POS Systems: A Shopping Checklist for Your Small Business

Small Business
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POS Systems- A Shopping Checklist for Your Small Business Story

Sure, POS systems allow your small business to process payment transactions, whether cash, credit, debit or mobile payment. But in today’s world, a good system can also help your company improve sales and customer satisfaction, manage inventory and increase overall productivity.

With so many point-of-sale systems on the market, it’s important to compare all the options for your business. Before you go shopping, do your homework.

Compare costs

Ask yourself the following questions:

  • What are the installation costs?
  • Are there additional costs or fees for equipment such as receipt printers, cash registers, tablets and scanners?
  • Does the company require you to pay all at once for hardware, or will they charge you monthly?

The cost of accepting credit cards varies by system. But fees will likely be higher if you enter the numbers manually rather than swipe the card, due to the risk of card-not-present fraud.

For example, Amazon Register charges 2.5% on swiped transactions and 2.99% on manual entries, while PayPal Here charges 2.7% on swipes and 3.5% plus 15 cents on keyed-in transactions. Shopify is one exception, as the system charges between 2.2% and 2.7% on all in-person transactions, depending on your monthly plan.

Nerdwallet looked at pricing and fees, as well as business’ needs, to create a POS systems comparison.

Compare features

The point-of-sale system should have all the features your business needs, says Jared Isaacman, CEO of Harbortouch, a POS technology provider. “That may sound obvious,” he says, “but there are a wide range of systems available that have varying levels of functionality.”

Some POS systems track inventory and information about your customers’ purchases in real time. Purchased items are subtracted from your inventory list, so you’ll know how much of a product is available at any given moment, and you can order more if you’re running short. This can be a useful feature for convenience and grocery stores, restaurants, coffee shops, food trucks, boutiques, liquor stores and retail shops.

Inventory tracking can also give your small business a better picture of which items your customers like the most — or the least — and can help you spot errors if sales and inventory numbers don’t match up. POS systems that offer inventory tracking include Shopify, Clover, ShopKeep and Revel.

“This is critical to avoid lost sales due to stock-outs or poor cash management by over-ordering items,” Isaacman says. “You can even set up automatic reorder alerts to avoid running out of products and losing a sale. And when managing multiple stores, you can also view inventory information across all locations.”

ShopKeep, Clover, Square and Revel allow you to track employees’ work hours, while Revel also allows you to start your own customer rewards program, giving repeat customers the ability to collect points for purchases and redeem rewards.

Businesses that hit the road often, like food trucks and delivery services, may desire a POS system that accepts payments on the go. One example is Square, which comes with a mobile magstripe card reader that connects to iPads. If you know your customers prefer to pay for items using smartphones, you may want to consider a system that can accept mobile payments, such as Clover.

Compare convenience

The POS system should be relatively easy to set up and use so you can avoid spending days training cashiers to use the system. Choosing one that’s too confusing to operate can lead to frustration among employees and can also slow down the speed of service for customers.

“It doesn’t really matter how powerful a solution is if you can’t really use it — a small-business owner has very limited capacity and time to spend fiddling with the solution,” says Christian Nahas, senior vice president of Global Business Solutions at First Data Corp., a payment technology solutions company. “I think when you are doing assessments of systems, simple is going to win every time.”

Retail businesses may prefer a POS system with a barcode scanner that makes checkouts faster to avoid long lines and unhappy customers; restaurant owners may go for a system with a touchscreen, so waiters can easily enter food and beverage orders and print customers’ checks. Nerdwallet recently culled seven of the best POS systems for restaurants.

Compare EMV capabilities

The days of swipe-and-sign credit card transactions are numbered. Starting in October 2015, businesses will be liable for counterfeit fraud if they’ve yet to upgrade their payment technology to accept EMV-enabled cards, which come with a security chip that is scanned with each transaction.

“It’s critical — absolutely critical — that any POS solution is EMV compliant or have an EMV-compliant reader associated with it,” Naha says. “There’s no point in purchasing a POS system without it today.”

Check out Nerdwallet’s list of POS systems to see which ones are EMV compliant, or will be by October 2015.

Compare technical support

Imagine you have a long line of customers waiting to pay for items, and your system crashes.  Whether you run into issues while operating your POS or need help setting it up, having access to professional support is essential — preferably 24/7 support via email, live chat and phone, so you can reach a live person if you need help.

“A POS system is essentially running the everyday operations of your business,” Isaacman says, “so you never want to be left in a situation where you can’t get a quick resolution to a critical problem.”

The bottom line

A good POS system will let your business process payments. But a great point-of-sale system will also be affordable, easy to set up and use, with 24/7 technical support in case you need it, be compliant with EMV credit cards and come with numerous features that suit your small business.

Does your small-business need a POS system?

Compare payment systems

 

Steve Nicastro is a staff writer at NerdWallet, a personal finance website. Email: Steven.N@nerdwallet.com. Twitter: @StevenNicastro.

To get more information about funding options and compare them for your small business, visit NerdWallet’s small-business loans page. For free, personalized answers to questions about financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.


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