Choosing a point-of-sale (POS) system is a big decision. The right system can make your business operate much more efficiently, help manage inventory, provide data to make better purchasing and staffing decisions, and improve customer service. Many of the POS systems available for retailers advertise similar features. But, they are not all created equal.
Here’s how to choose a POS system that’s right for your store:
1. Consider Price
Price is the first element to consider. Of course, you want a system that you can afford. But, you also want to make sure you are getting a good value. Different systems have different pricing structures with different features built into the base price. When choosing a POS system, there are three main costs to consider:
• Monthly Fees
We recommend using a cloud-based or SaaS (software as a service) POS system. Many of these come with a monthly software fee ranging from $50-$100 per month. However, some options like Square and Loyverse are free apps you can download. Lightspeed is one of the pricer POS options on the market for brick and mortar retailers, but it comes with a really great custom report builder with detailed analytics and insights. So, it’s still a great value.
• Hardware Costs
Some POS systems are web-based. Others are an app for Apple or Android tablets. And others require you to purchase proprietary hardware to use their POS. I recommend opting for a web-based or app-based POS system that does not require specific hardware purchases for several reasons. First, so you can shop around for the best deals on a tablet, or better yet use hardware that you already have. Also, buying software-specific hardware makes it a lot harder to switch systems down the road.
Overall, tablet-based systems are a favorite among employees and customers. The touchscreens make them super easy to use, they can be used throughout the store, and are relatively inexpensive.
Also, consider your receipts and printing. Many POS systems offer digital receipts over text or email. Digital receipts can save you money on receipt printers and paper. It’s also a great way to collect customer data for marketing and loyalty campaigns.
• Credit Card Processing
The third pricing element to consider is credit card processing. Some systems have built-in payment processing that you have to use if you opt for that point of sale software. Others let you choose your own payment processor, but have direct partnerships with a select few. No matter what you end up with, we highly recommend having your payment processor integrated with the point of sale. Integrated payments help prevent user error, streamline data, and overall provide a smoother process. If your payments aren’t integrated, that means you will ring up a sale on the POS, and then have to manually enter the sale amount in your payment processing system to charge the customer. If your payments are integrated, then both systems are connected and when you ring up a sale, the amount due shows up on your payment system.
If you are working with a payment processor that you are happy with, look for POS systems that integrate with your processor. If you can’t seem to find any, you can ask your account representative. If you are open to switching payment processors, I suggest looking for a POS system that has built-in payment processing. The processing rates might not be the lowest, but they will be competitive. And, you don’t have to worry about different systems working together, or dealing with customer service from multiple companies. Most POS systems with built-in payment processing offer flat-rate fees, which are pretty transparent and straightforward.
2. Learn What Features are Available
All POS systems generally advertise similar features, but with very different results. Overall, you want a POS system that can manage all areas of your business: inventory, sales reports, customer relationship management and loyalty, and employee management. Look for systems that have all the elements you need included in their base price. Here are some of the specific things to look for.
• Inventory Management
If you have a lot of SKUs, look for a POS system that can accomodate an unlimited number of products. Also make sure that you can bulk upload products into the POS system with your existing spreadsheets, instead of having to manually enter each item individually.
• Analytics and Reporting
Look for systems that offer multiple types of sales reports. For example, in addition to daily sales totals, you should be able to view sales by product category, item type, employee, time of day, and more. You should also be able to view your top spending customers, your top-selling employees, and your fastest-growing product categories. Ideally, the POS should allow you to create custom reports based on different criteria. Also make sure that you can export reports.
• CRM and Loyalty
Customer relationship management and loyalty features are very important because they allow you to track customers and streamline marketing efforts. However, many POS systems charge extra for these features. So, make sure this is included in the base price. Loyalty program and CRM add-ons are typically $25 – $40 extra per month when they are not included.
POS systems should include a customer directory so that you can enter information and track their spending. Systems like Square automatically track customers by their payment method and save customers’ digital receipt preferences. Make sure there are tools to communicate with customers via text or email directly from the POS, and ways to segment customers based on purchasing history, location, etc, for targeted marketing efforts.
Many POS systems also include or have optional points-based loyalty programs. These programs reward customers after purchases, and remind them to come in to redeem rewards via text or email. Choosing a system like Loyverse that has this feature built-in is a really easy way to automate some basic marketing.
• Employee Management
A POS system can help you schedule employee shifts, communicate schedules with employees, and provide a centralized place for employees to switch shifts or send messages. A POS system can also provide sales and traffic data to help you staff your store based on concrete numbers.
Many POS systems also have tools to create individual logins and permission levels for each employee. You can track when they clock-in, clock-out, and their activity during each shift including sales data. Some POS systems also have automated payroll systems, so you can easily implement direct deposit and not have to manually calculate anything.
• Ecommerce Capabilities
If you only sell in-store, and don’t have any plans to expand to online sales, these features are not as important. But, if you currently sell or want to sell both online and in-person, choose a POS system that can do it all. For example, Shopify is a leading ecommerce platform, but they also offer a robust in-store POS system with built-in payment processing. Having a system that can manage both sales channels means your inventory, customer data, and overall reporting is being managed from one central location.
• Accounting Integration
Many POS systems have direct integrations with popular accounting software programs such as QuickBooks. If you use an account software, make sure your POS system can either integrate with your program, or at least export the data you need in a way that makes it easy to enter.
3. Know What You’re Signing up For
Contracts and fees can vary wildly depending on the POS and payment processing that you choose. If you use a traditional merchant services provider for payment processing, they usually lock you in for a set period of time in a contract. If you opt for payment processing through your point of sale provider, it’s typically a month-to-month agreement. POS systems that have a monthly fee usually offer discounts if you pay for a full year upfront. Others are month-to-month. Each provider operates a little differently, so be sure to read all of the fine print to know exactly what you are committing too, including any cancellation fees.
4. Choose Something that will Grow with You
If you have plans to move into a bigger space, open an additional store location, start selling online, or to wholesale your products to other retailers, make sure to choose a POS system that can handle all of the current and future needs of your business. There are a lot of options on the market. At the end of the day, you don’t want to be stuck with a POS system that is a P.O.S. Take the time to compare options and demo each system.