Businesses love a bargain, and there’s no bargain better than “free.” That explains why a lot of small businesses are interested in using POS systems with no monthly fees.
POS systems have become standard equipment for retailers of all types, allowing them to streamline their credit card transactions and accept more forms of payment. While many of these POS products charge no monthly fee, they usually impose high transaction fees or require multi-year processing contracts. POS systems with no monthly fees typically offer a limited range of features as well.
To realize the benefits of POS systems, businesses have to make sure the approach they choose is the best option for their operations, whether or not the system charges a monthly fee. For many retail stores, the best bargain is a POS system that offers the right mix of features, ease of use, and reliability at a price that fits comfortably in their budget.
What You Can Expect from a POS System with No Monthly Fees
Many mobile credit card processing services offer free POS software providing limited features, especially compared to the functionality and sleek interfaces of POS systems that cost hundreds or thousands of dollars each year. Retailers that process only a handful of payments per day may find the free POS option meets their needs while saving them from a monthly POS fee.
However, the price retailers pay in exchange for avoiding a monthly charge and a long-term contract is the need to pay a high per-transaction fee. More importantly, the “free” POS systems lack many useful features found in top-rated commercial POS offerings:
- Inventory tracking
- Order management
- Employee scheduling
- Customer management
- Integration with third-party software
- Discounts, loyalty programs, and other offers
Another limitation of POS systems with no monthly fees is losing the opportunity to choose your own transaction processing service, particularly a processor that offers lower transaction fees. This is especially costly for retailers that process high volumes of transactions.
Comparing Retail POS Systems
In most cases, the free POS equipment is supplied by a credit card processing service such as SumUp, Paypal, or Square in exchange for agreeing to have all your transactions processed by the company. The trade-off is that POS systems with no monthly fees limit the number of inventory items you can track, the number of registers you can use, and the number of employees who can access the system. Free POS systems also lack the ability to analyze sales data and business performance based on the information that the systems collect, for example.
Business.com compares the features of three different types of POS systems for retail businesses:
- Tablet and online POS systems benefit from low upfront costs, especially when retailers use their own Android and iOS devices to record transactions. These services typically use WiFi or 4G cell networks; they either charge a low monthly fee or charge “per swipe” for such basic POS services as inventory tracking, reporting, and customer management.
- All-in-one POS systems feature touch screen terminals and POS software that supports barcode scanning, receipt printing, delivery tracking, online ordering, appointment scheduling, and integrated cash drawers. Some vendors provide the hardware and software for free in exchange for a long-term, non-cancelable contract. Others sell retailers their proprietary hardware and charge the stores a monthly fee for the software while also providing their own payment processing service.
- Traditional POS systems are the most expensive option, but they also provide retailers with the most flexibility in terms of choice of hardware, software, and payment services. This appeals to retailers who prefer to retain their existing credit card processing service, for example. Among the peripherals available for these systems are age verification, kitchen printers, omnidirectional barcode scanners, and hand-held inventory trackers.
Tips for Choosing a POS System
The abundance of features available in POS systems provides retailers with a wealth of options to choose from when putting together a POS operation for their business. The challenge is knowing how to cut through the clutter to find the optimal mix of POS features to meet your organization’s needs. Planning software vendor Bplan offers a three-step approach to selecting a POS system:
- Determine whether you’re most concerned with getting the right features for your POS system, or whether your primary goal is to choose the most economical option. If it’s the former, select the POS features you need first, and then strike the best bargain you can for a system with those features. If saving money is your priority, choose a credit card processor first and then use whichever POS system the company supports.
- Choose between using a proprietary POS system or an open one that works with a range of third-party services. Going with a proprietary system generally entails less research upfront because you’ll have fewer hardware and software options to select from. By contrast, an open POS solution gives retailers more options and pricing flexibility, and it is much easier to switch POS systems so you avoid being locked into a single vendor.
- Decide whether you want to lease or buy your POS system hardware. The primary benefit of leasing is lower upfront costs, but you may have to sign a long-term contract with the vendor, so over time leasing may be a more expensive option. POS lease agreements are often made with a separate leasing company rather than with your payment processor, so in some cases, you could end up paying for POS equipment you no longer use. On the other hand, avoid buying a POS system that lacks the latest features, such as contactless payments, to prevent making a big investment in outdated equipment.
For some retailers, a POS system with no monthly fee could be a viable option, particularly those who have low transaction volumes. However, avoiding a monthly fee could turn out to be a false economy for many businesses because such a system will lack features that would make their operations more efficient, more responsive to customers, and ultimately more profitable.
The true value of a POS system for retailers is how it can improve the business’s bottom line. A solution that allows your company to run more efficiently, meet the ever-changing needs of customers, and take advantage of technological innovations could be a great bargain, with or without monthly fees.
Learn more about how the talech POS system provides small and midsize retailers with the features that will help optimize all their business processes, from supply chain management to customer relations. We work with you to determine the best ways to meet the needs of your customers and employees so your business can thrive. We take the time to learn your business so we can balance your specific needs with your budget and comfort level in a custom POS system implementation. The result is a valued investment that will pay for itself in short order. Reach out to us today to sign up for a free demo and learn more about how talech can be your valued partner in the POS world.