By: Sebastian Rankin
Open a Retail Store
Published on: August 13, 2023
Reading time: 14 minutes
Introduction
By now, you may be familiar with what a Point of Sale (POS) system is. For most retail businesses today, a POS system enables you to manage store inventory and staff, process customer checkouts, accept payments, and direct that money into your bank account. It is the control center of your retail store.
But the features of POS systems vary from provider to provider – as do the costs of POS systems. How much do POS systems and hardware cost? What about software? Are there payment processing fees?
Shopping for a POS system can feel overwhelming. With hidden costs, setup fees, and unclear pricing, it’s not always easy to know exactly what you’re signing up for.
POS systems come with fixed and variable costs, and the pricing will vary depending on your service provider, type of business, number of locations and staff you have, and the features you need.
Before you decide which POS system is right for you, let’s explore the factors influencing the cost of POS systems.
How Much Does a POS System Cost? The Three Biggest Factors Affecting POS System Costs
The cost of your POS system will depend on how much you need to spend on the following three factors:
1. Software
When shopping for POS software, make sure it includes the built-in features you need to run your business, such as inventory management, reporting and analytics, and integration with your eCommerce platform.
POS software often comes with monthly or annual fees, along with different subscription tiers at varying prices. More expensive software plans typically come with more advanced features.
For example, an eCommerce merchant on the basic Shopify plan gets the Shopify POS software for free – included in their plan ($39 per month or $29 per month with annual billing), providing them with the tools they need for sporadic in-person sales at temporary stores or kiosks at events.
Alternatively, merchants with permanent brick-and-mortar locations who need more advanced features, such as reporting and analytics or greater control over employee and user permissions, can subscribe to Shopify POS Pro for $89 per month (or $79 per month when billed annually) per store location.
2. Hardware
You can buy, rent, or lease POS hardware, depending on your needs. For example, if you want to set up a temporary store, you can rent POS hardware from Shopify to accept payments, without investing in hardware you don’t want to keep. However, the hardware you need depends on your store setup.
Point of Sale Hardware
Your first decision is whether you want to stick with a traditional POS system or a mobile POS (mPOS) system that can be installed on a tablet or a smartphone running iOS or Android. Mobile POS systems take up less counter space than traditional POS systems and can be moved around the store to serve customers wherever they are. They may also include mPOS packages providing a tablet screen to face the customers (known as a customer-facing display).
Or you can choose a comprehensive POS system like Shopify POS Go for quick and easy in-store transactions using an integrated POS device. POS Go comes with a built-in barcode scanner and card reader, so you won’t need any additional hardware.
Drawer
Cash and Card Reader
Despite the prevalence of wireless payment methods, 61% of payments in retail stores are still made in cash. You may want to invest in a cash drawer, as well as a credit card reader that accepts payments by tapping, swiping, and entering a PIN. This ensures you accept all types of payments and always complete a sale.
With Shopify, cash drawers cost between $139 and $159, and Shopify card readers cost $39 or $49, depending on the model you choose.
Receipt Printer
According to a survey by Green America, 89% of American consumers want merchants to provide printed receipts and digital receipts sent via email. Given this, you may want to purchase a receipt printer and printing paper. This way, you can provide shoppers with the proof of purchase they prefer.
Depending on whether you want a Bluetooth, Wi-Fi, or wired receipt printer, it can cost between $289 and $399.
Barcode Scanner
You may also want to consider purchasing a barcode scanner. This helps you register your customers, count inventory, and so forth. However, if you want a simple setup, Shopify POS turns your tablet or smartphone’s camera into a barcode scanner, eliminating the need to buy another device (just grant it access to your device’s camera).
Depending on whether you choose a 1D or 2D barcode scanner, it will cost between $229 and $329.
3. Payments
In addition to the costs of POS hardware and software, you also need to allocate a budget for credit card processing fees. Some POS systems come with integrated payment processing, while others require you to manage separate contracts, fees, and payments with a third-party provider.
Choosing a POS system with integrated payment processing simplifies your monthly costs, enhances the customer experience, speeds up transactions, and reduces errors in your reporting due to human mistakes. Integrated payments also mean you will spend less time reconciling shipments.
On the other hand, when you partner with a third party to handle payment processing, you’ll have to manually reconcile the payments accepted from your card reader with your POS system, which may take longer to receive payments.
Before choosing a payment processor, make sure you understand what you are signing up for. Be wary of any long-term commitments or monthly fees. Also, ensure the processor’s pricing for transactions is clear and straightforward.
Payment Transaction Fees
Payment transaction fees are a percentage, flat fee, or mixed fee charged by a payment gateway provider to process the transaction. Some payment service providers may vary transaction fees based on the payment method used by the customer, while others charge a flat rate.
We recommend choosing among flat rates. They are predictable and easier to plan around. Flat rates also provide peace of mind in accepting all payment methods without risking any surprises in the next payout – regardless of your sales volume.
Transaction Volume
The amount you pay each month in transaction fees depends on the number of orders you process at your POS.
What is the Cost of a Shopify POS System?
On average, the initial cost of a POS system ranges from $0 to $2000. This includes hardware, software, and installation fees. Then, depending on your business size, number of retail locations, add-ons, and sales volume, you could pay around $500 to $1000 annually to use the POS system.
Costs vary
Pricing varies from one point of sale provider to another. Some offer free subscriptions, while others provide paid subscriptions with more advanced features or custom pricing based on the business. If a point of sale provider offers integrated payment processing, they may also charge a fee per transaction.
A quick look at the costs of a Shopify point of sale system
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The three biggest factors that affect the cost of a point of sale system
The cost of your point of sale system will vary depending on how much you need to spend on the following three factors:
1. Software
When shopping for point of sale software, ensure it has the built-in features you need to run your business, such as inventory management, reporting and analytics, and integration with your e-commerce platform.
Point of sale software often includes monthly or annual fees, along with different subscription tiers at varying prices. More expensive software plans generally come with more advanced features.
For example, an e-commerce merchant on the basic Shopify plan gets the Shopify POS software for free – it’s included in their plan ($39/month or $29/month for annual billing) and provides them with the tools they need for intermittent in-person sales at pop-up stores or kiosks at events.
On the other hand, merchants with permanent brick-and-mortar stores who need more advanced features, such as reporting and analytics or greater control over staff and user permissions, can subscribe to Shopify POS Pro for $89/month (or $79/month when billed annually) per store location.
2. Hardware
You can purchase, rent, or lease point of sale hardware, depending on your needs. For instance, if you want to open a pop-up store, you can rent point of sale hardware from Shopify to accept payments without investing in hardware you don’t want to keep. However, the hardware you need depends on your store setup.
Point of sale hardware
Your first decision is whether you want to stick with a traditional point of sale system or a mobile point of sale (mPOS) system that can be installed on a tablet or smartphone running iOS or Android. Mobile point of sale systems take up less countertop space than traditional point of sale systems and can be moved around the store to serve customers wherever they are. They may also include mobile point of sale accessories that provide a customer-facing display screen (known as a customer-facing display).
Alternatively, you can choose an all-in-one point of sale system like Shopify POS Go to process transactions in-store quickly and easily using an integrated point of sale device. POS Go comes with a built-in barcode scanner and card reader, so you won’t need any additional hardware.
Cash drawer and card reader
Despite the prevalence of cashless payment methods, 61% of payments in retail stores are still made in cash. You may want to invest in a cash drawer, as well as a credit card reader that accepts payments via tap, swipe, and PIN entry. This ensures you can accept all types of payments and close sales every time.
With Shopify, a cash drawer costs between $139 and $159, and Shopify card readers cost $39 or $49, depending on the model you choose.
Printer
Receipts
According to a survey conducted by Green America, 89% of American consumers want merchants to provide printed receipts and digital receipts sent via email. Given this, you may want to purchase a receipt printer and printing paper. This way, you can provide shoppers with the proof of purchase they prefer.
Depending on whether you want a Bluetooth, Wi-Fi, or wired receipt printer, it can cost between $289 and $399.
Barcode Scanner
You may also want to consider purchasing a barcode scanner. This helps you register your customers, count inventory, and so forth. However, if you’re looking for a simple setup, Shopify POS turns your tablet or smartphone camera into a barcode scanner and saves you the need to purchase another device (just grant it access to your device’s camera).
Depending on whether you choose a 1D or 2D barcode scanner, it will cost between $229 and $329.
3. Payments
In addition to the costs of POS hardware and software, you also need to budget for credit card processing fees. Some POS systems come with integrated payment processing, while others require you to manage separate contracts, fees, and payments with a third-party service provider.
Choosing a POS system with integrated payment processing simplifies your monthly costs, enhances the customer experience, speeds up checkout, and reduces errors in your reports due to human mistakes. Integrated payments also mean you will spend less time reconciling shipments.
Conversely, when you partner with a third party to handle payment processing, you will have to manually reconcile the payments accepted from your card reader with your POS system, and it may take longer to receive payments.
Before choosing a payment processor, make sure you understand what you are signing up for. Be wary of any long-term commitments or monthly fees. Also, ensure that the processor’s pricing for transactions is clear and straightforward.
What to Consider Before Buying a POS System?
In addition to knowing the cost of a POS system and its features, there are other things you should take into account when selecting a POS provider. Contract Length
Most POS systems come with monthly plans or annual contracts. Monthly plans are flexible and give merchants more control, while annual plans may bind you to a legally binding agreement that is non-refundable and cannot be canceled unless you pay a termination fee. Be sure to read the fine print in your agreement and know what you are signing up for!
In-Person and Online Sales
Shoppers are not just shopping online or in-store. They are shopping using a mix of channels. Brick-and-mortar merchants that unify the shopping experience across online and other channels can build better relationships with customers and unlock growth that single-channel merchants cannot achieve.
Often, when a merchant uses two systems to manage online and in-store sales, transaction, inventory, and customer data become siloed by channel, and their reports do not reflect the truth. If someone buys a product in-store, does that transaction data flow into your sales reports? Do inventory levels adjust in real-time with the sale and return and exchange of products online and in-store?
Some POS systems allow integration of your POS system and e-commerce platform using an integration partner. Unfortunately, these integrations do not fully unify your channels. After all, they are still two different systems with different features, built by different companies.
But
With Shopify, you can start, market, manage, and grow your business everywhere your customers are, all from the same powerful platform.
Quickly launch a beautiful brand website using user-friendly templates and themes. Boost traffic and increase sales with the best online checkout process. Sell globally with just a few clicks. Unite your sales channels: social media, your online store, online marketplaces, retail stores, and more. Offer fulfillment options such as in-store pickup at checkout. Enhance your marketing with customer profiles that combine online and in-store purchase history. Manage your store’s inventory and warehouse in one place. Make informed decisions using reports that unify data from your website and point of sale system.
Businesses that use Shopify to unify their in-store and online sales grow by 30% annually.
Cost of Shopify POS System
You may be wondering about the cost of the Shopify POS system. We offer two POS plans: Shopify POS Lite and Shopify POS Pro.
Shopify POS Lite
Shopify POS Lite is included with all Shopify plans and is ideal for sales on the go and opening temporary stores like pop-up shops. Shopify plans start at $39 per month. If you are already selling online using Shopify, you can start using Shopify POS Lite for in-person sales immediately, at no additional cost.
Shopify POS Pro
Shopify POS Pro is an additional subscription costing $89 per month that unlocks additional features for your POS system. If you have a retail business with multiple locations, multiple layers of staff, a large product catalog, or high sales volume, you may want to upgrade to POS Pro. The advanced subscription provides faster workflows for inventory management and payment, more control over staff permissions and access, and deeper reporting and analytics for your business.
Shopping for POS Systems: The Best Value for Your Money
A POS system is the control center of your retail store, and there are many factors that determine its cost. After reading this article, we hope you have a rough estimate of the cost of a POS system, but these numbers will vary from one POS provider to another. We encourage you to research your options to find a POS that has everything you need and fits your budget.
Additional research and content by Alexis Damen.
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Source: https://www.shopify.com/retail/pos-system-cost
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