As a retailer, you may believe that all the equipment in the market are more or less the same. After all, if your goal is to accept credit cards at your store’s checkout counter – then having any POS hardware (whatever the brand or type) would suffice, right?
Sure, accepting credit cards is a fundamental necessity for modern POS systems. But today’s retail customers have more ways to pay than ever, and a fully featured POS needs to support your customer’s expectations while making your inventory and accounting processes as simple as possible.
Modern POS systems include both hardware and software functionality that lets you streamline transactions, reduce oversight, and mitigate the damage of employee errors.
Most modern point of sale systems (particularly cloud-based ones) should have all the key functionality you expect of a state of the art POS. But to get the most out of your software, you need to choose high-performance hardware that fits your business.
And the first step to doing that is understanding the difference between different types of hardware and what each device does during a typical checkout transaction.
What kinds of POS hardware do retailers use?
Every modern POS system includes at least five essential hardware devices. All of these elements contribute to the checkout transaction in a unique way.
1. Barcode Scanner
From the customer’s point of view, the transaction begins when an employee introduces product barcodes to the system using a barcode scanner. Without this device, the employee has to manually enter a Universal Product Code (UPC) for each item, which is time-consuming and prone to errors. You have probably seen this happen at the supermarket when a product has a damaged barcode.
Scanners come in a variety of shapes and sizes. Supermarket checkout lanes tend to use large in-counter barcode scanners, while retail stores often prefer small handheld scanners. The functionality is the same, either way.
2. Register Screen
Once an employee scans a product code, the corresponding product shows up on the register screen. This screen is part of a computer that interprets the code, adds the values of scanned items, and processes the transaction. Some small businesses use standard PCs for this purpose, while others prefer purpose-built all-in-one devices.
Since the register is essentially a computer, you have multiple options available. Desktop computers, purpose-built systems, or even mobile devices and tablets can all perform this job. Complex systems can integrate with a website backend so that multiple sales points can draw from the same inventory – such as a brick-and-mortar retail store with its own e-commerce website. This prevents online customers from purchasing items that are out of stock after in-person customers buy them.
3. Payment Terminal
Credit card payments make up 36 percent of department store purchases. One of the main benefits to using POS hardware is being able to accept payments by card. Payment terminals come in a variety of shapes and sizes, from simple magstripe readers (MSRs) to touchscreen payment terminals with number pads that let users input their PIN number to verify transactions.
The PCI Security Standards Council oversees security compliance for payment terminals on behalf of the five biggest global payment brands – American Express, Discover, JCB, MasterCard, and Visa. Reputable POS hardware vendors must certify that they meet PCI SSD security standards.
4. Cash Drawer
The simplest piece of hardware in the POS ecosystem is the cash drawer – it is exactly what it sounds like. Secure cash drawers only open in response to a valid transaction signal from the register. If you have ever seen a checkout employee open and close a cash drawer when processing a credit card transaction, this is the reason why.
5. Receipt Printer
After a checkout employee scans a product barcode, confirms the payment amount on the register, and receives payment from the customer, that employee must generate a receipt. Receipt printers automatically generate receipts using the data gathered in the previous steps of the transaction.
A broken or malfunctioning receipt printer can stop a business in its tracks. For this reason, you should prioritize durable, high quality receipt printers that don’t rely on ribbon cartridge technology. The best receipt printers use thermal technology to print without consuming resources, so the only consumable you need on-hand at all times is paper.
Additional hardware and functionality
Depending on the specific needs of your store, you may need additional peripherals such as signature capture pads. This is common in pharmacies, doctor’s offices, and fitness centers, where certain purchases require the customer to sign a document. In these cases, the register produces a document template electronically and the signature pad inputs the customer’s signature directly on the document.
In the retail environment, you may need hardware that is compatible with specific business objectives. For instance, high-performance retail registers can automatically report sales data at the individual product level. This gives management a precise overview of sales data, and lets the business cater to customer needs more flexibly.
Some retail stores prefer to consolidate some of their hardware needs into mobile devices and tablet computers. With the right hardware add-ons, an Apple iPad can connect with a Bluetooth barcode scanner, interface with a cloud-based register computer through Wi-Fi, and even print receipts wirelessly. This can be a huge improvement over purchasing multiple individual systems and going through the process of cabling them all together.
How much should POS hardware or equipment cost?
Budgeting for POS hardware usually gives small business owners a pause – especially once they see the per-workstation prices that vendors commonly charge.
Determining how much you should pay for your store’s POS system depends on a number of factors, particularly when it comes to hardware.
- A basic PC-based POS system can cost around $1000 per workstation. Most of this price is the actual computer itself. Many retailers only choose this system because they already own one or two computers and decide they can save money by only purchasing the necessary peripherals and software.
- A professional-quality all-in-one POS machine can cost up to $3000 per workstation. These devices consolidate many of the individual elements described above into a single device, which can save on space and increase the value of the investment.
- A tablet-based POS system is usually less expensive than a PC-based system, especially if you do not purchase the latest tablet computer for the purpose. This can be a very attractive option for retailers looking to minimize startup costs. Register software and additional peripherals can function alongside multiple tablet computers, giving employees a single consolidated POS system with multiple workstations at a bargain.
If you choose to use a PC-based or tablet-based system, you will also need to invest in POS software that provides optimal functionality for your particular business. Although most commercial POS software licenses cost a small fortune to purchase outright, you can sign up to use POS software-as-a-service for as low as $69 per month, which also helps reduce upfront expenses.
How to choose the best POS hardware setup for your business
If you’re shopping around for the right POS hardware, here are some tips to help you select the best setup for your business.
Figure out your needs and store processes
Your retail space will usually dictate which hardware setup is best for your business. Consider the following:
Do your checkout employees stay in one place or move throughout the store, interacting with customers?
Mobile employees will generally perform better with wireless, handheld hardware, while cashiers who stay in one place (e.g. behind the cash wrap) will perform well enough with a larger set up — for example, using a laptop or PC.
How many backend processes can you automate?
If you can tie your POS hardware into an inventory system, you may be able to save expensive man-hours on accounting later on. For instance, if your hardware is compatible with yoru stock control software, you can easily use your equipment to stay on top of things like stock ordering, inventory counts, reporting, and more.
How large is your retail store?
Store space is valuable in retail, so be sure to maximize the area that you have. If you’re selling in tight quarters, you may want to consider a more compact POS hardware setup — i.e. using an iPad instead of a PC or large terminal.
Conduct online and offline research
There’s a wealth of information both online and offline that can help you find the right POS hardware. Consider doing the following:
- Speak to other retailers. If you know merchants in your neighborhood, ask them about their POS equipment and how they like it.
- Turn to online communities. Check out relevant subreddits (such as this one) as well as retail-related LinkedIn Groups and start a discussion about POS hardware. Ask retailers for recommendations on which vendors to check out as well as what which ones to stay away from.
- Check out YouTube video reviews and demos. If you already have a POS hardware vendor in mind, consider conducting a YouTube search for video demos and reviews. You can, for instance, type in “[brand] cash drawer,” and see what comes up.
Work with your POS software provider
Most small business owners look to their POS software vendor to provide guidance on compatible hardware setups. Most software vendors also sell hardware bundles scaled to meet common business needs. However, shrewd business owners often elect to purchase their own hardware, thinking that they’re cutting out the middleman and saving money in the process.
In some cases, this is true. If you know you only need a specific Bluetooth barcode scanner, you may be able to find it available at a discount by searching around. However, more often than not, you will find that your POS vendor is not getting rich off of upselling equipment to you – in fact, it has a better incentive to sell equipment to you at cost so that you can use their software long-term.
The potential benefits of scrounging online marketplaces for POS hardware quickly dissipate as you add items to your order. Finding one barcode scanner cheap is easy – but finding ten of them and ensuring they are all in perfect working condition may not be. Considering the cost of downtime, it’s best to get the most reliable products you can and to know that customer service is there for you when you need it.
If you need more info on how to effectively compare different point of sale solutions, download Vend’s POS Buyer’s Guide. In this resource, you will learn the 7 secrets to find a reliable POS system, and avoid the costly mistakes most retailers make when choosing a new retail platform.
In it you’ll learn:
- How to budget for your POS system
- How find and vet providers
- How to get the most out of the solution
Having the best POS hardware can do wonders for your retail business. The right equipment can help you run more efficiently, save space, and improve the customer experience. That’s why it’s important that you spend ample time finding and choosing the hardware setup that fits your needs.
About Francesca Nicasio
Francesca Nicasio is Vend's Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She's also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.