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What is a POS System? Definition of Point of Sale (POS) Systems with Examples

What do POS systems include?

POS systems include a combination of a computer, software and hardware. The combination will vary based on your industry, your needs and particular business. For example, a retail store might have POS software designed specifically for its unique products that accept contactless payments, credit cards and digital currency.

Here are some things your specific system may include:


The computer is how you will run your POS software, so its important to choose a computer thats compatible with the software you want to use. To make this easier for you, some companies sell the computer and the POS software as a bundle. However, you do still have the option of purchasing computers separately.

POS software

Select the POS software best-suited to your business needs. You can choose from cloud-based, on-premise or a hybrid system. The best software for your purposes will vary by industry, but how you intend to use the POS can also affect this.

For example, say you manage a busy retail store with four computers in your POS system. However, you would like to add tablets so you can help additional customers on busy days and reduce their wait times in line. In this scenario, a cloud-based POS software system would be best.

POS hardware

POS systems are more complex than the traditional cash register, but POS hardware comprises the physical devices that allow users to carry out the functions of the POS software. You can build and customize these systems to best meet your business needs. Potential hardware items for your POS systems include:

What are POS systems?

POS systems are machines that use hardware and software to

Although POS systems’ primary purpose is processing payments, they have more functions than traditional cash registers. These complex systems allow you to track inventory, manage employees and process sales reports. Using a POS system can streamline your business operations regardless of the size of your business.

Types of POS systems

Point of sale systems vary for each industry. Here are some different types of POS systems:

Retail POS systems

Retail POS systems process transactions in retail spaces, such as clothing stores, grocery stores and specialty goods stores. Besides the standard transaction processing, retail management software often includes features like inventory tracking, sales reports and a customer database. The features of the POS will vary for each type of store. For example, the POS at a grocery store may include a scale to weigh produce and a barcode scanner to ring up bulky items.

Restaurant POS systems

Restaurants of all types use restaurant management systems and POS systems to accept and process cash and credit payments. An added benefit of using these systems is the ability for staff to input orders into the system and directly send them to the kitchen. This can increase efficiency and help reduce mistakes or missed orders. Some other features of restaurant POS systems may include reporting, inventory and customer management.

Bar and nightclub POS systems

Busy bars and nightclubs need POS systems that can keep up with quick demand. These POS systems often feature speed functions to help with efficiency, such as reordering options and fast checkout. One of the most important features is the ability to pre-authorize payments, which allows bartenders to open, add to and close tabs for patrons.

An important consideration for bar and nightclub POS systems is the strength and speed of your internet system. Building a network with multiple POS systems that use tablets requires a strong and reliable internet connection. Test and ensure your connection can support the constant rapid transactions on your cloud-based POS system.

Salon and spa POS systems

One of the most important features of a POS system for spas, hair salons and nail salons is to manage appointments. Many POS systems allow users to make appointments with a calendar function and send appointment reminders to clients. These POS systems often also include retail functions and inventory management, and some may even include complex customer databases tracking previous appointments, styles and preferences.

Small business POS systems

You can make your small business operations more efficient with a small business POS system. Current technology allows you to build a POS with only a tablet, card reader attachment and cloud-based software. Using a POS rather than a standard cash register can save you time on tasks like reporting and performing the actual transaction itself.

Benefits of point of sale systems

Here are some benefits of using a point of sale system:

Track important data

A point of sale system can easily become the most important part of your business. Modern POS software can track many critical types of data. The specifics may vary for each type of software, but software may capture data like:

Plan future trends better

By capturing important inventory data and sales trends, the POS system can help you better plan for the future. Convenient inventory tracking ensures you avoid over-ordering certain items, and information about sales trends can affect all aspects of your business. For example, if you notice certain times of day bring in more sales, you may need to hire or schedule more staff for those times.

Automate the transaction process

Using the barcode scanner simplifies your transaction process. You can scan an item and let the software pull up its information rather than manually searching for or entering the information. This creates a seamless transaction experience for both you and your customer.

Streamline your business operations

A POS system enables you to reduce the number of devices and software systems you use. You can transition to using one overarching system for your most important business functions. The convenience allows you to spend more time running your business rather than completing paperwork.

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