The Best Point-of-Sale (POS) Systems

What Is a Point-of-Sale (POS) System?

You may think of point-of-sale (PoS) systems as just ordinary cash registers, but they're evolving to do much more. They can integrate with mobile devices and cloud services and satisfy the software and hardware requirements of users. In addition, you can use them with back-end accounting systems and credit card payment processors. Many small to midsize businesses (SMBs) are using these types of cloud-enabled POS services without the need to keep a physical back-end server in multiple locations.

POS systems now integrate more seamlessly with other back-end applications such as customer relationship management (CRM) and inventory management.

While there are several kinds of payment processing solutions available, including credit card readers and various new mobile payment methods, the POS systems we reviewed are full-on cash registers. This means they communicate with back-end accounting software and can handle multiple kinds of payments.

Despite the cash register motif, however, when people talk about POS systems, they're mostly referring to the software, which could be client-based or cloud-based. That's because it's the software that lets you track sales, issue receipts, and perform back-office functions. Such functions include replacing inventory, tracking employee productivity, and noting what sells and what doesn't. The POS systems we reviewed are predominantly focused on SMBs that sell from one to 25 outlets, although a few may handle up to 100.

Another important aspect of POS software is broad support for new payment systems. Your customers may be primarily using one or two payment methods now, but give how quickly payment options can change, those customers may be asking for new options soon. It's best to have a POS system in place that has payment flexibility built-in rather than having to swap out a new system. If you're wondering what kinds of payment options your POS should support, consider the chart of popular brick-and-mortar payment methods compiled by market research firm Statista from a consumer survey the firm conducted in March 2019.

Most Popular Consumer Payment Methods, 2018-2019

(Image credit: Statista)

Key Software Features

The point of a good POS system is to let you get paid for products and services. There are a variety of ways that people get paid today and your POS system should handle all of the methods you need, including cash, checks, and credit and debit cards. Some, but not all, also accept "contactless" payment types, such as Amazon Pay or Apple Pay.

An important factor to note is that the introduction of Europay, MasterCard, and Visa (EMV), or chipped cards, has complicated things somewhat for small vendors. EMV is the standard that is said to provide more security than the swipe-and-sign tech we've been using for the past decade or so. The ability to "dip" these cards means additional or new hardware for which some POS systems charge a bit extra.

Once you get past the minimum functionality, then depending on the needs of your business, there are other features that you'll want to look for. These features include the ability for customers to use two types of payment, for example, or to allow for returns, special pricing (for sales or special customers), gift cards, and surge pricing.

Another fast-growing standard is the near-field communications (NFC) transaction, which is an electronic payment system being popularized by mobile giants such as Apple Pay and Google Wallet . Making sure your POS system candidate can handle these new emerging systems is only half of the equation. The other half includes whether or not that implementation will annoy or please your customers as well as whether or not it will help or hinder your Payment Card Industry Data Security Standard (PCI DSS)-compliance efforts.

Another critical area may not be a POS trend but it's still something you'll need to be very careful attention to: product support. If the system crashes at the start of your busy period, then how easy is to get someone on the phone? That's a question that can often be solved by paying for the appropriate support plan. But just because you have someone on the phone doesn't mean your system is back online; you're still losing revenue every time an impatient customer walks out of the store. A backup solution is essential here and that's especially true in the case of cloud-based POS systems. These systems can suffer not only from software problems but also from internet connectivity issues. Ensuring that your vendor has your back in these situations is key, but knowing exactly how and where that support will come from is critical, too. A little more on this later.

Hardware Considerations

And while the software half of the POS system equation is probably most important, especially in a cloud-based solution, many retail businesses will still require a hardware half. In that vein, one of the most popular trends in today's POS systems is mobility. This refers to the ability to move POS functionality out from behind the cash register station and into the hands of roving employees for faster, more customer-centric business transactions. This trend adds new areas of importance to even the usual POS system setup, including an added focus on wireless connectivity, security, and support for tablet or even smartphone endpoints. Most modern POS systems run on generally available tablets such as an Apple iPad ($765.46 at Amazon) or a Microsoft Surface Pro. Many also offer dedicated hardware systems and add-ons, such as card swipers, receipt printers, cash drawers, and barcode scanners.

The advantage of tablet-based systems is in their mobility. You can process payments on your store's floor (especially useful for cutting down lines at the register during busy seasons), at an expo, or at an outdoor pop-up shop. Systems such as Square Point of Sale are known for offering small dongles that connect to a tablet and let you swipe credit cards on the go. While you may not immediately need this type of mobility, it is good to know that it's available.

Another advantage is the amount of information that you can supply customers. A desktop POS device can sometimes be flipped so that the customer can sign on the screen or enter contact information. In addition, some states (such as California) now require some kind of customer-facing screen be available so customers can view sales information as a sale is rung up.

Back-Office Functionality

Today's robust POS systems are more than just about taking payments. They can effectively track your inventory, customers, and employees. A good POS system needs to be able to track what has been sold and how many items remain. When the items are sold out, a POS system can notify you ahead of time so you can restock. Businesses can expect their POS system to be able to subgroup items; for example, it should tell you if you're out of blue birdcages but still have three red birdcages. You should be able to print out barcodes for any items that don't already have Universal Product Codes (UPCs) so that you can scan them during a sale.

The ability to provide analytics is another key feature some POS systems offer. Analytics enables businesses to see what products sell when and to whom. If it is possible to predict that twice as many red coffee cups are sold in November than in April, then you'll know how many to order. If your sales of low-cost candy goes radically up every weekday when the local kids get out of school, then you might want to hire an extra salesperson in the afternoons to help handle things

Employee tracking is also useful. Your POS system should be able to clock your employees in and out, and offer different levels of security depending on a employees' status. This way, a cashier, for example, won't have access to the same back-office functions that a manager has.

Finally, it is useful for a POS system to collect customer information that can be utilized for loyalty programs and other promotional strategies. Some systems offer functionality which is close to that offered by CMS packages; for example, sending emails to customers to thank them for sales, advertise bargains or offer coupons, and offer other loyalty perks.

Something to be aware of: Make sure your POS system can function offline. Networks can go down at the most inconvenient moments, especially if you are selling at an in-person event. You'll want to be able to keep selling even though your POS system may be temporarily out of contact with your back office.

And if you want to do business online as well as in person, some POS systems offer the ability to create an online store that will pull from the same inventory database as your brick-and-mortar store. In fact, an online presence has become so necessary that some systems, such as Shopify POS and Vend POS, include it as part of their package. If you're starting a small retail business, then it could be an important feature to consider.

While all this data is certainly valuable, consolidating it to a central location, especially if you've got multiple retail locations, can get not only complicated, but also risks lots of personal data on the open Internet. To help, consider storing the data with a secure, business-grade cloud storage provider, and making sure that all sessions between the POS system and any remote destination are secured by a virtual private network (VPN).

Processing Payments

Keep in mind that, if you are going to be accepting credit and debit cards (and most businesses must), you're going to need a service that can process those payments. That service is also going to cost you a percentage of your take. A few services, such as Square Point of Sale, offer POS services for free, as long as you process your payments through them. Others, such as Intuit QuickBooks Point of Sale and Shopify POS, charge a monthly subscription rate for use of the software and an additional fee for processing payments. Still others, such as NCR Silver and Vend POS, do not provide processing services themselves but work with a number of third parties. Others that do provide their own processing services will also work with third-party processors. Of the products we cover here in this POS system review roundup, only NCR Silver charges a single, one-time price for its software.

As a result, you will need to think about your needs and how they relate to the POS system that you choose. If you are already using a payment-processing service and want to stick with it, then you will want to look at POS systems which work with that system (usually called "integrated processing" since the outside company's payments are integrated into the POS). However, if you are starting from scratch, then a POS system that offers an all-in-one service can be very convenient. If something goes wrong, then you'll know who to call.

Product Support

POS systems are built to be as simple to operate as possible and most of them are. But things can always go wrong, especially when you're dealing with back-office functions such as inventory or personnel management. Therefore, it's always a good idea to have a good support system in place. Most POS system vendors offer a wide range of support, starting with articles, videos, and tutorials on how to use their products. Most also provide setup assistance, either as part of the package or for an extra fee.

If you operate a business that has weekend or late hours, then you will probably want to look for a POS system supplier that offers 24/7 support services as you don't want to find yourself without help during a busy Sunday sale.

To help evaluate each POS system, in each review we've included a SmartScore and Customer Satisfaction Rating from a website called FinancesOnline, which evaluates financial solutions. According to the FinancesOnline website, it calculates its SmartScores based on a POS system's main functionalities and features as well as its "collaboration features, customization, integration with other apps, customer support, and mobility. All these factors are taken into account when calculating the final score (on a 1 to 10 scale)." FinancesOnline draws its customer satisfaction ratings from its proprietary Customer Satisfaction Algorithm that "gathers user reviews, comments, and opinions across a wide range of social media and calculates a satisfaction rating based on what people think about the product."

Attract More Sales

In the end, a good POS system enables you to easily make sales, track sales, and enhance your ability to attract more customers, which depends on your special needs. Once you have selected the system that seem to suit your type and size of business, talk to its representatives. Then try it out and make sure that it offers all of the features that won't only fit your company now but also in the coming years.