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What is Point of Sale (POS)?

And Why it is Essential for a Retail Business

POS or PoS is an abbreviation for Point of Sale (or Point-of-Sale, or Point of Service). The term is applicable to a retail shop or store, the checkout/cashier counter in the store, or a location where such transactions can occur in this type of environment. It can also apply to the actual Point of Sale (POS) Hardware & Software including but not limited to : electronic cash register systems, touch-screen display, barcode scanners, receipt printers, scales and pole displays. Point of Sale Systems are utilized in many different industries, ranging from restaurants, hotels & hospitality businesses, nail/beauty salons, casinos, stadiums, and let's not forget - the retail environments. In the most basic sense, if something can be exchanged for monetary value - a Point of Sale System can be used.

Point of Sale Check-out Counter
 Check-out Counter

Check-out Counter / Cashier

A Check-out Counter, Cashier Stand - is the aisle (or station) where individuals transport and place the items or products they have chosen to purchase from the location, a good example would be a supermarket (e.g. Wallmart) or department store (e.g. Macys). Although for such environments as supermarkets is usually a long counter, which most often makes use of moving belts, and contains a photocell to stop it once items reach the end - it can also refer to a single register at a smaller store. The cashier scans and rings up each item on the cash register and obtains the total. All items are placed in bags while customer makes payment.

Point of Sale (POS) Technology

The term Point of Sale is often used in connection or relative with the hardware and software for checkouts. In the case of some locations, with wireless capable systems or network wired via TCP/IP.

Point of Sale Systems made huge advancements from the mechanical cash registers of the first half of the 20th century. An example of such type of registers were the NCR models, operated by a crank, and the lever-operated Burroughs registers. These registers recorded data on paper tapes or journal tapes and required extra steps to transcribe the information into the retailer's accounting platform. The obvious next step in evolution of the POS was to convert the mechanical workings into electrical. An example of such type of register was the NCR Class 5 model. In 1973, new registers that were operated by computers were introduced, such as the IBM 3653 Store System and the NCR 2150. The other computer-based manufacturers were Rigitel, TRW, and Datachecked. That same year brought about the introduction of the UPC/EAN barcode readers that integrated with Point of Sale Systems. And in 1986, the Point of Sale Systems became based on PC (Personal Computer) technology with the introduction of the IBM 4683.

During most of late 1980s and throughout the 90s, stand alone credit card devices were developed and introduced so that credit card processing could be more easily and securely integrated. Some popular examples include the VeriFone Tranz 330, Hypercom T7 Plus, or Lipman Nurit 2085. These relatively simple devices (compared to technologies today) have evolved in recent years to provide processing of multiple applications (credit cards, debit cards, gift cards, EBT cards) and also provide age verification & employee time clock. All processes can now reside on a single device. Certain wireless Point of Sale systems not only allow for mobile payment processing but in the case of restaurants, they also allow servers processing of the entire order at the tables.

Currently, retail POS Systems were among the most sophisticated, powerful and user friendly computer networks in commercial usage. In fact, most Point of Sale Systems do much more than just "Point of Sale" tasks.Even for the smaller tier 4 & 5 retailers, there are Point of Sale Solutions available that include fully integrated accounting, inventory tracking & management, open-to-buy forecasting, customer relation management (CRM), service management, rental services, operation reporting and payroll modules.

Being that all of these features and functions are available, one will commonly hear a variety of terms being used when referring to a certain POS Software Application. Those terms can include: multi-location management system, retail management software, business management software and Point of Sale (POS) software.

Point of Sale Technology

Integration, Integration and Integration

Nowadays, Point of Sale Software is as only good as its integration with the many popular software & services. Examples of such software would be accounting programs, where all of the daily activities and transactions would automatically imported into accounting without any labor on the user's end.

With the booming popularity of online shopping, many businesses are choosing to operate on and off-line. Due to the lucrative market and the worldwide exposure without opening up a physical store, many are even selling exclusively online. For these businesses that operate in both environments, it is imperative that they both are in sync.

That's where Point of Sale Integration with an E-Commerce Storefront becomes something that is of a necessity. Although such solutions aren't widely available yet, alot of Point of Sale Software developers are starting to provide such offerings. One of such software is Onsight™ Point of Sale Software by POSmatic, Inc.

Electronic Cash Registers
 Typical Electronic Cash Registers

History of Early POS Systems

The early electronic cash registers (ECR) were programmed and developed in proprietary software and were limited in functions and communications capability. In 1973 August, IBM announced the 3650 and 3660 Store Systems that were, in essence - a mainframe computer packaged as a store back end that could control 128 IBM 3653/3663 Point of Sale Registers. This system was the first commercial use of client-server technology, peer-to-peer communications, Local Area Network (LAN) simultaneous backup, and remote initialization. By mid-1974, the system was installed in Pathmark Stores in New Jersey and Dillards Department Stores.

The programmability of such systems allowed retailers to be more creative. In 1979, Gene Mosher's Old Canal Cafe in Syracuse, New York was using Point of Sale Software written by Mosher that operated on an Apple II to receive customer orders at the restaurant's front entrance then print the complete preparation details in the kitchen. With such process in place, customers would often proceed to their tables to find their food already waiting for them. The software also included real time labor and food cost reports.

In 1985, Mosher introduced the first color touch-screen driven POS interface. This software operated on the Atari ST, which was the world's first consumer-level color graphic computer. By the end of the 20th Century, Mosher's promotion of this un patented software paradigm had led to its worldwide adoption by many cash register manufacturers and other Point of Sale Software developers as the de facto standard for POS Software Systems.

Fast forward to now, most of the major retailer and even the small "mom and pop" shops or the world use Point of Sale Software/Systems.

Credit Card Reader
 Typical Credit Card Reader

Point of Sale Hardware Interface Standardization

Many initiatives to standardize development of computerized Point of Sale Systems have been made to alleviate inter-connecting POS devices. Two of such initiatives are OPOS and JavaPOS, both conforming to the UnifiedPOS standard, which is a standard led by The National Retail Foundation.

OPOS, short for OLE for Point of Sale, was the first commonly adopted standard and was initiated by Microsoft, NCR Corporation, Epson and Fujitsu-ICL. OPOS is a COM-based interface compatible with all "COM-enabled" programming languages for Microsoft Windows. With its first release in 1996, it is now offered in many Point of Sale Systems.

JavaPOS was initiated by Sun Microsystems, IBM, and NCR Corporation in 1997 and was first released to the public in 1999. As the name implies, JavaPOS is for Java what OPOS is for Microsoft Windows. And thus largely platform independent.

Point of Sale (POS) Communication Protocols

There are several communication protocols used by Point of Sale Systems to control its attached peripherals. And due to the inter-connectivity nature of Point of Sale Systems, most POS peripherals, such as touch-screen displays and printers support several command protocols in order to work with various different brands of Point of Sale (POS) Terminals and Computers.

Point of Sale in the Retaurant Industry

Point of Sale Systems have truly revolutionized the restaurant industry. It is most evident in fast food franchises. The chains make use of systems that generally use TCP/IP to network all of their POS Stations into a centralized mainframe server. Most of the POS Systems being used these days are made up of a touchscreen display, which helps speed up the whole order-taking process. The accuracy of these systems have helped decrease the time taked to serve and increase the efficiency of the order process.

POS Systems drastically cut down total operating costs and mistakes due to human error. Just imagine how much longer the order process would take if no such solutions existed? For instance, a customer drives upto the drive-thru window and places the order. Then the cashier takes down the order (probably on a piece of paper), receives payment, brings the order slip to the kitchen area for them to start cooking the order then hands it to the customer. The few seconds it takes to walk back and forth, although may not seem like much - heavily impacts the overall quantity & quality of the daily sales.

Have any questions? Want to learn more? Feel free to contact us at anytime. We're always available to answer your questions and address your concerns.

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