Point of sale systems – features and benefits guide.

As a retailer, you have a lot on your plate – there’s stock to order, invoices to pay and sales reports to prepare. And that’s just the start. A point of sale (POS) system can help to lighten the load.

What is a point of sale system?

A POS system allows your customers to pay for the products and services they purchase from your store. It’s generally comprised of both point of sale software and hardware, which work together to streamline your payment processes.

What does a point of sale (POS) system do?

Point of sale is simply the place where a customer makes a purchase from you. Traditionally that was in-store. But today it could be in-store, online or via a mobile app. A point of sale system ensures this process is smooth, merging all payment information including inventory, sales, and customer management.

It primarily performs the functions of a basic cash register:

  • Conducting transactions
  • Adding taxes
  • Creating receipts
  • Tracking sales

But you can also count on a POS system to assist with more advanced tasks such as inventory management, vendor communications and managing the costs of employee labor.

Benefits of a point of sale (POS) system.

A POS system can revolutionize your eCommerce experience. By integrating with your eCommerce store, you can eliminate manual data entry, keep tabs on inventory in real-time, offer cross-channel promotions and customer incentives, and support in-store returns and pickups. 

Key benefits include:

  • More accuracy, less human error
    Cashier mistakes can cost a retail business as much as one-third of their profits per year. Eliminate manual data input to significantly reduce the risk of human error.
  • Simple reporting, smarter decisioning
    Reporting can be daunting. A POS system can simplify it with reports that provide useful data in real-time and inform better decision making.
  • Reminders when stock is low
    A quality POS system will offer an easy way to track your product sales and inform you of when it’s time to order more stock.
  • Fast transactions for busy customers
    Customers demand speed and convenience. A POS system delivers by facilitating quick transactions – a great alternative to manually serving customers. 
  • Additional payment options
    Multiple payment options are the norm. Customers will appreciate being able to use their credit or debit card, Apple Pay, Venmo, or Zelle to pay.

Types of point of sale (POS) systems.

There are two primary types of POS systems: on-premise and cloud-based.

On-premise POS systems. 

With an on-premise system, the point of sale software is installed and held on a server in your facility. It may look similar to a touchscreen monitor or desktop computer.

Key points:

  • Once you invest in an on-premise POS system, it houses data with no ongoing data hosting fees.
  • You’ll have to pay for technical support, software licenses, and training fees to maintain and update the system
  • You must have the physical space to store its architecture, database, and more.

Cloud-based POS systems.

A cloud-based POS system is installed remotely and connected to the internet with your data stored remotely in the cloud. Remember you can’t access your data without Wi-Fi or mobile broadband. 

Key points:

  • With your data stored remotely, you can monitor your business from anywhere at any time.
  • Automatic updates save valuable time otherwise dedicated to manual updates.
  • Minimal technical support costs, training fees, and software licensing expenses.

Top tip: Before you decide upon a cloud-based POS system, understand who will own the data. Be clear how it’s backed up and recovered too, so you can avoid issues if switching providers.

Other point of sale (POS) system types.

  • Mobile POS: Accept payments on a mobile device. Ideal if you run a food truck, home repair services, or another business continually on the go.
  • Retail POS: Designed specifically for retail. They let you track customer profiles, offer discounts, sell gift cards, and provide purchase orders.
  • Multichannel POS: These systems can integrate with your website, social media, third-party marketplaces, and other channels.


What is included in a POS system?

POS systems will typically include a mixture of point of sale software and hardware, including:

  • Point of sale terminal: The POS terminal is the central admin that controls the entire system.
  • Barcode scanner: Scans barcodes and add discount codes. It’s often used with retail POS systems and can streamline the checkout process. 
  • Receipt generation: Printer will be included to generate paper receipts and also provide the option to generate digital receipts.
  • Credit card machine: With a credit card machine, you can process any payments made by debit or credit cards.
  • Cash drawer: Many customers prefer to pay by card. But a cash drawer offers a safe, secure place to store funds, checks, vouchers, and receipts.
  • Scales: An important feature if you sell products by weight, as it simplifies determining how much to charge customers.

How does the point of sale system work?

POS systems provide the following baseline capabilities.

Keep track of inventory.

Regardless of whether products are at your store, a warehouse, or a third-party fulfillment center, managing inventory can be daunting. Point of sale software helps minimize guesswork and manual errors. Use a POS system to ensure you have enough products in the right place at right time.

Manage customer and sales data.

A POS system lets you collect and track customer information such as customer names, addresses, and order histories. Use this data to pinpoint your most loyal customers and gain a better understanding of the customer segments you plan to target in the future.

You can also track key sales metrics like in-store and online sales, sales per employee, and sales per channel. This information is essential to make informed, data-driven business decisions.

Fulfillment options.

To succeed in today’s increasingly competitive marketplace, you must find creative ways to boost sales. A POS system can make this easier by offering in-store pickup, home delivery, and in-store returns for online purchases. Such flexibility is a great way to appeal to your customers while diversifying your revenue stream.

Choosing a point of sale (POS) system.

There are countless options on the market. The following tips can help you select the best POS system for your business.

Define your business needs.

Almost every POS system can help you manage inventory and sales. But what else? Do you need a system that accepts various payment options? Is reporting important for your sales team?

Decide on POS system type.

Your chosen industry will also help you determine the type of point of sale software you need. If you’re a dog groomer who travels to your customers, a mobile POS is likely the way to go. 

Decide upon your POS budget.

POS systems vary in price. While some are basic and less expensive, others are state-of-the-art and cost more. Ask yourself how much you’d like to spend on your POS system? What pricing model do you prefer? Remember, the least expensive option isn’t necessarily best.

Set customer service expectations.

Point of sale software malfunctions cost. Consider your customer service expectations in the event of a system failure. Are you okay waiting a few days for a response via phone or email? Or is online chat or round-the-clock support a must-have?

Essential features of a point of sale (POS) system.

Before you commit to purchasing a POS system, make sure it has the following features at a minimum.

  • Inventory management: Processing payments and tracking inventory are essential. Also prioritize integration with your ERP software to receive detailed inventory and audience insights.
  • Customized reporting: Make sure your POS system can automatically run and create inventory, sales, and accounting reports. These reports are essential to your business.
  • Multiple payment options: Consider solutions which accept payment from virtual options such as Venmo, Zelle, and Apple Pay to accommodate a wider range of customers.
  • Customer relationship management:  A good POS system can record customer information and track purchases. So you can see everything from what was bought to how it was paid for.
  • Marketing tools: Your system should facilitate the building of an email list so promotional emails can be sent out to your customers. Assistance selling on Facebook and Instagram is also desirable.
  • Employee management: The ability to set up multiple employee logins to set permission levels and track user activity is essential. Scheduling features can ease workflow.

Why choose Adobe Commerce to support your POS?

Adobe Commerce, powered by Magento is an eCommerce platform which integrates with a variety of high quality POS systems. It also offers an array of features which makes it easy to:

  • Manage customer relations
  • Track sales data and conversion rates
  • Manage inventory
  • Maintain an omnichannel experience

Explore point of sale extensions for Magento, powered by Adobe Commerce.