What is POS purchase? Everything you need to know

As a restaurant owner, taking payments from your customers (after they have enjoyed your food at your restaurant or after delivering the food to their location) is going to be a routine activity. Customers can pay you in cash or opt for digital ways to complete the payment. With more and more customers embracing portable technology to make payments, a POS purchase can happen in seconds from any location.

This blog will help you understand what a POS purchase

During the completion of the purchase process, the customer makes a payment using a credit or debit card, cash or check. At this point, an exchange of money takes place. This is known as the Point Of Sale.

POS systems form the backbone of a business’ overall structure. Modern restaurants are increasingly relying on self-service payment kiosks to help customers make instantaneous, convenient payments. With POS systems evolving constantly, businesses operating in the food industry are relying primarily on self-service payment terminals to receive quick payments.

A modern business owner must understand the POS transaction process and everything that goes into completing a commercial transaction using POS systems.

POS purchases are based on a point-of-sale system. POS is the actual point at which the payment execution happens. If the payment is made in a physical location, that is, inside the restaurant, a POS terminal would be used so that card payments can be processed. Depending on how the POS terminal is set up, debit or credit card payments can be processed.

POS purchases can also be done through a virtual sales point like an online website or other digital wallets. Customers make use of a computer or mobile devices to complete the money transaction. All the need to do while checking out is enter the card details to make the POS purchase.

A customer browses your restaurant menu and decides to order one or few items. When they place the order or checkout on a digital platform, the customer is at the point of sale and the purchase they make becomes a POS purchase.

Point-Of-Sale and Point-Of-Purchase are often confused with each other. Restaurant owners must understand that they are different. However, both lead up to the final customer purchase transaction. As an entrepreneur, you need to understand the slight difference between the two, as it will help you maximize cash flow and streamline restaurant business operations.

Point Of Purchase – POP is a point during the buying process where the buyer decides to buy a product or place an order. At a restaurant, most often, this happens at the POS terminal. POP is a term used from the customer’s point of view and could include the entire physical restaurant or store or something smaller like a window display. The product, that is, the food, can itself be a part of the POP decision.

POP marketing strategies are designed to persuade or encourage people to make purchases. This type of marketing improves impulse buying – diners will order more items than they originally intended to before visiting the restaurant or the website. Therefore, POP marketing, when done right, has the potential to increase sales figures. Most often, POS systems are also confused with Kitchen Display System (KDS).

POS purchases are done at the POS terminal. The technology utilized to receive payments and print the receipt is known as Point-Of-Sale (POS). This system creates a communication link with the customer’s bank so that the bank statement can be produced. Such purchases are also referred to as charges. POS purchases are of the following types:

· Debit Or Credit Card Purchases – When a customer uses a credit or debit card, their credit card statement indicates it as a charge on their checking account. Along with the name of the restaurant or food outlet, one can also see the words ‘POS transaction’, especially if a debit card has been used. Every bank or payment company has its own unique way of displaying the transaction data on the statement. However, there should be sufficient information enabling the customer to decipher where and when the payment was made.

· Unauthorized Charges – This charge will not be precisely flagged as unauthorized. It will be shown as a charge on the customer’s bank statement as something that they fail to recognize. The customer can dispute such charges and ask for reimbursement. This charge could indicate someone using the customer’s card without his knowledge or permission. This indicates a serious problem like theft.

· Online POS Transactions – When a purchase is made through an ecommerce store, there is no direct interaction with the POS system. However, the fee will still be shown in the bank statement as a POS payment. The statement could read either as ‘POS Online’ or mention the name of the website or online store.

· Product Returns – The Point Of Sale system can also be used to return purchased products. This transaction shows up on the customer’s bank statement as credit and no debit. In some instances, they can also be seen as statements similar to POS purchases.

Benefits Of POS Purchases

In earlier times, POS purchases involved a customer making a cash purchase at the location of the vendor. But with the modernization of commercial transactions, increase of and advancements in technological facilities, every type of POS purchase offers several benefits for the owner and the business. The benefits are as follows:

· Streamlining of business operations

· Automation of transaction processes enabling key sales data to get tracked

· Increase in overall functionality

· Precise tracking of pricing, inventory, sales and revenue

· Identify discrepancies in cash flow or pricing strategy

· Easy monitoring of inventory levels and customer purchasing patterns

· Avoid customer service issues or identify and resolve them in a speedy manner

· Customize the marketing and purchasing strategy to match the consumers’ purchase behavior

POS Purchases With Other Equipment

Restaurant owners must remember that while a POS system increases efficiency, it is not necessary to complete a point-of-sale purchase. If the customer uses credit or debit cards, the restaurant owner can use mobile card readers attached to tablets or smartphones, countertop credit card terminals, or virtual terminals that allow business owners to enter payment details into a computer.

If the restaurant accepts only cash, the money transaction can still be considered a POS purchase. The restaurateur can use a cash register or a secure locking cash drawer for cash storage.

Restaurants can opt for a tablet or a mobile POS for convenience and utility. Tablets are portable and can be easily carried by staff to customer tables. Guests can swipe their cards from the comfort of the place where they dined. Tablets can also be placed on stands to create a fixed location checkout. This occupies less space than a full-fledged POS system.

This has helped restaurants to boost their revenue by 20%.

The right payment system facilitates prompt, hassle-free checkout for customers, ensuring great customer satisfaction. While choosing a restaurant POS system, a restaurateur must decide whether the tablets need to be portable or positioned at a stationary checkout counter to complete transactions with speed and convenience. The type of restaurant – whether it is a quick service or fine dining type – also needs to be considered while choosing the restaurant POS type.

To meet intensifying competition and help in brand promotion, POP displays have undergone a modern facelift. POP manufacturers now offer displays with improvised aesthetics and innovative product designs.

Modern touchscreen innovations and cloud-based software allow customers to make direct interactions with POS systems. So, the hospitality industry has embraced location-based technology – wherein systems process transactions at customer locations. You might have noticed, at several restaurants, customers view menus and place orders using QR codes or terminals located on their tables. Customers can also make use of similar terminals to customize their food orders, place specific instructions or pay restaurant bills.

Q. What was the first Point Of Sale System?

Ans: Invented in 1879 by James Ritty, the first point-of-sale (POS) system was a cash register. Five years later, Ritty sold his invention to the National Cash register (NCR) Corporation. Ritty used this cash register in his saloon. Users recorded transactions on it enabling better bookkeeping, auditing and finance management.

Q. What is the future for POP?

Ans: With increasing competition, restaurants aiming to build a robust brand must mandatorily deliver a seamless and optimized customer purchase experience. Restaurants are increasingly turning towards AI and digital media innovations to develop marketing strategies that improve purchase rates and their value.

The point of purchase is a crucial element in a customer’s purchase journey. It needs to be incorporated into the overall marketing and customer service strategy.

POS marketing has different forms. But with great developments in AI and digital media, there are several retailer improvements and newer possibilities for influencing customer purchasing decisions. This works extremely well not only for brick-and-mortar businesses but for e-commerce stores as well.

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