Point of Sale (POS) systems are the technology that businesses use to process customer transactions. Cash registers, machines that run physical debit and credit cards, and online checkout software for ecommerce stores are all examples of POS systems.

All these POS systems have one factor in common—they are a technological aid that facilitates transactions between the buyer and the seller. At the bare minimum, almost all POS systems have three functions—calculating the price of items, processing the transaction, and providing some form of receipt to the customer. They come with a combination of hardware (such as a cash register, ticket printer, or card reader plugin for a smartphone) and software.

Apart from that, POS systems have a wide range of features and capabilities, many of which go beyond payment processing to reporting, employee and inventory management, and more. So take a look at our chart to get a quick idea of different systems and help you choose the best POS system for your business.

How do POS systems drive business?

Regardless of your specific line of business, at some point—hopefully—a customer will buy something from you. To best facilitate that transaction and increase your likelihood of repeat business, it is important to provide the customer with multiple options so they can choose their preferred payment method. After all, a customer can switch to a competitor purely because you are unable to provide their preferred payment method.

Choosing the right POS system to accommodate the payment needs of your specific clients or customers is therefore essential for business success.

How to choose a POS system

Before you select the ideal POS system for your business, you must consider several factors. First, determine what type of payment method your customers are most likely to be using. This is going to determine the basic functionality you need from your POS system. For instance, to be useful, a restaurant POS system should at the very least be able to process debit and credit transactions, as well as tips for waitstaff. And don’t forget that a few customers still prefer cash.

A modern POS system goes far beyond basic transaction processing. In addition to a terminal for processing transactions, a good POS should provide specialized features like analytical insights, inventory management, employee management and time-clocking, customer relationship management, and rewards programs.

After determining what type of system they need, many businesses make the mistake of simply buying the cheapest option in that category, without considering the specific features they need. However, which of the above features you require for your business will determine your ideal choice of POS system.

For example, for a retail business connected to an online store, an ideal POS system should enable online sales and syncing inventory between online and in-store purchases. For a restaurant, a POS should enable servers to record guests’ orders and send them to the kitchen, ring guests up, apply discounts or gift cards, and split checks when it comes time to pay. If your business has employees, many POS systems can keep track of their clock-in times, breaks, and hourly rates.

Ensure that the POS system you choose is capable of doing everything you want it to do, both now and in the future. Even if you do not yet have a rewards program, if you ever plan on implementing one, make sure you get a POS system that can facilitate that.

Implementing a POS system can be costly, so make sure that you choose a system that is worth your money and will continue to meet your needs as your business grows. This brings us to the next part of selecting the perfect POS system for your business—cost.

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How much do POS systems cost?

There are multiple costs associated with running a POS system. The software component of a typical POS system is most often billed monthly, and different hardware components usually incur a one-time fee ranging from $50 to $500.

Some POS systems on the market enable sellers to run the software on their own devices, such as smartphones or tablets, which can save hardware costs for small business owners. Others require sellers to buy proprietary hardware. Many systems for specialized industries include optional hardware add-ons, such as tableside ordering devices, that may increase the upfront cost but could be extremely useful for generating sales.

Additionally, when processing payments, many systems will charge the seller a percentage of every debit transaction. For example, some machines might charge the seller 3% of the transaction for a tap or swipe purchase, and 4% for a keyed-in insert transaction. Some payment terminals charge different fees based on the type of credit card or debit card the customer is using, although the industry is moving away from this model, with many providers now charging identical fees for most commonly used credit cards.

POS system costs are also heavily influenced by what features you will be using. Here are some examples of the costs and features you can expect to see, depending on your industry.

• Restaurant POS systems: Depending on what you need, you can expect anywhere from $800 to $3000+ for setup and about $100 in monthly maintenance. Prices are by location, so double this for two restaurants, and so forth. The low end of the price range will get you a payment terminal, a display, and a cash register. The high end allows for inventory management, automated ordering, and customer loyalty programs.
• Boutique POS Systems: Hair salons, dental offices, law offices, and similar boutique businesses require a specialized POS. It should handle customer appointments, employee time tracking, customer relationship management, and inventory management. When you are looking to book clients and ensure satisfaction for customers seeking lengthy appointments, these features are mandatory. For this reason, such a POS system can cost $3000+ per terminal.
• Grocery Store POS systems: Grocery stores require, at the very least, a cash register and debit terminal for every cashier. Ideally, a grocery store POS system should handle inventory management, customer loyalty programs, and coupons as well. These systems run around $4000, more if you have multiple cash lanes. On the cheaper end, a simple POS terminal for debit and credit cards typically is billed on a usage basis, rather than a monthly basis, and might have an upfront cost of only $50 to $500.

POS System Setup

Once you have made your choice, there is just one more step before you are up and running—setting up the POS system. There are two options here. One is to set up the system yourself, while the other is to hire a professional. Hiring a professional will set you back at least $500, possibly more, depending on the complexity of the system, but it will ensure that setup is done right.

Unless you have experience setting up POS systems professionally, it is best to outsource this work to someone who does. A professional will almost certainly set up the system faster and with fewer errors than an attempt at a DIY setup.

For a small business, where the cost of errors and delays can be very high, it is almost always better to hire a professional. A large business is also better off hiring a pro, but for a different reason—it could be logistically difficult and extremely time-consuming for a large organization to manually set up a large and detailed POS system.

Conclusion

Now that you understand the power and benefits of a good POS system, take another look at our comparison chart and use your newfound knowledge to help you pick the best POS system for your organization.

Remember to consider what features and options you might need right now as well as what you might need in the near future. Also, keep your budget in mind, and review our pricing section to see what you might expect from a POS system in your industry. Finally, consider hiring a professional for a smooth setup before you launch a brand-new POS system that will drastically improve your customers’ experience.