Point of Sale Systems Law and Legal Definition
Point-of-sale systems (POS) represent the computerization of the cash register—and their linking to data-bases—thus providing businesses with more digital data and the ability to know themselves. POS systems give businesses the ability to retain and analyze a wide variety of inventory and transaction data on a continuous basis. They have been touted as valuable tools for a wide variety of business purposes, including refining target marketing strategies; tracking supplier purchases; determining customer purchasing patterns; analyzing sales (on a daily, monthly, or annual basis) of each inventory item, department, or supplier; and creating reports for use in making purchases, reorders, etc. Basic point-of-sale systems currently in use include stand alone electronic cash registers, also known as ECRs; ECR-based network systems; and controller-based systems. All of these function essentially as sales and cash management tools, but each has unique features.
Stand alone ECRs. These electronic registers operate independently of one another; they are thus the most limited of the three POS system types. They cannot provide their owners with storewide reporting or file sharing; they can merely report the business activity at that particular register. Given their limitations, ECRs are usually used by small independent retailers that feature a limited number of register sites. Indeed, these systems are often well-suited for small businesses because they are the least expensive of the POS options yet nonetheless provide many helpful features, including automatic sales and tax calculation ability; calculation of change owed to the customer; sales report generation capability; capacity to sort food stamps and trading stamps (through programming of function keys); and scanning.
Network Systems. Network or ECR-based point-of-sale systems feature multiple terminals arranged into a primary/secondary configuration. One ECR in the store, equipped with extra memory capacity, serves as the primary terminal and receives data from the secondary terminals. These systems give businesses the added capacity to manage storewide data and transmit data to mainframe or network server.
Controller-Based POS Systems. The top POS systems are controller-based systems in which each terminal is connected to a computer—the "controller" of the system; it receives and stores all sales, merchandise, and credit data. The controller manages the system, checks for errors, and formats data for the main computer used by the enterprise. It does its own sales analysis and does price look-up. Dual-control systems provide additional safety in case of failure. The use of scanners as the input element to these systems eliminates many errors in keyed alternatives. For this reason scanning has become accepted even in mid-sized retail operations as well.
Point-of-sale systems, like many other computer-based innovations, continue to change and develop at a rapid pace. In addition, the demand for POS systems has spawned many new manufacturers, each of which offers a dizzying array of standard and optional POS features to their customers. For example, some electronic POS systems now cover hand-held scanning devices, customer promotions, credit-card confirmations, counterfeit money checks, and staff scheduling. Given the expense involved and the proliferating number of POS software packages, small business owners should make sure that they adequately research both their current and future needs before making a purchase so that they are able to acquire a customized POS system that best fills their current operating requirements and can accommodate future changes in the business. Research will be somewhat daunting because new products are appearing with great frequency—but the choice of implementations which support the right peripherals for the business will often justify a higher price.
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Hillstrom, Northern Lights
updated by Magee, ECDI