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How Do POS Systems Work?

A POS (point of sale) system is a suite of technology used by merchants and restaurant owners to accept payment from customers among other things. These are the software and hardware that a retail business requires to run its operations.

The point of sale is a hub for retailers to run and grow their businesses in several ways, including managing inventory and processing transactions, as well as managing customers and staff.

POS systems guide customers through a series of steps that end in successful purchases. Typically, they work as follows:

  • The customer selects an item(s)

A buyer may present physical items to the store’s checkout kiosk or view their digital shopping cart to make a payment.

  • POS systems price the item(s)

POS software tally the total cost of the customer’s item, including taxes and tips. Discount management is a common feature of POS software. The software tracks how coupons and promo codes are used by customers.

  • The buyer pays

Payments are typically made by credit card, cash, or check. To facilitate the use of POS systems, corresponding hardware includes cash drawers, card or check readers, and receipt printers.

  • POS systems complete the transaction

The software calculates how much the customer owes and how much change may be due. A cashier or an automated machine returns any change manually at this point. After they make a purchase, online shoppers are directed to a post-purchase page with relevant information.

  • POS systems are capable of so much more than tracking sales

You can gain insights into customer behavior, monitor inventory in real time, and much more with the right software.