05 Sep
Choosing a point-of-sale (POS) system is one of the most important technology investments for any retail business. A robust POS forms the backbone of front-end operations like sales, inventory, and payments. However, with the wide range of POS options available in the market, it can be challenging for owners to determine realistic costs.
This blog aims to provide retailers with an overview of how much does a POS system costs, the factors influencing pricing and help develop an informed budget.
The 3 top factors impacting POS system costs
Hardware
The hardware is usually one of the largest upfront costs of a POS system. Most basic POS systems will require a cash register, printer, customer-facing display, and credit card reader. Premium systems may also include additional peripherals like bar code scanners, scales, loyalty program terminals, etc. Hardware costs can range anywhere from a few hundred dollars for a basic register to over $10,000 for a fully loaded multi-user system.
Software and Features
The software and features you need determine the ongoing monthly/annual costs. Basic software with just inventory management and basic reporting may cost under $100 per month. Whereas a fully featured system with inventory, CRM, analytics, mobile capabilities, etc. can cost over $200 per month. Some additional expensive features include integrated EMV payment processing, gift/loyalty cards, online ordering, custom software integrations, etc.
Support and Services
Ongoing support costs include fees for software upgrades, replacements, repairs, VAT processing, PCI compliance, cybersecurity, and technical assistance with troubleshooting, setup, and training. Built-in phone/email support is common in monthly or annual software fees but custom services like on-site setup and training demand additional charges. Live chat support drives costs higher than basic 9-5 assistance.
Also Read: A guide to POS systems in retail
Things that can cause POS costs to fluctuate
The total or average POS system cost is impacted by many factors that can cause pricing to go up or down. Careful evaluation of these variables is important to develop an accurate budget and avoid unforeseen charges. Some of the key things that influence POS costs include:
Number of Register Stations
Setting up multiple POS stations for a retail location with many cashiers will naturally be more expensive than a single-user system. Each additional register requires extra hardware in the form of cash drawers, displays, stands, etc. plus additional user licenses for the software. So, the POS system installation cost will vary accordingly.
Payment Processing Rates
Card transaction rates are usually a percentage of the payment amount plus a small fixed fee per swipe. Stores with high average ticket sizes or transaction volumes will see processing make up a large part of their monthly POS costs compared to low-volume retailers. Factors like projected monthly card sales need to be closely considered while budgeting this expense.
Longer Term Contracts
Vendors typically offer discounted monthly pricing by committing to 1-3 year contracts vs. flexible month-to-month plans. However, POS systems with no monthly fee lock businesses into set costs even if needs change. Penalties may apply for early termination too. The trade-off between cost savings vs. flexibility needs weighing.
Add-On Modules
Integrating extra functionality like ERP integrations, CRM tools, loyalty programs, inventory management, etc. adds to initial setup and recurring software fees. It is important to only select truly essential extra features.
Custom Report or Interface Development
Requests for customized reports, branded dashboards, or specialized integrations result in additional development charges on top of standard software costs. Unless absolutely crucial, utilizing out-of-box features saves money.
Support Plans
While basic online help documentation and forums may suffice for small companies, industries like restaurants likely require more hands-on customer support through dedicated lines or onsite visits. Premium support drives up monthly expenses.
Volume Discounts
Some vendors reward high-volume retailers processing over $2-5 million annually with discounted rates if committed to a long-term partnership. However such volume targets may be unrealistic for most small to medium businesses.
Rising Card Processing Rates
As interchange standards change, the percentage and per-transaction fees charged by payment vendors and banks to retailers also fluctuate periodically. This impacts budgets that don’t provision for some rate hikes.
Things to consider before buying a POS system
Choosing a good POS system for a small business is a significant investment that needs to deliver value for many years. Careful upfront planning can prevent costly mistakes. Retailers must assess multiple business and technical factors to select the right options within their budget:
Business Type
The features prioritized vary greatly between services like QSR chains versus boutiques. Ensure the targeted POS caters to specific industry needs around order management, menus, inventory, etc.
Current and Future Scale
Project growth plans over 3-5 years to buy a system equipped with capacity headroom. Factor in abilities to support additional users, locations, and functionalities as the business expands its scale and scope.
Technical Expertise
Consider the technical skills and comfort levels of available in-house staff to support and troubleshoot a system without excessive dependencies on vendors. Ease of use is paramount.
Payment Volumes
Average ticket size and projected monthly card payment volumes need assessing to budget accurate costs around percentage-based processing rates that make a large impact. Even small variations here significantly change total outgoings.
Contracts and Pricing Flexibility
Long-term locking into rigid costs may not suit dynamic smaller businesses. Opt for POS system monthly fee plans that allow budgeting flexibility or at least ensure minimal penalties for early exits from long contracts.
Standalone vs. Cloud Options
Weigh available online/offline functionalities, data security features, integration abilities, and network dependencies of each deployment model against needs. Reliability is crucial for retail operations.
Support Responsiveness
Downtime due to technical issues leads to direct revenue loss. Factors like quick remote diagnostics, on-call support staff, and emergency response SLAs need evaluation based on individual risk profiles.
Existing Software Integrations
Check compatibility with in-use accounting, CRM, or retail inventory management software to avoid redundant data entry across disparate systems or prohibitively complex customizations.
Hardware Scalability
Consider potential requirements around added peripherals like scanners, card readers, loyalty terminals, scales, etc. over time. Modular systems adapt better to evolving needs.
Training and Onboarding
Budget time and costs for staff training to get early ROI. Select vendors proven to speed onboarding through documentation, workshops, helplines, etc. pre and post-go-live.
Hana Retail’s flexible pricing for all business needs
Hana Retail understands that no two businesses are alike. That’s why our pricing model is designed with flexibility and transparency in mind. Whether you’re just getting started or looking to scale, we have a plan tailored to your needs.
Hardware Costs
For the essentials, our Hana Retail Register packs powerful features into a compact countertop device for just $799.
Upgrade to our fully integrated Multi-Station System for advanced functionality across multiple cashwraps and users. Pricing depends on configuration so make sure you contact us before making any purchase.
Additional peripherals like barcode scanners, receipt printers, and customer displays are also available and affordably priced to add convenient features as your business grows.
Also Read: Retail POS Hardware Buying Guide
Software Plans
The choice of 3 scalable plans ensures you only pay for what you utilize:
Free Plan: Perfect for initial testing or low-volume retailers. Includes basic POS functionality at $0/month. Ideal plan in POS for small businesses doing under $5k in monthly sales.
Plus Plan: For expanding operations requiring robust inventory control and offline sales capabilities. Priced at just $60/month regardless of items or locations managed. Suits businesses with $5k-$30k monthly sales.
Premium Plan: Tailored for high-volume enterprises processing over $30k/month. Includes all features at a custom rate negotiated based on business size and needs.
Payment Processing
All plans include fully PCI-compliant credit card processing starting at affordable rates:
In-person payments: 2.6% + 10¢ per transaction
Online Payments: 2.9% + 30¢ per transaction
Card on file and manually entered transactions: 3.5% + 15¢ per transaction
AfterPay transactions: 6% + $0.30 per transaction
No hidden fees – what you see is what you pay. Rates may qualify for volume discounts over $250k annually processed.
Add-Ons and Services
Additional modules like eCommerce, loyalty programs, marketing automation, etc. are available for plans starting at $15-45/month. Flexible month-to-month contracts allow pausing/canceling unused features at any time.
On-premise POS installation services, training workshops, and support are affordably priced services to ensure a seamless onboarding experience.
The Conclusion
While a POS system is a sizable investment, it provides great value through increased efficiency, insights into sales patterns, and improved customer service in the long run. Choosing the right one is crucial so that you can get a positive return on investment.
Through its transparent usage-based model, Hana Retail promises retailers optimized budgeting and maximum savings. Contact our representative today for a FREE customized quote based on your business details!
