How to choose a new point-of-sales software system

So your point-of-sale system is starting to creak and wheeze while it rings and chings? Maybe it's time to upgrade.

Modern retail software offers more ways to achieve productivity. Among the innovations are new data entry capabilities, sleek interfaces with alternative sales avenues and more-useful customized reports.

"Many people think all POS software systems do basically the same thing," says retail consultant Jeff Haefner, Marion, Iowa. "This is a common misconception. Every POS system has different features, strengths, weaknesses and intended uses." Here are some advanced features:

  • Tracking customer requests and providing follow-up ticklers.
  • Displaying customer sales and service histories.
  • Integrating sales and returns with accounting and inventory programs.
  • Searching for items by merchandise category or descriptive name as well as by SKU.
  • Displaying item availability and shelf location.
  • Including credit card transactions and gift certificate sales in daily reports and accounting program.
  • Allowing user-definable codes for tender combinations for single transactions. (Useful, for example, when a customer wants to pay for one item with a combination of a credit card and a gift certificate.)
  • Integrating daily reports and accounting programs with sales made through your Web store, or even through eBay.
  • Updating your accounting program with electronic gift card frequent buyer program transactions.


Those are just a few of the dozens of benefits offered by newer POS systems, which are becoming more flexible in meeting unique needs.

So when is it time to upgrade your system? Maybe you need capabilities your current software can't provide. Or maybe your hardware is starting to malfunction and your vendor's tech support won't respond quickly or can't solve your problems at all. And how about transaction-processing speed? Maybe your system worked great when you were starting out but is sluggish now that volume is higher.

"The decision comes down to this: What additional benefits are you going to get from a new system." says Geoff Knapp, chairman of CAM Commerce Solutions, a POS vendor in Fountain Valley, Calif. "And are those benefits worth the investment?" Sometimes the replacement decision is put off for surprising lengths of time.

"While systems are often replaced after five to seven years, I know some retailers who have kept systems 15 years," says Knapp. "A replacement decision is often forced when an older system is no longer reliable or supported."

Experts suggest evaluating your current POS system every three to five years. Check to see what alternatives are available and ask yourself if upgrading will help you serve your customers better or save you time.


"Choosing POS software is difficult because there are so many systems and features to consider," says Haefner. Ease the procedure by starting two lists. For the first, list features you need that your current system does not provide. For the second, list features that you are currently using and that you do not want to lose.

If that first list is top of mind for most of us, the second is often overlooked. "It's possible to lose important features in a new system," warns Knapp. "You will notice what you lose more quickly than what you gain. Maybe there are two or three reports that you live on. Maybe you run them every day of the week. When you evaluate replacement systems, test them to see if you can either get those same reports or alternatives that are even better."

"With so many options out there, it's very difficult to determine what you really need," says Haefner, who has created a POS software comparison chart in his book, The Retail POS Software Buyers Guide (see below, "Get More Information").


Knowing what you want is one thing. Deciding where to get it is another. There are thousands of POS vendors out there and new ones are popping up all the time. Many times a retailer will develop an in-house system, then pack it up and market it to everyone under the sun. But you want a vendor who not only has sufficient expertise but will also be around to answer questions, solve problems and install upgrades.

"You need to thoroughly investigate any prospective vendor," says Bob Crichlow, president of The General Store, a POS vendor in Lakeland, Fla. "Find out how long the company has been in business. Does it have experience applying its software to the special needs of stores similar to yours? And how many people are in tech support?"

Crichlow suggests visiting the company in person to help get an assessment of its financial stability. Does it have a substantial office area that is kept well maintained, or is it operating out of someone's basement? If it's the latter, the vendor may disappear overnight, leaving you with an expensive, unsupported system.

Ask for references. Obtain at least three names of retailers who have installed the proposed system. Then interview those retailers to find out how well the system works, whether it provides all the promised reports and services, and how the vendor responds to service and upgrade requests.

Also ask how often the vendor upgrades the software with new features. A more dynamic software developer will carry out regular improvements. Many firms will allow you to dial in and download software upgrades at no charge.

Finally, Crichlow says, it's important to ask for demonstrations of proposed programs. His company offers two demos: The first is a stripped-down version that facilitates initial testing when a customer is reviewing alternatives. The second is a full version that allows the customer to fully test prior to buying.

In particular, test the system for its ability to perform your most common and essential tasks. "Test how the proposed system handles layaways, transfers, adjustments and every other transaction that could have a piece of paper associated with it," says Knapp. "Try to do them all on the system you are considering."

While testing, chat as much as you can with the vendor's personnel. This will help you determine their willingness to help. "When you purchase POS software you're buying a relationship, not just a product," says Haefner. "You'll be in continual contact with the vendor for software updates, support, training, hardware and consulting."


So in terms of dollars, what are we talking about? Prices vary according to features desired. One established vendor, though, charges a $2,500 annual fee for leasing a POS and accounting software system on two to five workstations. Without the accounting module, the fee is $1,500. For single users the analogous figures are $1,500 and $1,000.

Additionally, this vendor offers an annual service contract for $500 to $700 for networked users and $350 to $500 for single users. The upper ends of the price ranges provide more hours of accessibility to tech support.

Equipment upgrades will add to the total. Attach a receipt printer, cash drawer and bar code scanner for an additional $600 or so. Add a personal computer to which everything above is attached and you're talking an additional $1,000 to $2,000.

For retailers with more than one or two terminals, the costs can mount. No wonder many retailers lease their equipment to cushion the blow. "Leasing is usually the best way to go," says Haefner. "It's a great way to spread out your cash, allowing you to buy higher-end software and equipment. And you have the option to deduct 100 percent of the lease payment as a business expense."

Haefner points out that leasing can help avoid the big cash crimp that can result when equipment is purchased outright. You can utilize the extra cash on hand to purchase another product line, buy additional advertising or satisfy any other need.

If you decide to lease, says Haefner, make sure you understand the terms. "Some leases offer a $1 buyout at the end of the term," he says. "Others set up smaller payments but require you to pay a percentage of the balance at the end of the lease."

Purchasing new POS equipment can be a demanding task that results in big profits as you boost sales and increase margins. Use the tips in this article to help determine if it's time to upgrade and to find the right vendor for your system.

Get More Information

  • The Retail POS Software Buyers Guide, by Jeff Haefner. This E-book includes feature comparison guidelines and vendor information. Point your browser to While there you can sign up for a free "POS Tips Newsletter" with ideas about how to get the most out of your POS system.
  • POS Buyer's Guide. Tips on selecting hardware and software, and on determining the features you need. Published by AM/PM Service, a Vancouver-based POS vendor. Available on the Web. Go to and click on "Buyer's Guide."


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