Q:

How do POS terminals work?

A:

POS, or Point of sale, terminals capture real-time data on purchase transactions and generate estimates of product sales and market share. POS systems can track and record customer purchases and orders, process debit and credit cards, manage inventory and connect with other POS terminals via a network.

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Shoppers usually take their products to a register, where the cashier uses a bar scanner to read the description and price on the tag of every item. The POS system automatically finds the total, deducts any discounts and applies the sales tax. It can also send customer information to a marketing database and transactions records to an inventory system. When ever inventory is running low, the POS system issues an alert. When the shopper pays by swiping their credit or debit card in the card reader, the POS terminal checks the card's validity, connects to the bank that issued the card and once the payment has been credited to the account, prints out a receipt to the shopper.

At the core of every POS terminal is a personal computer that has I/O devices and application programs that are specific to a particular environment or industry. POS terminals join several retail processes in order to reduce the time cashiers spend processing financial transactions.

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