Deciding on a new point of sale solution is difficult. I’d like to talk about some common red flags that you should watch for. When looking for the right POS system most people base their research on the following criteria:
Obviously you want to narrow your decision down to POS solutions that fit your needs. After all, an inexpensive solution is worthless if it does not work for your business.
- Initial Investment
Whether you are switching POS systems or starting fresh, there will be an initial investment. In most cases this can be paying for setup, hardware, or legacy software licence fees.
- Maintenance Cost
Pretty much every system has ongoing cost involved. With software as a service, this is usually the monthly or annual service fee. In addition, most POS solutions come with service contracts and don’t forget about credit card processing fees. Less obvious costs are things that require your time. Inefficient design or manual labor such as data entry can quickly eat up your time, which is your most valuable resource.
Along with the three criteria above, retail POS buyers will have to face many different scenarios with even more pros and cons for their particular case. However, there are some things that many store owners miss when making their decision.
1) Wasting your Investment
I know, many people like buying a product outright and owning it versus renting. However, when it comes to software, this might not be the smartest move. Here is why: You don’t know how long your investment is actually going to last. Reasons for that are:
- The developer of your software discontinues the product or goes out of business. In this case you don’t just lose support — you might also be out of PCI compliance!
- New laws or payment requirements force you to update your system sooner than you thought. This can be as simple as a new tax rate which your existing system can’t handle. As far as credit card processing goes, I think we all noticed what happened when EMV was introduced and chip card readers were required. Suddenly, many POS solutions were outdated.
- Your new POS system doesn’t work out. This is probably the most common case because it is difficult to evaluate a system completely until you are using it in your day-to-day routine. There will always be risks and sometimes you don’t discover serious problems until after the refund period expires. In many cases, the offered support will drop dramatically once you are past your refund period as well.
In all of these cases you may lose your large initial investment. To protect yourself, try to avoid systems with high up-front costs and consider a month to month option. This might look more expensive over a long period but the expense is foreseeable and you can embed it into your budget.
2) Don’t get locked in
Does a product look amazing and the fees are inexpensive or at least reasonable? Why wouldn’t you sign a 2 or even 5 year contract? The right question to ask in this instance is: Why does a company need a contract that locks you in if their product is so great? Wouldn’t you just stick with it automatically? There are several reasons why companies have minimum term contracts and, as you can probably guess, most are not beneficial to you as a buyer:
- They are overselling and won’t actually be able to deliver
- Fees will increase
- There are embedded fees such as credit card processing fees
The last point is a very common practice. As most business owners are painfully aware, credit card processing contracts are not easily understood and involve all kinds of unexpected, or hidden, fees. If you are locked into a POS system that requires you to use a certain merchant service, then you might be paying a lot more money than you initially thought.
3) Don’t pay extra for support
We all know that sometimes help is required and some solutions require more help than others. However, ask yourself what you are paying for when buying the system. You expect a working product. When it’s not working, the vendor shouldn’t charge you extra for helping you. Now, let me be clear, it is perfectly reasonable to pay extra for an add on service such as a help desk that assists you further with system setup or training. Technical support, however, should always be included. If it isn’t, you should ask yourself and your vendor whether their product actually works as promised or if you need to be on hold with support for 10 minutes every time you need anything?
Needless to say, I have a product recommendation for you and the following video will make you understand why: