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What Is a POS System? A Guide for Retail Businesses

When you checkout at any coffee shop or retail store you’re using a point of sale (POS) system. A POS system is what facilitates and executes the purchase. 

Technically, handing someone cash on the street for a drink constitutes a point of sale as well. But for the purpose of this article, a POS system refers to the hardware and software that is used by companies to scan in and process sales. The number of tools and applications that are used within the system can vary greatly depending on the type of business and product being sold. 

Modern POS systems speed up the process of selling goods. They include scanners to capture item tags, and integrated apps that help organize inventory, track purchase data, and power loyalty programs. Your POS system should make your checkout process easier, faster, and more efficient for your customers and for your business.

POS Equipment: What Are The Hardware Components of a Complete System?

There are various pieces of point of sale hardware that the vast majority of businesses will need. There are a variety of options for each so it’s important to shop around to find what’s right for your business.

Credit Card Machine

This device reads the credit card through a swipe, dip, or scan and sends it to the computer system’s credit card processor. EMV chip technology has reduced fraud and made shopping with cards much more secure. Increasingly, these credit card readers are equipped with contactless (NFC) payments. They vary greatly in price, features, and functionality.

Cash Drawer

The original form of POS, the cash register! Some customers will still want to use cash to make their purchases, so it’s a good idea to keep a drawer with change. 

Receipt Printer

Modern POS software will allow you to email or text a receipt to your customers. However, some people will prefer a print version of the receipt for various reasons. As such, it is necessary to have a receipt printer to offer a physical copy. 

Barcode Scanner

Laser or image-capture, barcode readers can really help speed up the process of both checking out customers and conducting inventory management. This is especially true if you have a large amount of inventory and/or periods of rapid or high volume checkout. There are a wide range of different types of scanners from large in-counter ones you see at the end of the conveyor belt at the supermarket to mobile rugged types that would be used on the sales floor at a Home Depot. 

Touch Screen Monitor or Padlet

The monitor displays the functions of the POS system that are used by employees. It shows the process of the transaction, access to inventory numbers, can allow employees to clock in and out, and much more.

POS Software: Cloud-Based vs Legacy

POS systems are generally split into two categories: legacy systems and cloud-based systems. The latter has become much more popular and promises to offer more as software technology continues to advance.

Legacy POS Systems

Legacy pos systems store all of their information and processing in local servers. They use their own in-house hardware to operate and generally require an IT person to come on-site and install and/or update the servers.

These older fashioned “traditional” systems typically cost more money to buy and start using. They also require the user to keep up with software updates, safety patches, and performance maintenance.

In addition, if your system crashes or overloads in the middle of a busy business day, you will have the added aggravation of missing out on a lot of sales and dealing with unhappy customers. Internet-based technology has made this type of model all but obsolete.

Retail Cloud POS System

The future of POS systems is with the cloud. Instead of having to store bulky in-house systems, modern cloud-based systems operate on a software as a service (SaaS) model. This option is much cheaper both when it comes to start-up costs as well as monthly service fees. 


Cloud-based point of sale systems offer increased scalability. You can seamlessly link your POS from multiple locations into the same system, allowing your business to grow to new locations with ease.

Real-Time Remote Monitoring

In addition, you can monitor all of your transactions, employee management, sales data, and more in real-time from your phone or computer. Since it’s on the cloud, it’s accessible remotely from anywhere you can sign in to your account.

Automatic Updates

A good cloud-based POS solution comes with automatic updates to its software and accessible customer service. You should always be able to reach out to them to deal with any issue you might have. 

Seamlessly Integrated Point of Sale System

Cloud-based systems are constantly updating to the newest, most efficient technology. This also means enabling integration with software applications that make running your business much easier. Robust and smart POS software will allow you to integrate with the applications you want.

Point of Sale Tips: Integrate With the Applications You Need

A great point of sale system comes with a whole lot of features. But no solution has everything. That’s why the best POS systems integrate with third-party software to create a complete solution.

Inventory Management

A smart POS system will adjust inventory counts in real-time across all channels and locations, whether through brick-and-mortar or eCommerce channels. Tracking KPI and ABC analysis will help your company manage inventory with streamlined ease and strategic precision. COMBASE provides native inventory management for its users.

CRM and Loyalty

Integration to software such as bLoyal harnesses the power of your transaction information to optimize customer relationship management. Automatically view customers’ sales history, preferences, and discounts, and use that information to cross-sell, customize, and tailor to their specific needs and preferences.

POS Data: Transaction Tracking and Reporting

Track your sales performance using product reports, conversion rates, and built-in performance that provides key insights and data analysis. Easily assess your business operations amongst different store locations, seasons, and employees. By providing key real-time analysis, COMBASE can help you improve efficiency and conversion rates for the future.  

Employee Management

The POS can serve as a clock-in module for your employees. Tapered permission levels for different levels of access keep your cash and sales safe. Also, you can monitor employee performance by tracking sign-in profiles for individual employees. And integrations to scheduling solutions, like TimeForge, make managing your team even easier.


COMBASE also features a robust WooCommerce integration for online retailers. With vast customization, SEO optimization, automated inventory syncs, and easy promotions, it’s never been easier to sell online.


A point of sale must also integrate with accounting platforms to make payroll and taxes more seamless. Look for solutions that integrate with Quickbooks or other popular accounting platforms.

FAQs on What Is a POS System

What does a POS system do?

A point of sale system is the machine that facilitates and executes transactions. It used to be a simple cash register that organized and counted the bills and coins that were accumulated over the course of the business day. With modern systems, businesses can track inventory, analyze sales data, compile customer information, and manage employee profiles. 

How much does a POS system cost?

The cost of POS systems varies greatly depending on what your business needs are. Some subscriptions offer free hardware for simple, basic units, while other more powerful and robust systems cost upwards of $5,000 to $10,000. 

Similarly, subscription fees have many different tiers based on what services and software are included in your plan. Some POS companies will actually charge $0 for subscriptions but then charge much higher credit card processing fees. Other multi-unit hybrid systems can charge over $1000 dollars a month for more in-depth services.

What does a POS system include?

A modern POS system includes components of both hardware and software. For hardware, this includes the credit card reader, the barcode scanner, the monitor, the receipt printer, and the cash drawer.

As for software, it includes all credit card processing and integrated applications like your inventory system, CRM and loyalty programs, data and sales analysis, employee management, and more.

Do POS systems need the internet?

Most modern cloud-based POS systems will require the internet to operate with full functionality. Therefore, having a modem, wireless router, and decent broadband internet will ensure smooth operation.

However, in the case that the internet is lost, some cloud-based systems will queue payments to be run once the internet connection is restored. This can be a huge asset in the unfortunate case of an outage during a busy checkout period.