Updated for relevance April 22, .
I’m frequently asked how to select the best point-of-sale (POS) system software. This is important because a POS system for small businesses can make the difference between knowing what's going on and being left behind.
Understanding POS systems
Point of sale systems for retail stores are easy to grasp: they monitor every function of your location and interface with all data around your customers.
The more data you have and interconnect, the more you can do with your employees and merchandise, and the better you can target your customers. That's how you grow your retail sales. I thought everyone understood that...
However, I had breakfast with a group of retailers and asked them what retail software point-of-sale systems they were using.
One sheepishly replied, “None.”
I tried to wrap my head around why a retail store owner would say that. His excuses were everything from not wanting employees to know how much they were selling to fear of new technology to liking the simplicity of just using a cash drawer. Yikes!
Successful retail stores rely heavily on their software
From online fulfillment systems to buy online pick-up in-store (BOPIS); from tracking loyalty and employee hours to marketing via text and messaging.
A retailer can't grow without investing in software and technology. An article by Forbes Advisor found negligible differences between five major POS providers, so it’s not that they aren’t all good. It’s how their offering works for you.
Therefore, the first question you should ask a potential POS vendor is simple: "How can your software improve the efficiency and profitability of our business?"
From their initial answer, you’ll want to ask the following list of questions. And these aren’t just random questions but ones I validated from retailers who wished they’d asked many of them before purchasing their system. They even added some of their own.
Be sure you gauge your prospective new POS provider’s answers using a grading system as you ask these questions.
For example:
- 5 – Absolutely, yes
- 3 – Sort of
- 0 – No
50 Must-Ask Questions when buying a POS system
Management
A full-featured POS system can show you the busiest times of your week so you know how to schedule.
Elanda Product Page
With robust reporting features, you can understand your best-selling items and those that are not. You can also learn the percentage of customers who are new versus returning.
But remember, reports are only good if you use them. You want the information you need most to be automatically emailed to you each week so you can spot trends and opportunities in both merchandise and employee performance.
These are the questions to ask in this area:
- Can I schedule the necessary reports to at the end of each week/month automatically?
- Will I be able to set store and employee goals and track performance against those goals automatically?
- How do you store my customer data safely?
- Can I order directly from the POS based on inventory alerts and reports?
- How do we keep track of individual sales; do we have to log in each time, swipe a card, etc.?
- Do you have specific options by category—like shoes or apparel—where the colors or customization of one product have dozens of varieties?
- Can I access the system remotely?
- Does your system update automatically, or must I do it manually?
- Do you have the ability to integrate fitting room technology like Alert Technologies and traffic counting software like ShopperTrak?
- Do you offer custom fields that are both searchable and exportable?
- Do I have the ability to enter the cost of goods (COGS) to see my margins by category and brand? If so, are there levels of access to that information?
- Do I have the ability to see what is on order by department and store?
Service
A big component of any POS system is how they take care of you after the sale – not the sales representative’s initial pitch. You don’t want to call support to get the information you want. So ask these questions:
- What other retailers can I ask for service recommendations about your support?
- Is your POS system scalable if we add locations or terminals?
- Do you offer a transition team from our old POS system to yours? (Even if they charge a fee, it’s worth it.)
- Do you offer 24/7 technical support, and where is it based?
- While the POS will likely be cloud-based, does it have failsafe backups so I can still make sales if it goes offline?
- Transitioning from our old system, can you import our previous database? Is there a charge?
- How will you offer testing and validation once our old system is updated to yours?
- What if there was a catastrophic failure? How often does your system back up, and what does it take to restore service?
Marketing
A great POS system will collect data into a Customer Relationship Management Program (CRM) so you can interact with customers continuously.
Being able to send emails or text messages has become imperative for brick-and-mortar retailers looking to compete with online retailers. Ask these questions:
- How will you integrate our existing CRM or offer a better one?
- Do you provide an integrated loyalty rewards program that includes purchases, rewards, and CRM?
- Can I query sales by brand and category to create personalized mailings and emails?
- Will your system update contact records with opened and clicked emails?
- Do you offer a scheduling option so employees or designers can set appointments?
Inventory
POS systems in the future will simply read RFID tags embedded in each item, so associates cannot change item prices on their own. You will also have a reader which scans the store in a few minutes and inventories the complete store.
Until then, you’ll want to do as little as possible to maintain your inventory. Questions to ask here are:
- How can you make inventory easy if I have multiple locations?
- How can I transfer and receive merchandise between two stores and keep them separate for budgeting?
- How will you seamlessly integrate with our online store to give me a total view of my inventory?
- When products are entered in the POS, can you automatically update my website with in-stock totals?
- Do you allow having a negative inventory? If so, how is that reconciled?
Register
Remember that your POS’s first function is still to function as a great register. The days of a separate credit card machine are over. Your new POS should be able to integrate with your credit card processor so all data can be tracked and recorded.
Ask these questions:
- Can I easily look up past purchases by customer size and style?
- Will I offer store credit or gift cards instead of just refunds?
- Does it have the ability to connect to various receipt printers or tablets? What about emailing receipts to customers?
- Does it have the ability to view full customer history data from more than one store?
- How do I run comparative sales reports by category, vendor, and item?
- How easy is it for my employees to learn your POS system? Do you offer on-demand video training, or am I stuck with manuals?
- Do you have multiple ways to look for my previous customer history by last name, number, or ? I don't want multiple entries for the same customer.
- How does your system comply with PCI (Payment Card Industry Data Security Standards) and EMV cards?
- If I decide to stay with my current payment processor, which means you’ll have the additional hassle of figuring out who to call if something goes down, does your POS system offer integrated processing?
- How does it accept NFC payments like PayPal, Apple Pay, and the rest?
- Will your POS system sync with my existing bookkeeping software?
- Will your POS system automatically add units if I oversell?
- Can I reprint receipts if someone comes in without theirs for a return?
- Does your system show units per transaction on all receipts?
- Is a time clock integral, and does it give dollars sold per hour worked by each employee?
- Can I upload a picture of an item so my retail employees can match the item and avoid switched tags?
- Do you offer mobile checkout from various devices without an associate having to come to a counter?
- Does the Point of Sale map to your accounting system to record sales and COGS?
- Does the POS system’s register integrate with your scale?
Beware of these Common POS Frustrations for Retailers
- You can't upload spreadsheets from vendors, and you have to enter the data manually.
- You receive support rather than .
- There is no customization of reporting.
- You have to do too many workarounds to get what you need.
- You must manually update your website, which is inefficient and requires extra work.
- There might be gotcha fees after purchase; ensure all ongoing fees are spelled out.
- You shouldn't need an IT person on staff to manage it.
Finding the right POS system for your needs is not easy, and there are many variables.
Expect to pay for convenience and intuitive interfaces as well as additional services. However, like retail sales training, I don’t see the purchase as a cost but as an investment.
No one system is perfect right out of the box, but the more confident you are about your business future, the more you will look for new tools you can use to engage your customers more often and in a higher, more personalized manner.
Point-of-sale systems are essential for every retail store
Everyone has an outside passion apart from their job. You know well-made tools make your passion, whether building, gardening, or cooking, more efficient.
A fully featured POS system capable of mobile payments and sophisticated CRM tools can help you better understand your customers, stay on top of your inventory, and make more money by avoiding out-of-stock and database errors.
Much like when looking for a new doctor, many people rely on their contacts for a recommendation before jumping in to find a new one. POS systems can be overwhelming in terms of the breadth and depth of their abilities, and your eyes can glaze over quickly.
The world of POS systems is dominated by some big players who usually lead the developmental charge. Here are some service providers you might be interested in checking out in no particular order:
- Lightspeed Retail
- First Data Clover Station
- Shopify POS
- NCR Silver
- Square Point of Sale
- Manhattan Associates
And if you are looking at LIghtspeed, you'll want to check my affiliate link here to get special bonuses.
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