Point of Sale – Definition

Cite this article as:"Point of Sale – Definition," in The Business Professor, updated March 28, 2019, last accessed September 26, 2020, https://thebusinessprofessor.com/lesson/point-of-sale-definition/.


Point Of Sale (POS) Definition

Point of Sale (POS) has a couple of interpretations. In this context, it is where your transaction or purchase is finalized. It is the point where payments are made for products sold and services rendered. In most business transactions, customers may take cash, checks, or cards to make payment for goods and services. POS can be in a physical store, a computer, or an electronic device for payment.

A Little More on What is Point Of Sale

Rather than allow customers to go through the conventional way of counter payment, POSs are stress-free and influence customers’ purchase decisions. They also allow buyers flexibility in methods of purchase. Businesses often set up POSs at strategic points in their stores to aid an improved purchase rate. Also, the availability of POS at different sales funnel for individual products or groups will allow staff to promote the goods and attract buyers.

POS allows you to keep the sales report of your business and helps you keep an automatic record of cash inflow. Furthermore, POS enables businesses to have a coordinated collection of data for daily purchases unlike the old cash box or cash register system. Also, the software aids an easy analysis of sales record including the sales time or periods. Finally, POS systems monitor the buying habits of customers and help sellers tailor their markets to suit the needs of the buyers.

Before the invention of POS system and devices, businesses managed sales transactions through the electronic cash registers (ECRSs).

References for Point of Sale System

Academic Research on Point of Sale System

The impact of tobacco promotion at the point of sale: a systematic review, Paynter, J., & Edwards, R. (2009). Nicotine and Tobacco Research, 11(1), 25-35. Tobacco industries have developed a keen interest in investing in POS as these industries have quite a huge budget in favor of POS promotion. The patronage of teenagers or adolescents in tobacco industry has a tendency of increasing and this is why tobacco industries feature at diverse POS points in different places. With this promotion, it is easy to predict the future of smoking among youths because tobacco promotion at diverse POS terminals has a likelihood of increased smoking among youth. This promotion also decreases the attempts of smokers to quit smoking and this can also cause deterioration for previous smokers.


Supply chain decision making: Will shorter cycle times and shared pointofsale information necessarily help?, Steckel, J. H., Gupta, S., & Banerji, A. (2004). Management Science, 50(4), 458-464 This paper discusses whether the information people get at Point-of-sale and shorter cycle times influence decision making in the supply chain or otherwise. This is experimented using the supply chain experiment otherwise known as the ‘beer game’. This study considers the importance of having a shorter cycle time and the benefits of POS information. Through POS information, decision makers can draw up supply chain decisions that will attend to the popular demands of the customers. However, this study also finds out that POS information can be distracting to the decision makers as they have the tendency to neglect relevant information and orders placed at by the supply line.

How customers actually shop: customer interaction with the point of sale, Phillips, H., & Bradshaw, R. (1993). Market Research Society. Journal., 35(1), 1-10. This is a study of the perceived interactions of customers with the POSs and whether the availability of POS affect the way customers shop. It aims to understand how the physical environments of customers affect their purchase impulse or habits. This paper also considers how the mechanics of in-store influence customers’ purchase habits.This study prescribes modification for the classical views of buyers’ behaviors in such a way that these behaviors match the available data and will help enhance a more effective decision making. This moderation is to give accounts for impulse purchases or unplanned purchases by buyers.

How does design affect decision at point of sale?, Connolly, A., & Davison, L. (1996). Journal of Brand Management, 4(2), 100-107. This paper discusses the roles brand designs play in purchase decision making of buyers. It considers a research conducted by Coley Porter Bell with the interest to find out how consumers’ decisions were affected by the designs of the brands they patronise. A research conducted by Henley Centre research revealed that about 73% of purchase decisions are made at the point of purchase, that means, many consumers visit a brand without specific decisions on items to purchase but they make up their minds the the point-of-sale. This paper draws some points from the research which include the role of brand design on the purchase decisions of consumers.

Reaching youth at the point of sale: cigarette marketing is more prevalent in stores where adolescents shop frequently, Henriksen, L., Feighery, E. C., Schleicher, N. C., Haladjian, H. H., & Fortmann, S. P. (2004). Tobacco Control, 13(3), 315-318. This paper examines how a large of of youths are reached at the point-of-sale by tobacco industries. Study shows that many tobacco markets are using POS platforms to attract customers which are mostly youths. The attempts of these industries to reach the youths are displayed in the rate of their influx into POS terminals where adolescents shop regularly. Hence, a store with a large number of adolescents customers become a point of attraction for tobacco markets in a bid to target the youths.

Pointofsale marketing of tobacco products: taking advantage of the socially disadvantaged?, Pointofsale marketing of tobacco products: taking advantage of the socially disadvantaged? The role of POS in tobacco marketing cannot be overemphasized as POS marketing of tobacco has improved tobacco sales despite regulations on tobacco marketing practises. In recent times, tobacco markets do not only target youths and consumers that patronise stores, they are now using POS marketing as an effective strategy to reach the socially disadvantaged. They do this by increasing the levels of point-of-sale tobacco advertisements in socially disadvantaged places than in educated places. Tobacco industries liaise with store owners as these owners now permit the advertisement of tobacco in their stores and POS terminals even though they are uninformed about the implications of the tobacco industry point-of-sale practices.

How do you pay? The role of incentives at the pointofsale, Arango, C. A., Huynh, K. P., & Sabetti, L. (2011). This paper studies the purchase behaviours of consumers in relation to their socioeconomic status and how their modes of payment attribute to this. The 2009 Bank of Canada survey on the preferred method of payment consumers use reveal that consumers’ payment choices can be use of cash, debit cards or credit cards at POS.  In the survey carried out using adult Canadians and their shopping habits, it was revealed that the use of cash is relatively low compared to POS. Cash are used for transactions with low costs. People use cards in most cases as this guarantees a good record keeping. The survey also estimates that there is reward elasticity associated with the use of credit or debit cards.

Do Point of Sale RFID‐Based Information Services Make a Difference? Analyzing Consumer Perceptions for Designing Smart Product Information Services in Retail …, Resatsch, F., Sandner, U., Leimeister, J. M., & Krcmar, H. (2008). Electronic Markets, 18(3), 216-231. This paper examines the impacts of POS RFID-Based information on the users’ need and consumers’ purchase habits. A RFID-Based information is one that uses Electromagnetic fields to identify and track specific information, this entails that the point of sale RFID information captures al data related to sales and purchase or transactions. However, in the analysis of consumer perceptions for designing smart product information services in retail business, this study identifies that an increase in RFID implementation gives room for development of smart product information applications. This paper further evaluates smart product information system and this resulted in the need to create a better approach to refine information system for RFID-based smart products.

Modernizing Retailing World at the Point of Sale, Loebbecke, C. (2004). MIS Quarterly Executive, 3(4). Unlike the electronic cash registers (ECRSs) to which little or no modifications can be done, the POS system is one that allows modifications as the world develops. This paper studies the modernization of retail world at the point of sale (POS). This means there are different amazing features of POS that give room for the advancement of retail world. So, a business with a point of sale has higher tendencies of developing than one without POS system. Point of sale iffer from the outdated cash registers because you can update and install new features or software components on your POS, this will in turn enhance the modernizing of retail world.


The relevance of origin information at the point of sale, Profeta, A., Balling, R., & Roosen, J. (2012). Food Quality and Preference, 26(1), 1-11. This paper examines the effects of a product’s country of origin (CO) on consumer purchase decisions. In a recent study by Liefeld (2004), the significant roles played the the consumers’ awareness of the origin of products are questioned. For instance, when purchasing dairy products, packaged meat, beer and other products, do consumers buy products because of where they are made, do consumers even pay attention to origin at all? Liefeld (2004) applied both knowledge test approach and Controlled Store Test (CST) to highlight real markets scenarios as to whether the origin information is relevant at the point of sale or otherwise.

The impact of point‐of‐sale data inaccuracy and inventory record data errors, Nachtmann, H., Waller, M. A., & Rieske, D. W. (2010). Journal of Business Logistics, 31(1), 149-158. This paper highlights the inaccuracies of POS data and the errors associated with inventory records, it also examines the effects of these errors on businesses. Whether mildly or severely, the presence or absence of inaccuracies of POS data records and inventory systems affect the performance of the retailers. The study examines how fill rate is affected by these inaccuracies. Fill rate is the amount of customer demand that is met through the available stock or inventory. The study shows that inventory errors have higher effects on fill rates than than demand (POS) errors.

Predicting customer shopping lists from pointofsale purchase data, Cumby, C., Fano, A., Ghani, R., & Krema, M. (2004, August). In Proceedings of the tenth ACM SIGKDD international conference on Knowledge discovery and data mining (pp. 402-409). ACM. This paper examines how customers shopping lists can be predicted from the purchase records or data on POS. This shopping list prediction has proven to have helped retailers know customers’ popular demands as they navigate the retail store. The history transaction data that is available on POS systems makes it possible for retailers to make predictions on what a specific customer is likely to buy at their next visit. If retailers are able to make accurate and precise predictions of a shopper’s list, it will enhance a robust interaction with individual customers.

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