The Hidden Cost of POS – Adaption Costs

There is no such thing as a free lunch, and there is no such thing as a “free” POS system. Yet, the misconceptions persist. Any business owner with half a mind knows price is less important than value, that anyone offering us something for free is making the money back somewhere, and that you get what you pay for. So how will choosing a “free” POS system affect your business long term?

POS Financing Offers

What is often marketed as a “free” POS system is really a financing offer. There is no or very little up-front cost for the system, but interest on it will accumulate over time. The POS payment is often bundled in to your credit card processing fees. More rarely, it can be in the form of a monthly fee.

What should you do if you’re being offered a free POS system? The first question you should ask is about credit card processing fees. Are you locked into these with the provider? If so, for how long? It’s quite likely that you will be, and the fees could be much higher than other credit card options due to the fact that the POS system cost is included.

Shop Around

It pays to shop around for merchant services if a company is offering a “free” system. Compare competitors’ transaction fees to theirs and then do the math. What’s the cost difference over time between using their services instead of other providers’ ones?

Financing is what “free” POS providers are really offering you. Newly founded companies that have already made a lot of big cash outlays will find financing the POS investment to be a great option. Notwithstanding that fact, you need to know what you’re getting. You can make a better decision once you realize that the POS system is financed, not free. You can choose the best, most valuable financing option. A leasing company, competitive POS provider, or bank will probably have low cost financing options to offer as interest rates are low right now.


Hidden costs go above and beyond those mentioned. One major hidden cost is training. Does the provider offer it? How much does it cost? Will you be responsible for it?


Does the price include installation? Don’t assume it does. Without installation, the POS is no good to you. It wouldn’t be very pleasant to get stuck with a system that you need to install all on your own – either that or pay someone hundreds to do it!

Caller ID

Taking calls and knowing who’s calling are very useful features for establishments in the hospitality industry. A POS system calls up the customer record and identifies your caller. You spend less time clicking and typing while trying to talk to them and don’t have to put them on hold as you search through records. Caller ID info on a computer is collected through an integrated modem.

Most people have a problem with caller ID in that it’s hard to program the modem to work with virtually all “regular” PCs, so many developers program a solution for only modem type or brand. Then, this is the only type of modem you can get.

For some developers, it’s challenging to even program the feature to work for one specific type of modem. Then, they copy the programs in a third party company. Only this company sells a product that works for one single type of modem. These modems are unique and costly – in fact, they can cost up to ten times as much as a regular modem.

POS caller ID modems are not only expensive, but also aesthetically unappealing. Look for POS software that integrates with all built-in and standard PC modems if caller ID is important to you.

Text Messages

If you choose a POS system with text messages, you’ll probably be using these often. They can be extremely helpful, especially to owners of salons, diners, and similar establishments. You can remind you customers about appointments at your salon or let them know your bar has launched happy hour at a given time. You can send info about discounts and promotions. We can’t deny how big SMS marketing has become.

You’re probably paying hidden costs if your POS software has an SMS service feature that just integrates to the SMS service of another company because that means the developers are not programming their own device to send text messages. They are using another company’s service instead. You will be paying for every single SMS your POS system could ever send.

Other Aspects of Hidden Costs

There are two ultimate aspects of hidden retail POS system Costs: cheap systems bringing a limited choice of features and understanding what you need to begin with and thus choosing accordingly. Hidden hardware costs tend to come when a company doesn’t understand the full practicalities of how the POS system will work in their specific situation.

We recommend asking for a demo of POS systems once you’ve narrowed your options down to a few. This will mean that you can turn attention to issues early on. Moreover, you will know how to make the most out of your new POS system. You might find that you need a keyboard, more scanners, and so on.

Hidden Costs of Cheap Systems

In general, cheaper systems are not very likely to include everything you will need from the system. Low-budget POS systems will definitely be more limited in terms of features. To get the most out of a POS system, you need to have the ability to customize elements of it to work for your business complexly. This is particularly important.

Final Thoughts

Once you know the hidden costs, you may find a more robust POS hardware that offers better functionality, better reliability, and comes with better support and training costs about the same as the supposedly “free” POS you were being offered. Then, it’s time to take the implicit costs of going for the “free” option into account.

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