A POS (point of sale) system is what a shop, café or salon uses to complete a sale in person. It is the screen where staff add items, the card reader the customer taps, and the software that records each transaction. Modern ones run on a tablet or phone and store their data in the cloud.
What sits inside a point of sale setup
The hardware usually includes a tablet or terminal, a card reader that accepts chip, contactless and mobile wallets, and optionally a receipt printer, cash drawer and barcode scanner. The software holds your product list with prices and taxes, applies discounts, splits bills and records how each sale was paid.
When a card is tapped, the reader encrypts the card data and sends it to the payment processor, which asks the card network and the customer's bank to approve it. Approval comes back in a second or two, the sale is saved, and stock counts for those items go down.
A café example
A café running Square or Toast sets up its menu once, with modifiers like oat milk or an extra shot. A barista taps the items, the customer taps their phone, and the order prints in the kitchen. At closing, the owner sees sales by hour and by item, and knows the oat milk is running low because each drink deducted from the count.
Why a POS matters if you also sell online
If you only sell in person, a POS is your till and your sales report. Once you also have a website store, the key question is whether the two share one product catalogue and one stock count. Shopify POS, Square and Lightspeed all offer this. Without it, the last item can sell in the shop at the same moment someone buys it online. Good inventory management depends on the POS and the website using the same SKUs.
Mistakes when choosing one
- Comparing only the hardware price. Transaction fees and monthly software plans usually cost more over a year.
- Getting locked into a processor. Some POS systems only work with their own payments, which makes switching later expensive.
- Not checking offline mode. Find out what happens when the internet drops during a busy lunch.
- Entering products differently online and in store. Mismatched names and codes make combined reports useless.
Related terms
- Payment gateway: the online equivalent of the card reader.
- Inventory management: the stock tracking a POS feeds.
- SKU: the code that links in-store and online products.
- CRM: where customer details from sales can be kept.