The point of sale (POS) or point of purchase (POP) is the time and place where a retail transaction is completed. It is the point at which a customer makes a payment to the merchant in exchange for goods or after provision of a service. At the point of sale, the merchant would prepare an invoice for the customer (which may be a cash register printout) or otherwise calculate the amount owed by the customer and provide options for the customer to make payment. After receiving payment, the merchant will also normally issue a receipt for the transaction. Usually the receipt is printed, but it is increasingly being dispensed electronically.
The POS in various retail situations would use customized hardware and software tailored to their particular requirements. Retailers may utilize weighing scales, scanners, electronic and manual cash registers, EFTPOS terminals, touch screens and a variety of other hardware and software available. For example, a grocery or candy store may use a scale at the point of sale, while a bar and restaurant may use software to customize the item or service sold when a customer has a meal or drink request.
The point of sale is often referred to as the point of service because it is not just a point of sale but also a point of return or customer order. Additionally, today POS software may include additional features to cater for different functionality, such as inventory management, CRM, financials, warehousing, etc.
Retailers and marketers will often refer to the area around the checkout instead as the point of purchase (POP) when they are discussing it from the retailer’s perspective. This is particularly the case when planning and designing the area as well as when considering a marketing strategy and offers.
Some point of sale vendors refer to their POS system as “Retail Management System” which is actually a more appropriate term given that this software is no longer just about processing sales but comes with many other capabilities such as inventory management, membership system, supplier record, bookkeeping, issuing of purchase orders, quotations and stock transfers, barcode label creation, sale reporting and in some cases remote outlets networking or linkage, to name some major ones.
Nevertheless, it is the term POS system rather than Retail Management System that is in vogue among both end-users and vendors.
Businesses are increasingly adopting POS systems and one of the most obvious and compelling reasons is that a POS system does away with the need for price tags. Selling prices are linked to the product code of an item when adding stock, so the cashier merely needs to scan this code to process a sale. If there is a price change, this can also be easily done through the inventory window. Other advantages include ability to implement various types of discounts, a loyalty scheme for customers and more efficient stock control.