A POS or “point of sale” system is the combination of software and hardware that allows a retail store to manage all business operations, including inventory, sales, employees, and more.
The term “point of sale” refers to the checkout counter, since ringing up a customer's sales is the primary way most employees will access the system. However, a POS system can take many forms, from mobile or desktop to a terminal or a self-serve kiosk. When you're collecting quotes from the best POS providers, you'll need to know what to ask for.
Here, we'll define all the types of POS systems you should know.
A POS system manages all of a retailer's operations, so it needs to be versatile. There are nine main versions of this system:
These types of systems aren't exclusive. POS tablets can be part of a mobile POS system, for example, and they may be part of a cloud-based system that also includes a terminal POS. All these terms will be useful to know so that you can choose a system that encompasses your needs.
Here's a quick look at what each of these terms refers to and why they may be relevant to your business.
Terminal POS systems are the most common type of POS, and are designed to allow business employees to record the revenue earned and the products sold. The terminal refers to the display that an employee uses to enter information into the POS software. Additional hardware components might include a barcode scanner, cash drawer, receipt printer, and customer-facing display with a card reader.
Terminals are used at the checkout counter by any size of retail store (grocery, antiques, electronics, books, salons, and spas), as well as behind the counter at a fast casual restaurant. Pros of a terminal include easy employee restrictions and ability to integrate with additional POS hardware (like tablets) or software (like online ordering), while cons include lack of mobility and requiring employee attention at all times.
A mobile POS system refers to software that can be accessed through a smartphone, typically with a small hardware credit card reader that plugs into the headphone jack. It's mainly for processing payments, with some limited inventory or timeclock functions.
Mobile POS are best for ice cream shops, fast food trucks, juice bars, farmers market stalls, and street vendors. Pros include little-to-no upfront investment, no extra features a small operation wouldn't use, and, of course, mobility. Cons? Features can be limited, lacking perks like marketing tools that medium or large businesses would need.
POS software can run on tablets just as easily as mobile, and some systems are designed for the roomier space of a tablet. A tablet POS might include a swivel stand, so an employee can flip the tablet to allow a customer to sign for their purchase — this lets the tablet POS function as a stripped-down version of both a terminal POS and a customer-facing display.
A tablet POS is best for coffee shops, pizzerias, and small retail stores like gift shops.
Another big reason a POS would use a tablet? Restaurants. Any sit-down establishment requires orders be made at the customer's table, which means the POS system that tracks sales must have a mobile component. This could be a smartphone or a pad of notepaper (that's then entered into a terminal POS), but a tablet is the right size for quickly taking tableside orders.
An online POS is a software-focused POS system that can be accessed through the internet, designed to require minimal hardware. This web-based service typically comes for a monthly fee that allows a store manager to run it from their pre-owned desktop or laptop computer.
An online POS is best for a store that has a low volume of sales, since the hardware isn't purpose-built for quick use — small retail stores and coffee shops, art galleries, veterinarians, or consignment stores. Top providers for online POS software are Vend, Erply, and Talech.
A POS might use a self-service kiosk, which allows the customer to scan and pay for their own products. Like the terminal, a kiosk's components will usually include a display, card reader, receipt printer, and barcode scanner to help the customer check out.
These types of POS systems are frequently specialized: The kiosk you'd use to buy a movie ticket looks different from the type you'd use for buying groceries. That said, common use cases include movie theaters, grocery stores, bus passes, and parking tickets. Some POS vendors offer self-serve kiosks for retailers and eateries — like Square, TouchBistro, and Lavu.
Software is open-source when the source code is publicly available and can be used and modified by anyone. An open-source POS refers to POS software that can be used and tweaked, typically for free. This software is often more limited than paid software, and since it must be maintained by a community of volunteers, may have bugs that haven't been fixed. Some open-source POS options will support hardware including printers, barcode scanners, and more, while others are designed to work from your smartphone.
But a free POS software certainly has a place, and open-source can be a great fit for a hobbyist or very small business, particularly if you know how to code yourself. Examples of open-source POS software include UniCenta, Odoo, and WallacePOS.
A multichannel POS is a system that allows a business to interact with customers across multiple channels, most frequently a website, a brick-and-mortar location, and third-party marketplaces like Amazon, eBay, and Walmart Marketplace. Not every POS software can track sales across all these channels at the same time.
A pro of multichannel POS systems is the ability to reach a larger audience, but the downside is that a business runs the risk of overstretching itself.
Multichannel POS is best for an ecommerce store that is establishing a physical location or a physical store that's adding online orders or building a website for a greater online presence. The top multichannel POS systems are Vend, Square, and Revel.
A cloud-based POS system is hosted entirely online, with no need to download software in order to operate it. It's similar to and often equated with an online POS, although the latter option might be installed and have an offline mode. It's best for smaller businesses that don't want to overextend their budgets with large upfront costs, though one downside is a potential lack of service if the internet goes down.
One big pro to this POS is that a store manager can review the latest sales data or inventory reports from their own phone or laptop. Good examples of cloud-based POS systems include Vend, Lightspeed, and Square.
A desktop POS refers to POS software designed to be operated from a desktop or laptop. This could refer to a browser-based online POS, an open-source option, or a system installed on-premise. But a desktop POS won't be mobile, and is likely to be best for low-volume sales, making it appeal to the same group of coffee shops and art galleries we recommended in our online POS section.
Some POS providers are free to set up, with no monthly fee, but charge transaction fees on purchases, like Square POS. Others will charge a fee just one-time, like Quickbooks. To compare the pros and cons of these payment structures you can read our guide to Square vs Quickbooks.
In general, the best POS system for a small business will be an online software for use with a terminal and/or tablets, and this will cost between between $50-100 per month per terminal.
As business grows, owners may choose to upgrade their POS plan to one with more functionality, so POS costs may rise.
If needed, POS hardware will be a large one-time upfront cost – mobile card readers can be as low as $10 each, but contactless card readers will be around $50 and a portable terminal will cost around $299.
Hardware and a year's worth of a POS software subscription will likely cost the average small business between $1200 and $6500, dropping to between $600 to $1200 for each year afterwards.
Every business is different and must consider its individual needs – a liquor store POS will have different features, for instance, than one for a restaurant. When it comes to the type of POS system you're getting, five different factors can help you choose from the nine types of POS systems we've outlined above.
- Type of business – small or large, restaurant or retail, low or high volume sales
- Hardware needs
- Business size (and future growth)
- Specialized functions – tableside ordering, self-serve checkout, extra mobility, employee management tools
Once you've settled on the type of POS system for your business, the next step is to find quotes from the top POS vendors who offer that specific service. New to point of services? You can also view our guide on how to use your POS system.
Most small or medium retailers and restaurants will likely want a similar POS. One that offers a software subscription over the internet, with a range of supported hardware and the ability to use terminals, tablets, or other mobile devices to accept payment and record sales.
And that's exactly the type of vendor you can find through Tech.co's comparison tool — just take a minute to answer a couple questions, and you'll get custom-made quotes from all the best POS services that suit your needs.
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