What is a Point-of-Sale?
A typical POS will have...
- A method of inputting the codes of goods purchased - usually a bar-code scanner. The codes are then used to find more information about the goods, such as price, from a database
- A system to accept electronic payments - EFTPOS (see below)
- A system to update the stock-level of goods whenever they are sold, and possibly to automatically re-order goods that have low stock-levels (see below)
- A method of producing a receipt for purchases - usually a small dot-matrix printer
Handling Electronic Payments (EFTPOS)
This is how it works…
'Chip & PIN' Payment System
Smart cards are more secure (since the data is encrypted) and more reliable than magnetic strip cards.
When a customer wishes to pay for goods in a store, the customer inserts the bankcard into a smart card reader, and then types in a PIN to confirm that they are the true owner of the card. Once the PIN is verified, the customer can remove the card.
One of the reasons this system has proven popular is the extra level of security it provides for users: At no time does the bankcard need to be handled by anyone other than the card owner, so with this system there is less chance of the card being stolen or copied.
The nickname for the tiny memory device inside the bankcard is a ‘chip’, and the system uses a PIN as identity proof, so the system is nicknamed ‘Chip and PIN’ in the UK.
Automatic Re-Ordering of Stock
Internet Shopping (e-Commerce)
Customers like Internet shopping because...
- The convenience of being able to browse goods from your home
- Stores are open 24 hours a day, every day of the year
- The wider range of choice - can access stores all over the world
- Easy if you have limited mobility (due to a disability, or old age)
- Goods are often cheaper than in stores
- Payment is simple using credit cards or services such as PayPal
- Lower costs since no expensive retail stores and less staff
- Lower costs = lower selling prices = higher sales = bigger profits
- Many more potential customers
- You cannot try items before purchasing (e.g. clothes)
- You may have to wait several days before receiving your goods
- Returning goods or getting help can be difficult
- There is a security risk using credit cards online. The card details may be stolen and used to commit fraud.