As a merchant, you have many options when it comes to which type of credit card processing and checkout system your business utilizes. For most retail and restaurant businesses the main choices are an all-in-on point-of-sale (POS) system or the traditional cash register and credit card terminal. Deciding which system works best for your business is important to ensure your business needs are met while at the same time operating a system that is cost effective. The POS system can definitely help businesses on many levels including increasing operational efficiency, however it does so at a hefty price. Here we look at the pros and cons of a POS system and if this is the right choice for your business.
What is a POS system?
Both merchants and customers are familiar on some level with a POS system. This is the type of system that you often see utilized in busy restaurants and supermarkets. POS technology often involves a touch screen or infrared bar code reader. The way items are entered for purchase is not the only difference between the POS system and the more traditional cash register. The technology behind a POS system allows a business to not only improve the checkout process but also keep track of inventory, track purchase details, track store location and purchase time and a host of other features which makes it possible to effectively run your business. POS technology can be used in conjunction with a credit card processing system allowing your business to accept all methods of payment. This allows for a more convenient and efficient checkout for your customers.
Advantages of POS
There are several advantages to using a POS system in your place of business. With the use of this technology restaurants can take advantage of a touch screen which holds the entire menu. When information is shared electronically between the front and back of the house, errors and miscommunication can be reduced. This will result in a more efficient running of the business which improves customer satisfaction and sales. The payment process is generally quite seamless with a POS system which can tally the bill quickly including a gratuity. For a retailer, the POS system can help track inventory and allow for a customer reward program that many consumers look for when shopping.
Drawbacks of POS
The two main disadvantages of using a POS system involve cost and maintenance. The initial cost of installing a POS system can be quite expensive. Depending on the number of units that need to be installed, you are easily looking at an investment in the thousands to tens of thousands of dollars. The cost does not stop there, since this technology must ensure security and remain up-to-date, you will likely have to pay for system management to guarantee things always run smoothly. Security is a major concern considering your POS system will be part of your credit card processing system. This is an added cost and liability many small businesses are simply not prepared to take on. Another concern with credit card processing is a POS system that requires on single processor or provider. If you are not happy with this processor you are out of luck as you system may not be compatible with other processors or you may be unable to break your contract.
There are several factors to consider before deciding if a POS system if right for your business. Many companies have found the benefits far outweigh any costs, while other small businesses determine this system of advanced technology may just be more than their business needs to operate effectively
