tools have recently debuted. With these tools, merchants can track the spending habits of their customers and gain valuable insight into buying patterns.
  • “Free” Integration. Integrating credit card processing with a POS system is not free and often requires additional software. However some processors will gladly pay this integration cost for you, and if they claim they won’t, it’s worth calling their bluff. Find a processor who wants your business.

My Point of Sale Company is Trying to Sell Me Lots of Services. Are They Worth It?

Point of sale companies offer numerous services such as database uploads, inventory imports, QuickBooks integration, and the list goes on and on. With a little experience, an average end user can do most of these tasks, but you really have to ask yourself: is it worth it? Your POS company can do these services in a fraction of the amount of time you can do them in and save you countless hours and headaches. If you’re opening a new restaurant or implementing a new POS system, you have enough on your plate. Leave the heavy lifting to the experts.

This All Sounds Good, But It’s Still a Big Investment. What Are the Tangible Benefits?

This is really an entire topic in itself, but some of the greatest benefits are briefly listed below.

  • Significantly Increased Transaction Speeds
  • Inventory Management
  • Reduced Shrinkage
  • Reduced Theft
  • Employee Monitoring and Tracking
  • Financial Reporting and Analysis
  • Insight Into Profitability by Product
  • Improved Record Keeping and Organization

Are There Any Red Flags? What Traps Should I Avoid? What Should I Be Suspicious About?

Buying a point of sale is a big decision. There are dozens of options and features to think about, and every salesman is telling you his system is the best. Listed below are the top five red flags in the purchasing decision.

  • Free POS System. Companies are increasingly advertising free POS systems. But the truth is they are not free. They are far from free. Most ‘free’ systems require you to process credit cards with the company giving you the POS system. They lock you into extremely high rates and charge monthly and quarterly fees. At the end of the contract, you’ve actually paid twice as much as a regular purchase.
  • The Sexy New Tablet Solution. There are some great tablet POS systems out there, but there’s also several that are heavy on style and light on substance. Many tablet solutions look great on the surface but lack a significant amount of functionality compared to more traditional systems.
  • Support is Included for Free. As mentioned above, support comes in many varieties. Understand what your support contract includes and upgrade your contract if you need the incremental services.
  • Frankensteining a POS System. You can buy a discount barcode scanner from here and a terminal from a yard sale and eventually piece together a POS system from spare parts, but unless your hardware and software are properly configured together, you’ll be set up for failure. As we said, buy a solution, not individual pieces of equipment.
  • Over Buying. The POS industry has a few very large players such as Micros, Aloha, Radiant, and NCR, but after that, the industry is fairly fragmented. These large players make great systems and serve large chains and billion-dollar companies. But for small- and medium-sized businesses, these systems often don’t make sense. Don’t be afraid to buy a POS system from a company that specializes in meeting the needs of your business. They may not have the name brand recognition, but often they will deliver a more tailored and affordable system than one of the more prominent competitors.
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Whether you decide to do business with POS Nation or select another provider, knowing what questions to ask can help you get past the sales pitch, and to a solution that works for your business

Published by Gina Obert September 20, 2013
Gina Obert
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