Point of sale

This article is about checkout technology. For managed care, see point of service plan.
Points of sale at a Target store

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.[1][2][3]

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.

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.

Terminology

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.

History

Software prior to the 1990s

McDonald's POS device by Brobeck

Early electronic cash registers (ECR) were controlled with proprietary software and were limited in function and communications capability. In August 1973 IBM released the IBM 3650 and 3660 store systems that were, in essence, a mainframe computer used as a store controller that could control up to 128 IBM 3653/3663 point of sale registers. This system was the first commercial use of client-server technology, peer-to-peer communications, local area network (LAN) simultaneous backup, and remote initialization. By mid-1974, it was installed in Pathmark stores in New Jersey and Dillard's department stores.

One of the first microprocessor-controlled cash register systems was built by William Brobeck and Associates in 1974, for McDonald's Restaurants.[4] It used the Intel 8008, 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.

In 1986, Gene Mosher[5] introduced the first graphical point of sale software[6] under the ViewTouch[7] trademark on the 16-bit Atari 520ST color computer.[8] It featured a color touchscreen widget-driven interface that allowed configuration of widgets representing menu items without low level programming.[9] The ViewTouch point of sale software was first demonstrated in public at Fall Comdex, 1986,[10] in Las Vegas Nevada to large crowds visiting the Atari Computer booth. This was the first commercially available POS system with a widget-driven color graphic touch screen interface and was installed in several restaurants in the USA and Canada.

Modern software (post-1990s)

In 1992, Martin Goodwin and Bob Henry created the first point of sale software that could run on the Microsoft Windows platform named IT Retail.[11] 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.

In fact as far as the computer is concerned, off-the-shelf versions are usually newer and hence more powerful than those proprietary POS terminals provided by POS vendors and more RAM can also be easily added if needed. Furthermore, touchscreen tablets and laptops - both Windows or Android types - are readily available in the market. And they are also more portable than traditional POS terminals. The only advantage of the latter has is usually because they are built to withstand rough handling, food and drink spillages; however this is not a concern for non F & B businesses.

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 (as of 2009) per checkout lane.

Reliability depends not completely on the developer but at times on the compatibility between a database and an OS version. For example, Ms Access database used very widely for POS systems is known to fail for Windows 7 and upward versions and no solution has been offered by Microsoft. However through community support a registry tweak solution has been found by a developer for this.

That such a serious compatibility bug has emerged for Ms Access database is shocking even to veteran developers using Windows, some of whom may not be able find the solution. Businesses using POS systems with Ms Access database were caught off guard when they upgrade from Windows XP to a newer version of the OS. As a result, their business were seriously disrupted but some suspecting it had something to do with OS upgrade took the initiative to quickly downgrade back to Windows XP.

POS systems are by far one of the most complex of software because of the features that are required by different end-users. Many if not most POS systems are really a suite of software that includes sale, inventory, add stock, vendor record, membership and reporting modules. Sometimes you will find also purchase ordering, stock transferring, quotation issuing, barcode creating, bookkeeping or even accounting capabilities included. Furthermore each of these modules are interlinked if they are to serve their practical purpose and to maximize their usability.

For instance, the sale window is immediately updated on a new member entry through the membership window because of this interlinking. Similarly when a sale transaction is made, any purchase by a member is on record for the membership window to report providing information like payment type, goods purchased, date of purchase, points accumulated. Another example is when goods are sold the report window is able to generate an account of the balance stock, of the performance of goods from various vendors, and sometimes for more comprehensive analysis need to present these in ascending or descending order for different fields - like selling price, balance, average cost, quantity sold, description and department. Highly complex programming is involved not to mention the kind of computer resources to be considered for generating such extensive analyses.

Apart from that, a POS system can be designed to serve different industries: retail, wholesale and hospitality. Within each trade different customers have different expectations. The reporting functionality alone is subject to so many demands especially from those in the retail/wholesale industry. Just to cite special requirements, for some businesses goods may include perishables and hence the inventory system must be capable of prompting the admin and cashier on expiring or expired products. Some retail businesses require the system to store credit for their customers, credit which can be used subsequently to pay for goods. Some companies even expect the POS system to behave like a full-fledged inventory management system, including the ability to provide even FIFO (First In First Out) and LIFO (Last In First Out) reports of their goods for accounting and tax purpose.

In the hospitality industry, POS system capabilities can also diverge significantly. For instance while a restaurant is typically concerned about how the sale window functions, whether it has functionality such as for creating item buttons, for various discounts, for holding of receipts, for queuing, for table service as well as for takeaways, these capabilities may yet be insufficient for a spa or slimming center which would require in addition a scheduling window with historical records of customers' attendance and their special requirements.

The complexity of a mature POS system even extends to remote networking or interlinking between remote outlets and the HQ such that updating both ways is possible. Some POS systems even offer the linking of web-based orders to their sale window. Even when local networking is only required such as in the case of a high-traffic business like a supermarket there is already the challenge for the developer to keep most if not every of their POS stations always running. And this puts high demand not just on software coding but also designing the whole system covering how individual stations and the network work together, and a special consideration for the performance capability and usage of databases.

With regards to databases, POS systems are very demanding on their performance because of numerous submissions and retrievals of data - required for sequencing the receipt number, checking up on various discounts, membership, calculating subtotal, so forth - just to process a single sale transaction. The immediacy required of the system on the sale window also cannot be compromised. This places much stress on even enterprise databases if there are already tens of thousands of sale records in the database. Ms SQL has been known to freeze up completely under such conditions showing a "Timeout Expired" error message. Even a lighter database like Ms Access will slow to a crawl over time if the problem of database bloating is not foreseen and managed by the system automatically. Therefore the need to do extensive testing, debugging and improvisation of solutions to preempt failure of a database before commercialization further complicates the development.

With the rise of POS system hacking which an Internet search will readily confirm, developers nowadays have to think also about the security aspect of the system, thus compounding the complexity of a POS system. In 2015 alone the POS systems of two major hotels, Mandarin Oriental and Hilton were compromised by hackers allowing them to steal credit card information of their guests.

It may be said that a POS system can be made to serve different things to different end-users depending on their unique business processes. In fact quite often an off-the-self POS system is inadequate for customers; some customization is required and this is why a POS system can become very complex.

Because of the complexity, therefore do not surprised as a user if there are many bugs and errors encountered in POS systems as a search on 'pos system reviews bugs' would reveal.

At the same time the fact that a POS system typically can cost thousands of dollars just for a software license alone just goes to show what work - extensive software coding, debugging and testing, integration with database, hardware and networking requirements - has been invested by the developer.

POS systems are also very demanding in terms of accuracy given that monetary transaction is constantly involved not only via the sale window but also at the backend through the receiving and inputting of goods into the inventory.

A POS system in some retail/wholesale businesses is often attempted to be used as inventory management system which is a highly complex software by itself not to mention that inventory management is a full-time job which many businesses are not really prepared to undertake.

Anyway when a user wants to find out how his products are performing the POS system must be able to provide a comprehensive report of not only the sales but also the balance quantity, profit margin, so forth.

Other requirements include that the system must have functionality for membership discount and points accumulation/usage, quantity and promotional discounts, mix and match offers, cash rounding up, invoice/delivery-order issuance with outstanding amount. It should enable a user to adjust the inventory of each product based on physical count, track expiry of perishable goods, change pricing, provide audit trail when modification of inventory records are performed, be capable of multiple outlet functionality, control of stocks from HQ, doubling as an invoicing system, just to name some.

It is clear that POS system is a term that implies a wide range of capabilities depending on the end-user requirements. POS system review websites cannot be expected to cover most let alone all the features; in fact unless one is a developer himself it is unrealistic to expect the reviewer to know all the nuts and bolts of a POS system. For instance a POS system might work smoothly on a test database during review but not when the database grows significantly in size over months of usage. And this is only one among many hidden critical functionality issues of a POS system.

Although POS systems based on the sale window interface alone all appear to be similar it is really under the hood that end-users come to know by and by whether the software functionality they required not only are available but working properly. The latter is cited because POS systems are notorious for many bugs and errors. For this reason for those looking to purchase a POS system, perhaps one of the best routes to a prudent purchase decision is to find out from other users in a similar trade about their experience with various POS systems. Given the complexity of the software even this fact-finding process takes much effort but it is far better than ending up with a system that you will live to regret for years.

Another way is to ask for a demo installation of the POS system from a vendor so that you can test out the functionality. However, because of the complexity of the software it is not likely that you may get to test out the features comprehensively enough.

Another alternative is to consider engaging an expert in POS systems to source for a suitable one. However experts in this field are not easy to find. Nevertheless, if found investing in such consultation is very critical especially when your business is large and highly dependent on acquiring the right system. This implies not just in terms of technical functionality of the system but also in terms of licensing issues such as whether your company can acquire the source code to ensure that future development of the software is not dependent on the survival of the original developer.

Hardware interface standardization (post-1980s)

Vendors and retailers are working to standardize development of computerized POS systems and simplify interconnecting POS devices. Two such initiatives are OPOS and JavaPOS, both of which conform to the UnifiedPOS standard led by The National Retail Foundation.

OPOS (OLE for POS) was the first commonly adopted standard and was created by Microsoft, NCR Corporation, Epson and Fujitsu-ICL. OPOS is a COM-based interface compatible with all COM-enabled programming languages for Microsoft Windows. OPOS was first released in 1996. JavaPOS was developed by Sun Microsystems, IBM, and NCR Corporation in 1997 and first released in 1999. JavaPOS is for Java what OPOS is for Windows, and thus largely platform independent.

There are several communication ways POS systems use to control peripherals such as:

There are also nearly as many proprietary protocols as there are companies making POS peripherals. 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.

Cloud-based POS (post-2000s)

Cloud-based point of sale.

The advent of cloud computing has given birth to the possibility of POS systems to be deployed as software as a service, which can be accessed directly from the Internet, using any internet browser. Using the previous advances in the communication protocols for POS's control of hardware, cloud-based POS systems are independent from platform and operating system limitations. Cloud-based POS systems are also created to be compatible with a wide range of POS hardware and sometimes tablets such as Apple's IPad. Thus cloud-based POS also helped expand POS systems to mobile devices, such as tablet computers or smartphones.[12] These devices can also act as barcode readers using a built-in camera and as payment terminals using built-in NFC technology or an external payment card reader. A number of POS companies built their software specifically to be cloud-based. For example, Epos Now's POS software has been cloud-based since it launched in 2011.[13] Other businesses who launched pre-2000s have since adapted their software to adapt to evolving technology. Cybertill which is based in the UK, claims to be the world's first multichannel cloud-based POS system.[14]

Cloud-based POS systems are different from traditional POS largely because user data, including sales and inventory, are not stored locally, but in a remote server. The POS system is also not run locally, so there is no installation required.[15]

The advantages of a cloud-based POS are instant centralization of data (important especially to chain stores), ability to access data from anywhere there is internet connection, and lower start-up costs.[15][16][17]

Cloud based POS requires an internet connection. For this reason it important to use a device which has its own 3G capability in case the device's primary internet goes down. First Data's Clover mini and mobile are examples of cloud based POS which have their own internet capability in the event that the primary internet fails.

In addition to being significantly less expensive than traditional legacy point of sale systems, the real strength of a cloud based point of sale system is that there are developers all over the world creating software applications for cloud based POS. Cloud based POS systems are often described as future proof as new applications are constantly being conceived and built.

POS vendors of such cloud based systems should also have a strong contingency plan for the breakdown of their remote server such as represented by failover server support. However, sometimes even a major data center can fail completely, such as in a fire.[18] On-premise installations are therefore sometimes seen alongside cloud-based implementation to preempt such incidents, especially for businesses with very high traffic. However the on-premise installations may not have the most up-to-date inventory and membership information.

For such contingency, a more innovative though highly complex approach for the developer is to have a trimmed down version of the POS system installed on the cashier computer at the outlet. On a daily basis the latest inventory and membership information from the remote server is automatically updated into the local database. Thus should the remote server fail, the cashier can switch over to the local sale window without disrupting sales. When the remote server is restored and the cashier switches over to the cloud system, the locally processed sale records are then automatically submitted to the remote system, thus maintaining the integrity of the remote database.

Retail industry

Main article: Retail

The retail industry is one of the predominant users of POS terminals.

A woman stands behind a shopping cart at the checkout stand.
A woman in Jordan is ready to pay for her groceries.

A retail point of sale system typically includes a cash register (which in recent times comprises 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 conveyor belt, weight scale, integrated credit card processing system, a signature capture device and a customer pin pad device. While the system may include a keyboard and mouse, more and more POS monitors use touch-screen technology for ease of use, and a computer is built into the monitor chassis for what is referred to as an all-in-one unit. All-in-one POS units liberate 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, promotions, 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: store sales information for enabling customer returns, 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.

A multiple point of sale system used by big retailers like supermarkets and department stores has a far more demanding database and software architecture than that of a single station seen in small retail outlets. A supermarket with high traffic cannot afford a systemic failure, hence each point of sale station should not only be very robust both in terms of software, database and hardware specifications but also designed in such a way as to prevent causing a systemic failure - such as may happen through the use of a single central database for operations.

At the same time updating between multiple stations and the backend administrative computer should be capable of being efficiently performed, so that on one hand either at the start of the day or at any time each station will have the latest inventory to process all items for sale, while on the other hand at the end of the day the backend administrative computer can be updated in terms of all sale records.

This gets even more complicated when there is a membership system requiring real-time two-way updating of membership points between sale stations and the backend administrative computer.

Retail operations such as hardware stores (lumber yards), electronic stores and so-called multifaceted superstores need specialized additional features compared to other stores. POS software in these cases handles special orders, purchase orders, repair orders, service and rental programs as well as typical point of sale functions. Rugged hardware is required for point of sale systems used in outdoor environments. Wireless devices, battery powered devices, all-in-one units, and Internet-ready machines are typical in this industry.

Recently new applications have been introduced, enabling POS transactions to be conducted using mobile phones and tablets. According to a recent study, mobile POS (mPOS) terminals are expected to replace the contemporary payment techniques because of various features including mobility, upfront low cost investment and better user experience. Convenience of conducting remote financial transactions is expected to augment the demand from small and medium businesses for mPOS.[12]

In the mid-2000s, the blind community in the United States engaged in structured negotiations to ensure that retail point of sale devices had tactile keypads. Without keys that can be felt, a blind person cannot independently enter her or his PIN. In the mid-2000s retailers began using 'flat screen' or 'signature capture' devices that eliminated tactile keypads. Blind people were forced to share their confidential PIN with store clerks in order to use their debit and other PIN-based cards. The blind community reached agreement with Walmart, Target, CVS and eight other retailers that required real keys so blind people could use the devices.

Hospitality industry

Main article: Hospitality industry
Reception desk POS
Restaurant POS
Tablet-based POS

Hospitality point of sale systems are computerized systems incorporating registers, computers and peripheral equipment, usually on a computer network to be used in restaurants, hair salons or hotels. Like other point of sale systems, these systems keep track of sales, labor and payroll, and can generate records used in accounting and bookkeeping. They may be accessed remotely by restaurant corporate offices, troubleshooters and other authorized parties.

Point of sale systems have revolutionized the restaurant industry, particularly in the fast food sector. In the most recent technologies, registers are computers, sometimes with touch screens like iPad POS.[19] 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.

Typical restaurant POS software is able to create and print guest checks, print orders to kitchens and bars for preparation, process credit cards and other payment cards, and run reports. In addition, some systems implement wireless pagers and electronic signature-capture devices.

In the fast food industry, displays may be at the front counter, or configured for drive-through or walk-through cashiering and order taking. Front counter registers allow taking and serving 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 displays are used to view orders. Once orders appear they may be deleted or recalled by the touch interface or by bump bars. Drive-through systems are often enhanced by the use of drive-through wireless (or headset) intercoms. 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. Wireless systems consist of drive-through microphones and speakers (often one speaker will serve both purposes), which are wired to a "base station" or "center module." This, in turn, will broadcast to headsets. Headsets may be an all-in-one headset or one connected to a belt pack.

In hotels, 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.

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.

Tablet POS systems popular for retail solutions are now available for the restaurant industry. Initially these systems were not sophisticated and many of the early systems did not support a remote printer in the kitchen. Tablet systems today are being used in all types of restaurants including table service operations. Most tablet systems upload all information to the Internet so managers and owners can view reports from anywhere with a password and Internet connection. Smartphone Internet access has made alerts and reports from the POS very accessible. Tablets have helped create the Mobile POS system, and Mobile POS applications also include payments, loyalty, online ordering, table side ordering by staff and table top ordering by customers. Regarding the payments, mobile POS can accept all kinds of payment methods from contactless cards, EMV chip-enabled cards, and mobile NFC enabled cards.[20] Mobile POS (AKA mPOS) is growing quickly with new developers entering the market almost on a daily basis. An updated list of developers is maintained and available for downloading at no charge.[21]

With the proliferation of low-priced touchscreen tablet computers, more and more restaurants have implemented self-ordering through tablet POS placed permanently on every table. Customers can browse through the menu on the tablet and place their orders which are then sent to the kitchen. This apparently improves service and saves manpower on the part of the restaurant. However this depends on how intelligently the system has been programmed to be.

As a case in point, some self-ordering systems not requiring staff assistance may not properly recognize a subsequent order from the same customer at a table. As a result, the customer is left waiting and wondering why his second order of food and drink is not being served.

Another example of how intelligent the system can be, is whether an order that has been placed but not yet been processed by the kitchen can be modified by the customer through the tablet POS. For such an unprocessed order the customer should be given the option to easily retrieve his order and modify it on the tablet POS. But when his order is being processed this function should then be automatically disabled.

Self-ordering systems are not always free completely from intervention by the staff and for some good reasons. For example, some restaurants require that items selected by the customers be attended to and can only be placed by the waiter who has the password required to do so. This prevents fake orders - such as may be entered by playful kids - and subsequent dispute on the items ordered. If alcoholic drinks are ordered, it also becomes necessary for the waiter to first verify the age of the customer before sending the order.

The technical specifications for implementing such self-ordering system are more demanding than a single cashier-controlled POS station. On the software and hardware side each tablet on a customer table has to be networked to the cashier POS station and the kitchen computer so that both are continually updated on orders placed. The common database that serves this network must also be capable of serving many concurrent users - cashier, customers, kitchen and perhaps even a drink bar.

It is therefore to be noted by developers that some databases like popularly used Ms Access may have the specifications that it is capable of usage by multiple concurrent users. However under the stress of a POS system, they can fail miserably resulting in constant errors and corruption of data.

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.

The selection of a restaurant POS system is critical to the restaurant's daily operation and is a major investment that the restaurant's management and staff must live with for many years. The restaurant POS system interfaces with all phases of the restaurant operation and with everyone that is involved with the restaurant including guests, suppliers, employees, managers and owners. The selection of a restaurant POS system is a complex process that should be undertaken by the restaurant owner and not delegated to an employee. The purchase process can be summarized into three steps: Design, Compare and Negotiate. The Design step requires research to determine which restaurant POS features are needed for the restaurant operation. With this information the restaurant owner or manager can Compare various restaurant POS solutions to determine which POS systems meet their requirements. The final step is to Negotiate the price, payment terms, included training, initial warranty and ongoing support costs.[22]

Accounting forensics

POS systems record sales for business and tax purposes. Illegal software dubbed "zappers" can be used on POS devices to falsify these records with a view to evading the payment of taxes.

Security

Despite the more advanced technology of a POS system as compared to a simple cash register, the POS system is still as vulnerable to employee theft through the sale window. A dishonest cashier at a retail outlet can collude with a friend who pretends to be just another customer. During checkout the cashier can bypass scanning certain items or enter a lower quantity for some items thus profiting thereby from the "free" goods.

The ability of a POS system to void a closed sale receipt for refund purpose without needing a password from an authorized superior also represents a security loophole. Even a function to issue a receipt with a negative amount which can be useful under certain circumstances, can be exploited by a cashier to easily lift money from the cash drawer.

In order to prevent such employee theft, it is crucial for a POS system to provide an admin window for the boss or administrator to generate and inspect a daily list of sale receipts, especially pertaining to the frequency of cancelled receipts before completion, refunded receipts and negative receipts. This is one effective way to alert the company to any suspicious activity - such as a high number of cancelled sales by a certain cashier - that may be going on and to take monitoring action.

To further deter employee theft the sale counter should also be equipped with a closed-circuit television camera pointed at the POS system to monitor and record all the activities.

At the backend, price and other changes like discounts to inventory items through the administration module should also be secured with passwords provided only to trusted administrators. Any changes made should also be logged and capable of being subsequently retrieved for inspection.

The sale records and inventory are highly important to the business because they provide very useful information to the company in terms of customer preferences, customer membership particulars, what are the top selling products, who are the vendors and what margins the company is getting from them, the company monthly total revenue and cost, just to name some.

It is therefore important that reports on these matters generated at the administrative backend be restricted only to trusted personnel. The database from which these reports are generated should also be secured via passwords or via encryption of data stored in the database so as to prevent them from being copied or tampered with.

Despite all such precautions and more, the POS system can never be entirely water tight in security from internal misuse if a clever but dishonest employee knows how to exploit many of its otherwise useful capabilities.

News reports on POS system hacking show that hackers are more interested in stealing credit card information than anything else. The ease and advantage offered by the ability of a POS system to integrate credit card processing thus has a downside. In this news report 'How hackers gave Subway a $3 million lesson in point-of-sale security' hackers were able to steal credit card data from 80,000 customers because Subway's security and POS configuration standards for PCI Compliance - which governs credit card and debit card payment systems security - were "directly and blatantly disregarded" by Subway franchisees.

In some countries credit and debit cards are only processed via payment terminals. Thus one may see quite a number of such terminals for different cards cluttering up a sale counter. This inconvenience is however offset by the fact that credit and debit card data is far less vulnerable to hackers, unlike when payment cards are processed through the POS system where security is contingent upon the actions taken by end-users and developers.

See also

References

  1. ↑ "Paperless Receipt Solution (PRS) System". James Dyson Foundation. Retrieved August 9, 2015.
  2. ↑ "Electronic Transmission of Prescriptions". Business Services Authority. Retrieved August 9, 2015.
  3. ↑ Times. "Tricks traders use to evade billions of francs in taxes". The New Times. Retrieved August 9, 2015.
  4. ↑ "William M. Brobeck, John S. Givins, Jr., Philip F. Meads, Jr., Robert E. Thomas; United States Patent 3,946,220". uspto.gov.
  5. ↑ "Eugene Mosher". Enotes.com. Retrieved 2012-06-12.
  6. ↑ http://commons.wikimedia.org/wiki/File:Comdex_1986.png#globalusage. Missing or empty |title= (help)
  7. ↑ "ViewTouch". ViewTouch. Retrieved 8 December 2012.
  8. ↑ Gigi Bisson (2008-04-25). "Getting Down To Business". Viewtouch.com. Retrieved 2013-07-12.
  9. ↑ The ViewTouch restaurant system by Giselle Bisson
  10. ↑ "File:Comdex 1986.png — Wikimedia Commons". Commons.wikimedia.org. Retrieved 2013-07-12.
  11. ↑ Kaplan, Karen. "Do-It-Yourself Solution: Small Grocery Chain Has Big Plans for Its Retailing Software", "Los Angeles Times", November 29, 1995, accessed December 10, 2010.
  12. ↑ "Mobile Point-of-Sale Apps: Redefining the Retail Industry". Scandit. 10 May 2013. Retrieved 20 August 2015.
  13. ↑ "Cloud technology pays dividends to EPOS Now". Bdaily. Bdaily. Retrieved 18 February 2016.
  14. ↑ Easterbrook, Emma (5 February 2014). "RBTE 2014: Cybertill back with a bang!". EssentialRetail. Retrieved 3 March 2015.
  15. 1 2 The Online POS System Revolution via Small Business Bonfire
  16. ↑ The Benefits and Risks of Cloud Point-of-Sale via Tapas Technologies
  17. ↑ "How Cloud-Based POS Works". Bluebird. Retrieved 28 February 2015.
  18. ↑ "Overheating brings down Microsoft data center". DatacenterDynamics. Retrieved 2016-04-14.
  19. ↑ "iPad POS | EPOSability". www.eposability.com. Retrieved 2016-04-11.
  20. ↑ "mPOS | Market-Inspector". www.epossystemsguide.co.uk (in Danish). Retrieved 2016-05-03.
  21. ↑ Frazier, Bob (April 19, 2014). "Restaurant POS Software List". POS Advice Link. External link in |publisher= (help)
  22. ↑ Frazier, Bob (October 16, 2013). "Restaurant POS 3-Step Purchase Process". Newswire. Retrieved February 15, 2014.

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