Point of Sale

Points of sale at a Target store

Point of sale (POS) or checkout is the location where a software is combined with the mobile device.

The combined software, hardware, and peripheral devices at a POS station manage the selling process, typically driven by a sales associate or cashier. Modern POS systems now have stations created for the customer to check themselves out by scanning and bagging their own items, then paying with a debit or credit card. The POS is sometimes referred to as the Point of Purchase (POP) when discussing it from the retailers perspective.

For SMB retailers, the POS will be customized by retail industry as different industries have different needs. For example, a grocery or candy store will need a scale at the point of sale, while bars and restaurants will need to customize the item sold when a customer has a special meal or drink request. The modern point of sale will also include advanced functionalities to cater to different verticals, such as inventory, CRM, financials, warehousing, and so on, all built into the POS software. Prior to the modern POS, all of these functions were done independently and required the manual re-keying of information, which resulted in a lot of errors.


[edit] History

[edit] Software prior to the 1990s

McDonald’s POS device by Brobeck

Early Electronic Cash Registers (ECR) were controlled with proprietary software and were very limited in function and communications capability. In August 1973 IBM announced the IBM 3650 and 3660 Store Systems that were, in essence, a mainframe computer used as a store controller that could control 128 IBM 3653/3663 point of sale registers. This system was the first commercial use of client-server technology, Dillard’s Department Stores.

One of the first microprocessor-controlled cash register systems was built by William Brobeck and Associates in 1974, for McDonald’s Restaurants.[1] It used the Intel 8008, a very early microprocessor. Each station in the restaurant had its own device which displayed the entire order for a customer—for example: [2] Vanilla Shake, [1] Large Fries, [3] BigMac—using numeric keys and a button for every menu item. By pressing the [Grill] button, a second or third order could be worked on while the first transaction was in progress. When the customer was ready to pay, the [Total] button would calculate the bill, including sales tax for almost any jurisdiction in the United States. This made it accurate for McDonald’s and very convenient for the servers and provided the restaurant owner with a check on the amount that should be in the cash drawers. Up to eight devices were connected to one of two interconnected computers so that printed reports, prices, and taxes could be handled from any desired device by putting it into Manager Mode. In addition to the error-correcting memory, accuracy was enhanced by having three copies of all important data with many numbers stored only as multiples of 3. Should one computer fail, the other could handle the entire store.

ViewTouch POS widget-driven touch screen GUI

In 1986, [5] in Las Vegas Nevada to large crowds visiting the Atari Computer booth. This was the first commercially available POS system with a widget-driven color graphic touch screen interface and was installed in several restaurants in the USA and Canada.

[edit] Modern software (post 1990s)

In 1992 Martin Goodwin and Bob Henry created the first point of sale software that could run on the Microsoft Windows platform named IT Retail.[6] Since then a wide range of POS applications have been developed on platforms such as Windows and Unix. The availability of local processing power, local data storage, networking, and graphical user interface made it possible to develop flexible and highly functional POS systems. Cost of such systems has also declined, as all the components can now be purchased off-the-shelf.

The key requirements that must be met by modern POS systems include: high and consistent operating speed, reliability, ease of use, remote supportability, low cost, and rich functionality. Retailers can reasonably expect to acquire such systems (including hardware) for about $4000 US (2009) per checkout lane.

[edit] Hardware interface standardization (post 1990s)

Vendors and retailers are working to standardize development of computerized POS systems and simplify interconnecting POS devices. Two such initiatives are The National Retail Foundation.

OPOS (Java what OPOS is for Windows, and thus largely platform independent.

There are several communication protocols POS systems use to control peripherals:

  • Epson Esc/POS
  • UTC Standard
  • UTC Enhanced
  • ICD 2002
  • Ultimate
  • CD 5220
  • DSP-800
  • ADM 787/788
  • HP

There are also nearly as many proprietary protocols as there are companies making POS peripherals. EMAX, used by EMAX International, was a combination of AEDEX and IBM dumb terminal.

Most POS peripherals, such as displays and printers, support several of these command protocols in order to work with many different brands of POS terminals and computers.

[edit] Cloud-based POS (post 2000s)

The advent of internet browser. Using the previous advances in the communication protocols for POS’s control of hardware, cloud-based POS systems are independent from platform and operating system limitations. Cloud-based POS systems are also created to be compatible with a wide range of POS hardware.

Cloud-based POS systems are different from traditional POS largely because user data, including sales and inventory, are not stored locally, but in a remote server. The POS system is also not run locally, so there is no installation required.[7]

The advantages of a cloud-based POS are instant centralization of data, ability to access data from anywhere there is internet connection, and lower costs.[8] Cloud-based POS also helped expand POS systems to mobile devices.

[edit] Apple Mac OS X/iOS Based Systems

In recent years, a number of companies have offered Apple-centric POS systems for hospitality and retail including LightSpeed. Some of these function similar to traditional POS systems using client-server models, while newer systems can run in the cloud on iOS based devices.

[edit] Industry

[edit] Retail industry

The retailing industry is one of the predominant users of POS terminals.

A Retail Point of Sales system typically includes a computer, monitor, cash drawer, gift cards, gift registries, customer loyalty programs, BOGOF (buy one get one free), quantity discounts and much more. POS software can also allow for functions such as pre-planned promotional sales, manufacturer coupon validation, foreign currency handling and multiple payment types.

The POS unit handles the sales to the consumer but it is only one part of the entire POS system used in a retail business. “Back-office” computers typically handle other functions of the POS system such as inventory control, purchasing, receiving and transferring of products to and from other locations. Other typical functions of a POS system are to store sales information for reporting purposes, sales trends and cost/price/profit analysis. Customer information may be stored for receivables management, marketing purposes and specific buying analysis. Many retail POS systems include an accounting interface that “feeds” sales and cost of goods information to independent accounting applications.

Recently new applications have been introduced by start-ups and established enterprises that enable POS transactions to be conducted using mobile phones and tablets. New entrants include Square, Intuit’s GoPayments, and NCR Inc.’s Silver platform, ShopKeep POS, and GoPago.[9]

[edit] Hospitality industry

Hospitality point of sales systems are computerized systems incorporating registers, computers and peripheral equipment, usually on a computer network. Like other point of sale systems, these systems keep track of sales, labor and payroll, and can generate records used in accounting and book keeping. They may be accessed remotely by restaurant corporate offices, troubleshooters and other authorized parties.

Point of sales systems have revolutionized the restaurant industry, particularly in the fast food sector. In the most recent technologies, registers are computers, sometimes with touch screens. The registers connect to a server, often referred to as a “store controller” or a “central control unit.” Printers and monitors are also found on the network. Additionally, remote servers can connect to store networks and monitor sales and other store data.

Newer, more sophisticated, systems are getting away from the central database “file server” type system and going to what is called a “cluster database”. This eliminates any crashing or system downtime that can be associated with the back office file server. This technology allows 100% of the information to not only be stored, but also pulled from the local terminal. Thus eliminating the need to rely on a separate server for the system to operate.

The efficiency of such systems has decreased service times and increased efficiency of orders.

Another innovation in technology for the restaurant industry is Wireless POS. Many restaurants with high volume use wireless handheld POS to collect orders which are sent to a server. The server sends required information to the kitchen in real time.

[edit] Hair and beauty industry

Point of sale systems in the hair and beauty industry have become very popular with increased use of computers. In order to run a salon efficiently it is essential to keep all appointments, client, employee roster and the checkout in a system where you can create performance reports for. The nature of salons and spas vary depending on the setup of the business and products offered in addition to the business. This is why POS comes along with most salon software.

[edit] Restaurant business

Restaurant POS refers to point of sale (POS) software that runs on computers, usually touch screen displays. Restaurant POS systems assist businesses to track transactions in real time.

Typical restaurant POS software is able to create and print guest checks, print orders to kitchens and bars for preparation, process credit cards and other payment cards, and run reports. In addition, some systems implement wireless pagers and electronic signature capture devices.

In the fast food industry, displays may be at the front counter, or configured for drive through or walk through cashiering and order taking. Front counter registers take and serve orders at the same terminal, while drive through registers allow orders to be taken at one or more drive through windows, to be cashiered and served at another. In addition to registers, drive through and kitchen displays are used to view orders. Once orders appear they may be deleted or recalled by the touch interface or by bump bars. Drive through systems are often enhanced by the use of drive through wireless (or headset) intercoms.

POS systems are often designed for a variety of clients, and can be programmed by the end users to suit their needs. Some large clients write their own specifications for vendors to implement. In some cases, POS systems are sold and supported by third party distributors, while in other cases they are sold and supported directly by the vendor.

Wireless systems consist of drive though microphones and speakers (often one speaker will serve both purposes), which are wired to a “base station” or “center module.” This will, in turn broadcast to headsets. Headsets may be an all-in-one headset or one connected to a belt pack.

[edit] Hotel business

POS software allows for transfer of meal charges from dining room to guest room with a button or two. It may also need to be integrated with property management software.

[edit] Hardware stores and lumber yards

POS software for this industry is very specialized compared to other industries. POS software must be able to handle special orders, purchase orders, repair orders, service and rental programs as well as typical point of sale functions.

Ruggedized hardware is required for point-of-sale systems used in outdoor environments. Wireless devices, battery powered devices, all-in-one units, and Internet-ready machines are typical in this industry.

[edit] Checkout system

  • General computer hardware
  • General computer software
  • Checkout hardware
  • Checkout software
  • Miscellaneous store hardware

Because of the expense involved with a POS system, the eBay guide recommends that if annual revenue exceeds the threshold of $700,000, investment in a POS system will be advantageous.[10]

POS systems are manufactured and serviced by such firms as the point of sale companies category for complete list).

Point of sales systems in restaurant environments operate on DOS, Windows or Unix environments. They can use a variety of physical layer protocols, though Ethernet is currently the preferred system.

Checkout hardware generally includes a PIN pad with integrated card swipe.

[edit] Accounting forensics

[edit] Tax fraud

POS systems record sales for business and tax purposes. Illegal software dubbed “zappers” is increasingly used on them to falsify these records with a view to evading the payment of taxes.

[edit] See also

[edit] References

This article uses material from the Wikipedia article Point of Sale, which is released under the Creative Commons Attribution-Share-Alike License 3.0.

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