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What is a POS System?

A cash register is the most basic component of a point of sale system.
Grocery stores commonly employ POS systems.
Small boutiques rarely need more than a basic POS system, although some employ systems to help them with inventory control.
Modern POS systems are usually linked to software which can be used to track, analyze and report on sales.
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  • Written By: Mary McMahon
  • Edited By: Bronwyn Harris
  • Last Modified Date: 09 November 2014
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A Point of Sale (POS) system is a system for managing the sales of retail goods. The term is used to refer to the software and hardware associated with check out stands, and all of the bundled features which are included. Most retailers use this type of system at their checkstands or counters, and several major manufacturers offer ones designed for various types of businesses, ranging from grocery stores to clothing boutiques. Using a POS system makes a business much more efficient, lowering the costs of doing business while improving customer service and making the environment more pleasant to work in.

In the retail trade, the “point of sale” is the moment when a customer walks up to a counter with goods and prepares to purchase them. A POS system handles the transaction, whether it takes the form of an adding machine and a hand written receipt pad or a complex computer system. Except in the case of very small businesses, modern ones usually take the form of a computer system.

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The most basic POS computer system is an electronic cash register. The clerk can ring up goods in the cash register and produce a receipt for the customer. At the end of the day, various cash register functions can be used to print out daily reports that are used to reconcile the cash register and to prepare a deposit. More complex cash registers are capable of extremely detailed reports, and they have memory functions that allow users to look up reports from the past or generate monthly and yearly reports.

A more complex POS system, however, includes many bundled features. Many systems have inventory management capabilities, where each piece of merchandise is entered into a database so that it can be tracked. Some systems also allow store buyers to generate purchase orders from within the system, using data about sales and product popularity. Time clocks and other accounting features, such as credit card verification, may be integrated as well. Human resources may keep personnel records within the system, in a separate password protected area.

The hardware is also distinctive and important. A typical system includes a display screen for the clerk, a customer display, a cash drawer, a credit card swiping system, a printer, and a bar code scanner, along with the computer loaded with the POS software. Custom features may be added or removed, depending on the industry. A restaurant system, for example, may have a feature that prints order tickets directly in the kitchen, or a grocery store may have an integrated scale for weighing goods.

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anon939294
Post 17

The POS system software can typically handle myriad customer based functions such as sales, returns, exchanges, layaways, gift cards, gift registries, customer loyalty programs, promotions, discounts and much more. POS software can also allow for functions such as pre-planned promotional sales, manufacturer coupon validation, foreign currency handling and multiple payment types.

anon262252
Post 15

POS is also used for most projects for resource allocation.

anon233482
Post 14

When I buy an original t-shirt, I am not sure what system they used at the counter. It is just marked as POS. It could be like yours.

pos123
Post 13

Thanks! Learned more about Point of Sale through your post. It is indeed very feasible nowadays. I was just wondering what's the best POS Software in the market?

anon216796
Post 12

Pretty helpful post! I've been looking around trying to find helpful stuff about POS Software and good thing I stumbled upon your site. I love the content!

anon185699
Post 11

The brief introduction is really good, and can give readers to grasp general idea of the POS functionalities.

But if it can provide links for advanced level of knowledge of POS, it may make the picture complete.

anon162051
Post 10

EPoS is probably becoming an increasingly popular term, as opposed to PoS. Intelligent Retail (that's where I'm from) sells EPoS Software to many smaller retailers across the UK.

anon158622
Post 9

One of the more popular retail point of sale system is Quickbooks POS System. Quickbooks point of sale system includes the POS software, barcode scanner, cash register, credit card reader, receipt printer. They have the Basic and Pro packages and the latest version is Version 10.0

anon148906
Post 8

Pos systems are of great benefits to individuals and companies, as it tends to ease the pressure for accounting, and inventory management.

anon131117
Post 6

does a pos system helps a customer to search for any desired product and order them at the terminal itself? please answer.

anon113392
Post 5

POS software systems is great for most businesses. You can always find one that fits your needs.

anon45196
Post 4

It depends on the software and the size of the system you purchase.

jksala
Post 1

Is it a requirement for Point of sale systems to have a server of some description?

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