Point of sale (also sometimes referred to as
Point of purchase (
POP) ) or
checkout is the location where a
transactionA financial transaction is an event or condition under the contract between a buyer and a seller to exchange an asset for payment. It involves a change in the status of the finances of two or more businesses or individuals.-History:...
occurs. A "checkout" refers to a POS terminal or more generally to the
hardwareHardware is a general term for equipment such as keys, locks, hinges, latches, handles, wire, chains, plumbing supplies, tools, utensils, cutlery and machine parts. Household hardware is typically sold in hardware stores....
and
softwareComputer software, or just software, is a collection of computer programs and related data that provide the instructions for telling a computer what to do and how to do it....
used for checkouts, the equivalent of an electronic
cash registerA cash register or till is a mechanical or electronic device for calculating and recording sales transactions, and an attached cash drawer for storing cash...
.
A POS terminal manages the selling process by a salesperson accessible interface. The same system allows the creation and printing of the
receiptA receipt is a written acknowledgment that a specified article or sum of money has been received as an exchange for goods or services. The receipt is evidence of purchase of the property or service obtained in the exchange.-Printed:...
.
Software prior to the 1990s
Early electronic cash registers (ECR) were controlled with proprietary software and were very limited in function and communications capability. In August 1973 IBM announced the IBM 3650 and 3660 Store Systems that were, in essence, a mainframe computer used as a store controller that could control 128 IBM 3653/3663 point of sale registers. This system was the first commercial use of client-server technology,
peer-to-peerPeer-to-peer computing or networking is a distributed application architecture that partitions tasks or workloads among peers. Peers are equally privileged, equipotent participants in the application...
communications,
local area networkA local area network is a computer network that interconnects computers in a limited area such as a home, school, computer laboratory, or office building...
(LAN) simultaneous backup, and remote initialization. By mid-1974, it was installed in
PathmarkPathmark is a supermarket chain headquartered in Montvale, New Jersey. It was founded in 1968 when its then parent, Supermarkets General Corporation, pulled out of the ShopRite retailers' cooperative...
Stores in New Jersey and
Dillard'sDillard's, Inc. is a department store chain in the United States, with 330 stores in 29 states. Headquartered in Little Rock, Arkansas, Dillard's locations are concentrated in Texas and Florida; with a major presence in other states including Arizona, Iowa, Colorado, Wyoming, Kansas, Missouri,...
Department Stores.
One of the first microprocessor-controlled cash register systems was built by William Brobeck and Associates in 1974, for
McDonald's RestaurantsMcDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 64 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by the eponymous Richard and Maurice McDonald; in 1948...
. It used the
Intel 8008The Intel 8008 was an early byte-oriented microprocessor designed and manufactured by Intel and introduced in April 1972. It was an 8-bit CPU with an external 14-bit address bus that could address 16KB of memory...
, a very early microprocessor. Each station in the restaurant had its own device which displayed the entire order for a customer--for example: [2] Vanilla Shake, [1] Large Fries, [3] BigMac--using numeric keys and a button for every menu item. By pressing the [Grill] button, a second or third order could be worked on while the first transaction was in progress. When the customer was ready to pay, the [Total] button would calculate the bill, including sales tax for almost any jurisdiction in the United States. This made it accurate for McDonald's and very convenient for the servers and provided the restaurant owner with a check on the amount that should be in the cash drawers. Up to eight devices were connected to one of two interconnected computers so that printed reports, prices, and taxes could be handled from any desired device by putting it into
Manager Mode. In addition to the error-correcting memory, accuracy was enhanced by having three copies of all important data with many numbers stored only as multiples of 3. Should one computer fail, the other could handle the entire store.
Programmability allowed retailers to be more creative. In 1979
Gene MosherGene Mosher is best known for inventing the graphic touchscreen point of sale computer and is a pioneer of human-computer interaction, including touchscreen interfaces, application-specific GUIs, direct manipulation GUIs, widget toolkits, widget engines and network computing.Mosher is a 1966...
's Old Canal Cafe in Syracuse, New York was using POS software written by Mosher that ran on an
Apple IIThe Apple II is an 8-bit home computer, one of the first highly successful mass-produced microcomputer products, designed primarily by Steve Wozniak, manufactured by Apple Computer and introduced in 1977...
to take customer orders at the restaurant's front entrance and print complete preparation details in the restaurant's kitchen. In that novel context, customers would often proceed to their tables to find their food waiting for them already. This software included real time labor and food cost reports. In 1986 Mosher used the Atari ST and bundled
NeoChromeNeoChrome was an early bitmap graphics editor for the Atari ST computer family. It was written by Dave Staugas, a system programmer at Atari and co-author of the ST's operating system....
paint to create and market the first graphical touchscreen POS software.
Modern software (post 1990s)
In 1992 Martin Goodwin and Bob Henry created the first point of sale software that could run on the
Microsoft WindowsMicrosoft Windows is a series of operating systems produced by Microsoft.Microsoft introduced an operating environment named Windows on November 20, 1985 as an add-on to MS-DOS in response to the growing interest in graphical user interfaces . Microsoft Windows came to dominate the world's personal...
platform named IT Retail. Since then a wide range of POS applications have been developed on platforms such as Windows and Unix. The availability of local processing power, local data storage, networking, and graphical user interface made it possible to develop flexible and highly functional POS systems. Cost of such systems has also declined, as all the components can now be purchased off-the-shelf.
The key requirements that must be met by modern POS systems include: high and consistent operating speed, reliability, ease of use, remote supportability, low cost, and rich functionality. Retailers can reasonably expect to acquire such systems (including hardware) for about $4000 US (2009) per checkout lane.
Hardware interface standardization (post 1990s)
Vendors and retailers are working to standardize development of computerized POS systems and simplify interconnecting POS devices. Two such initiatives are
OPOSOPOS or OLE for Retail POS consists of an architecture for Win32-based POS device access. OPOS is currently deployed on Microsoft Windows 95, Windows 98, Windows ME, Windows NT, Windows 2000, Windows XP, Windows Vista, and Windows CE. It also consists of a set of POS device interfaces sufficient...
and
JavaPOSJavaPOS , is a standard for interfacing point of sale software, written in Java, with the specialized hardware peripherals typically used to create a point of sales system. The advantages are reduced POS terminal costs, platform independence, and reduced administrative costs...
, both of which conform to the
UnifiedPOSUnifiedPOS or UPOS is a world wide vendor and retailer driven Open Standard's initiative under the National Retail Federation, Association of Retail Technology Standards to provide vendor...
standard led by The National Retail Foundation.
OPOS (
OLEObject Linking and Embedding is a technology developed by Microsoft that allows embedding and linking to documents and other objects. For developers, it brought OLE Control eXtension , a way to develop and use custom user interface elements...
for POS) was the first commonly-adopted standard and was created by
MicrosoftMicrosoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
,
NCR CorporationNCR Corporation is an American technology company specializing in kiosk products for the retail, financial, travel, healthcare, food service, entertainment, gaming and public sector industries. Its main products are self-service kiosks, point-of-sale terminals, automated teller machines, check...
, Epson and
Fujitsu-ICLis a Japanese multinational information technology equipment and services company headquartered in Tokyo, Japan. It is the world's third-largest IT services provider measured by revenues....
. OPOS is a
COMComponent Object Model is a binary-interface standard for software componentry introduced by Microsoft in 1993. It is used to enable interprocess communication and dynamic object creation in a large range of programming languages...
-based interface compatible with all COM-enabled
programming languageA programming language is an artificial language designed to communicate instructions to a machine, particularly a computer. Programming languages can be used to create programs that control the behavior of a machine and/or to express algorithms precisely....
s for
Microsoft WindowsMicrosoft Windows is a series of operating systems produced by Microsoft.Microsoft introduced an operating environment named Windows on November 20, 1985 as an add-on to MS-DOS in response to the growing interest in graphical user interfaces . Microsoft Windows came to dominate the world's personal...
. OPOS was first released in 1996.
JavaPOS was developed by
Sun MicrosystemsSun Microsystems, Inc. was a company that sold :computers, computer components, :computer software, and :information technology services. Sun was founded on February 24, 1982...
,
IBMInternational Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
, and
NCR CorporationNCR Corporation is an American technology company specializing in kiosk products for the retail, financial, travel, healthcare, food service, entertainment, gaming and public sector industries. Its main products are self-service kiosks, point-of-sale terminals, automated teller machines, check...
in 1997 and first released in 1999. JavaPOS is for
JavaJava is a programming language originally developed by James Gosling at Sun Microsystems and released in 1995 as a core component of Sun Microsystems' Java platform. The language derives much of its syntax from C and C++ but has a simpler object model and fewer low-level facilities...
what OPOS is for Windows, and thus largely platform independent.
There are several communication protocols POS systems use to control peripherals. Among them are
- EPSON Esc/POS
- UTC Standard
- UTC Enhanced
- AEDEX
- ICD 2002
- Ultimate
- CD 5220
- DSP-800
- ADM 787/788
- HP.
There are also nearly as many proprietary protocols as there are companies making POS peripherals. EMAX, used by EMAX International, was a combination of AEDEX and IBM dumb terminal.
Most POS peripherals, such as displays and printers, support several of these command protocols in order to work with many different brands of POS terminals and computers.
Retail industry
The
retailingRetail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
industry is one of the predominant users of POS terminals.
A Retail Point of Sales system typically includes a computer, monitor, cash drawer, receipt printer, customer display and a barcode scanner, and the majority of retail POS systems also include a debit/credit card reader. It can also include a weight scale, integrated credit card processing system, a signature capture device and a customer pin pad device. More and more POS monitors use touch-screen technology for ease of use and a computer is built in to the monitor chassis for what is referred to as an all-in-one unit. All-in-one POS units save valuable counter space for the retailer. The POS system software can typically handle a myriad of customer based functions such as sales, returns, exchanges, layaways, gift cards, gift registries, customer loyalty programs, BOGO (buy one get one), quantity discounts and much more. POS software can also allow for functions such as pre-planned promotional sales, manufacturer coupon validation, foreign currency handling and multiple payment types.
The POS unit handles the sales to the consumer but it is only one part of the entire POS system used in a retail business. “Back-office” computers typically handle other functions of the POS system such as inventory control, purchasing, receiving and transferring of products to and from other locations. Other typical functions of a POS system are to store sales information for reporting purposes, sales trends and cost/price/profit analysis. Customer information may be stored for receivables management, marketing purposes and specific buying analysis. Many retail POS systems include an accounting interface that “feeds” sales and cost of goods information to independent accounting applications.
Hospitality industry
Hospitality point of sales systems are computerized systems incorporating registers, computers and peripheral equipment, usually on a computer network. Like other point of sale systems, these systems keep track of sales, labor and payroll, and can generate records used in accounting and book keeping. They may be accessed remotely by restaurant corporate offices, troubleshooters and other authorized parties.
Point of sales systems have revolutionized the restaurant industry, particularly in the fast food sector. In the most recent technologies, registers are computers, sometimes with touch screens. The registers connect to a server, often referred to as a "store controller" or a "central control unit." Printers and monitors are also found on the network. Additionally, remote servers can connect to store networks and monitor sales and other store data.
Newer, more sophisticated, systems are getting away from the central database "file server" type system and going to what is called a "cluster database". This eliminates any crashing or system downtime that can be associated with the back office file server. This technology allows 100% of the information to not only be stored, but also pulled from the local terminal. Thus eliminating the need to rely on a separate server for the system to operate.
The efficiency of such systems has decreased service times and increased efficiency of orders.
Another innovation in technology for the restaurant industry is Wireless POS. Many restaurants with high volume use wireless handheld POS to collect orders which are sent to a server. The server sends required information to the kitchen in real time.
Hair and beauty industry
Point of sale systems in the hair and beauty industry have become very popular with increased use of computers. In order to run a salon efficiently it is essential to keep all appointments, client, employee roster and the checkout in a system where you can create performance reports for. The nature of salons and spas vary depending on the setup of the business and products offered in addition to the business. This is why POS comes along with most salon software.
Restaurant business
Restaurant POS refers to point of sale (POS) software that runs on computers, usually touch screen terminals or wireless handheld devices. Restaurant POS systems assist businesses to track transactions in real time.
Typical restaurant POS software is able to print guest checks, print orders to kitchens and bars for preparation, process
credit cardA credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services...
s and other payment cards, and run reports. In addition, some systems implement wireless pagers and electronic signature capture devices.
In the
fast foodA fast food restaurant, also known as a Quick Service Restaurant or QSR within the industry itself, is a specific type of restaurant characterized both by its fast food cuisine and by minimal table service...
industry, registers may be at the front counter, or configured for drive through or walk through cashiering and order taking. Front counter registers take and serve orders at the same terminal, while drive through registers allow orders to be taken at one or more drive through windows, to be cashiered and served at another. In addition to registers, drive through and kitchen monitors may be used by store personnel to view orders. Once orders appear they may be deleted or recalled by "bump bars", small boxes which have different buttons for different uses. Drive through systems are often enhanced by the use of drive through wireless (or headset) systems which enable communications with drive through speakers.
POS systems are often designed for a variety of clients, and can be programmed by the end users to suit their needs. Some large clients write their own specifications for vendors to implement. In some cases, POS systems are sold and supported by third party distributors, while in other cases they are sold and supported directly by the vendor.
Wireless systems consist of drive though microphones and speakers (often one speaker will serve both purposes), which are wired to a "base station" or "center module." This will, in turn broadcast to headsets. Headsets may be an all-in-one headset or one connected to a belt pack.
Hotel business
POS software allows for transfer of meal charges from dining room to guest room with a button or two. It may also need to be integrated with property management software.
Hardware Stores, Building Supply, Lumber Yards
POS software for this industry is very specialized compared to other industries. POS software must be able to handle special orders, Purchase Orders, Repair orders, Service and Rental Programs as well as typical Point of Sale Functions.
Special equipment is usually needed because of the environment that the Point of Sale System is exposed to. Wireless Devices, Battery Powered Devices, all in one units, and internet ready machines are typical in this industry.
Checkout system
A checkout system generally involves the following components:
- General computer hardware
- General computer software
- Checkout hardware
- Checkout software
- Miscellaneous store hardware
Because of the expense involved with a POS system, the
eBayeBay Inc. is an American internet consumer-to-consumer corporation that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide...
guide recommends that if annual revenue exceeds the threshold of $700,000, investment in a POS system will be advantageous.
POS systems are manufactured and serviced by such firms as
Fujitsuis a Japanese multinational information technology equipment and services company headquartered in Tokyo, Japan. It is the world's third-largest IT services provider measured by revenues....
,
IBMInternational Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
,
MICROS SystemsMICROS Systems, Inc., is headquartered in Columbia, Maryland, USA. The company manufactures and sells computer hardware, software, and services for the restaurant point of sale, hotel, hospitality, specialty retail markets and other similar markets...
, Panasonic,
Radiant SystemsRadiant Systems is a provider of technology to the hospitality and retail industries that is based in Atlanta, Georgia. Radiant has been publicly traded since 1997, and exceeded $300 million in revenue in 2008. Radiant employs over 1,300 worldwide...
, and
Squirrel SystemsSquirrel Systems is a Vancouver-based point of sale vendor specializing in turnkey hospitality management systems. Squirrel's corporate headquarters, research and development laboratories, and 24/7 help desk are based in Vancouver, Canada.-History:...
(see the point of sale companies category for complete list).
Point of sales systems in restaurant environments operate on DOS, Windows or Unix environments. They can use a variety of physical layer protocols, though Ethernet is currently the preferred system.
Checkout hardware generally includes a
credit cardA credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services...
reader, a
receiptA receipt is a written acknowledgment that a specified article or sum of money has been received as an exchange for goods or services. The receipt is evidence of purchase of the property or service obtained in the exchange.-Printed:...
printer, a
cash drawerA cash drawer is generally a compartment underneath a cash register in which the cash from transactions is kept. The drawer typically contains a removable till. The till is usually divided into compartments used to store each denomination of bank notes and coins separately to make counting easier...
, a
barcodeA barcode is an optical machine-readable representation of data, which shows data about the object to which it attaches. Originally barcodes represented data by varying the widths and spacings of parallel lines, and may be referred to as linear or 1 dimensional . Later they evolved into rectangles,...
scanner, and a
PINA personal identification number is a secret numeric password shared between a user and a system that can be used to authenticate the user to the system. Typically, the user is required to provide a non-confidential user identifier or token and a confidential PIN to gain access to the system...
pad with integrated card swipe.
Tax fraud
POS systems record sales for business and tax purposes. Illegal software dubbed "
zappersAn automated sales suppression device or zapper is a software program that falsifies the electronic records of point of sale systems for the purpose of tax evasion....
" is increasingly used on them to falsify these records with a view to evading the payment of taxes.
See also
- EFTPOS
EFTPOS is the general term used for debit card based systems used for processing transactions through terminals at points of sale. In Australia and New Zealand it is also the brand name of the specific system used for such payments...
- ISO 8583
ISO 8583 Financial transaction card originated messages — Interchange message specifications is the International Organization for Standardization standard for systems that exchange electronic transactions made by cardholders using payment cards...
- JavaPOS
JavaPOS , is a standard for interfacing point of sale software, written in Java, with the specialized hardware peripherals typically used to create a point of sales system. The advantages are reduced POS terminal costs, platform independence, and reduced administrative costs...
Point of sale companies category
- Point of sale display
A point-of-sale display is a specialized form of sales promotion that is found near, on, or next to a checkout counter . They are intended to draw the customers' attention to products, which may be new products, or on special offer, and are also used to promote special events, e.g. seasonal or...
- Self checkout
Self checkout machines provide a mechanism for customers to pay for purchases from a retailer without direct input to the process by the retailer's staff. They are an alternative to the traditional cashier-staffed checkout...
- Standard Interchange Language
The Standard Interchange Language is a data interchange language standard developed by the Food Distribution Retails Systems Group for the interchange of information between software programs...
- UnifiedPOS
UnifiedPOS or UPOS is a world wide vendor and retailer driven Open Standard's initiative under the National Retail Federation, Association of Retail Technology Standards to provide vendor...