subject: How A Point Of Sale System Can Help A Retail Business [print this page] In their 40 years of existence, point of sale systems have increasingly benefited retail businesses. Not only do they provide better customer service, they cut costs by automating previously manual functions. Following is a brief tour at some of the ways that a point of sale system is good for a retail business.
The term point of sale (POS) system should not require much explanation. It refers to a computer system that is used at the point where customer sales are processed. Before their development, many functions associated with sales were performed either after the sale, at a different location, or both of the above. Many benefits accrue from integrating these related functions into the time and place of the customer transactions.
You may be old enough to remember price stickers on grocery items. POS systems eliminated the need for them some time ago. Now, the POS system scans the bar code on the item and uses it to look up the price. Items sold by the pound are automatically weighed and have their cost calculated.
Not all retail stores identify their customers, but those who do often benefit from it in better sales information and better customer service. POS systems can support this fairly efficiently. It can be very useful for a salesperson to know something about the customer. Grocery stores often give special discounts to customers who identify themselves.
If items are being sold from inventory, then a POS function may be to update the inventory database. Since items are typically scanned for bar codes, it is usually easy to determine what inventory items are being sold. This is incredibly more cost effective than other more manual ways of doing inventory.
You have certainly seen customers enter payment information by swiping a card through a card reader and entering their PIN on a PIN pad. The POS system manages all of this payment processing. If the customer is known to the system, even more payment automation may be possible. If there is any cash going to or coming from the customer, the POS system will manage this as well.
If a debit or credit card is used for payment, the POS system will initiate processing with the merchant's POS transaction bank. The bank can approve or reject the payment. Eventually the transaction will be settled by taking the money from the customer's account and putting it into the merchant's account. If this is initiated separately, then the POS system will usually do this.
The savings to the business from all of this integration and automation are impressive. Customer service is improved as well. Of course, since most similar businesses probably have similar systems by now, the business usually doesn't achieve a competitive advantage, unless it is doing something novel with the system. However, lower cost and higher efficiency both provide benefits to society as a whole.
by: Yasha Aghayi.
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