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What Is An EPOS System And How Does It Work?

what-is-an-epos-system-and-how-does-it-work?

Is managing and tracking your staff sales, inventory changes, customer information, and more becoming increasingly difficult with a traditional till or cash register? What if you had one system to manage it all?

An EPOS system (electronic point of sale) puts the most important part of your day-to-day business operations at your fingertips. With the right combination of hardware and software, your team can deal with inventory management, customer relationships, generating reports, finalizing sales, and much more. 

All this sounds great, but you may still be asking yourself, what is an EPOS system? How does it work? And what are the benefits of using an EPOS system in retail? Let’s review these questions in detail and look at the types of EPOS systems available, plus how to choose the best system for your business.

What is an EPOS system?

An EPOS system combines point-of-sale software and hardware to make a till system. It allows you to speed up checkout processes, complete transactions, and keep on top of inventory from a single device.

EPOS software

EPOS software makes it easy to view sales anytime, anywhere. With the right product, you can easily update your inventory and take advantage of advanced sales reporting, increased security, and external product integrations.

Shopify POS hardware product image

EPOS hardware

EPOS hardware can be as simple as a card reader combined with a phone app to process orders and accept payments. For a more comprehensive solution, you might also choose to buy a barcode scanner, a Bluetooth receipt printer, or a cash drawer

EPOS payments

Cash, credit and debit cards, mobile payments, and online ordering can all be linked to your EPOS system. This makes EPOS payments a lot easier to track than traditional cash register payments. Your customers will be much happier with the range of payment possibilities too.

EPOS System vs POS System: are they the same?

Before you learn more about EPOS systems, let’s clear up any confusion there may be about EPOS systems and POS systems. Are they the same or different? 

A POS is the “point of sale” where purchases take place in your retail store. A POS system also involves software and hardware so you can accept payments in-store, track inventory, email receipts, and more. Like EPOS systems, a POS system also operates online. 

EPOS and POS systems are essentially the same, more advanced payment systems when compared to traditional cash registers or shop tills. 


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How does an EPOS system work?

Traditional cash registers and modern EPOS systems work in a similar way. You make a sale, process a payment, and the till records your transactions. But that’s where the similarities stop. An EPOS system is much more powerful and opens up many more possibilities.

An EPOS system enables you to accept in-person payments, track sales, and manage inventory without the hassle and potential inaccuracies of manual reporting. With accurate data at your fingertips, you can make better, more confident decisions about the future of your business.

EPOS software will show accurate and up-to-date pricing information. It’ll work out exactly what a customer has to pay, and once a transaction is made, stock levels will be instantly adjusted. This allows your team to process payments and respond to questions around stock etc. in a more efficient manner. 

The benefits of using an EPOS till system in retail

There’s a good reason more retail stores are moving toward using EPOS systems. They’re the future of retail, and standard cash tills or registers are a thing of the past. You’ve already seen some of the benefits, but let’s take a closer look.

1. Accept payments anywhere in your store

You’re in the Apple Store; you see the phone of your dreams, but you need a little more information. You talk to the nearest “genius” and they take away any niggling doubts. It’s time to pay. The associate takes out a card reader on the spot and you tap in your pin code. That’s it: the phone is yours to take with you.

Store staff with EPOS system in store

Transactions like that are possible because of EPOS systems.

EPOS and POS systems help streamline the customer experience and remove barriers for your store staff. 

Your EPOS system can easily integrate with mobile card readers, scanners, and receipt printers. Event managers and food vendors have been some of the earliest adopters of EPOS for this reason.

2. Make informed business decisions with powerful reporting

Once you’ve started making sales using an EPOS system, you’re going to want to know what’s working and what isn’t. EPOS systems create actionable reports so you can make informed business decisions. 

For a quick understanding, most systems have an overview of your entire business online and in-store. The best systems also offer retail sales reports, cash tracking, cash flow reports, product reports, discount reports, inventory reports, financial reports, and more. 

A typical retail sales report lets you see exactly how your sales are broken down. Which staff members are selling the most? Which locations are thriving? What time periods create the best opportunities for sales? What type of customer keeps returning?

3. Succeed at omnichannel selling

Where can your customers buy from you? How easy is it to buy online, for example, and pick up in-store? A good EPOS system makes it easy for customers to buy from anywhere and choose their preferred fulfillment option whether it be local pickup or delivery. 

Let’s take a closer look. A customer might see a product they love in your store and want to buy it, but you don’t have enough stock. Using an EPOS system, you can quickly check available inventory and send an item directly to your customer, with shipping calculated at checkout.

How about if someone has bought something online but they want to exchange it for something else in-store? As all your inventory is linked, you can quickly satisfy your customer’s needs. 

💡 PRO TIP: Offering in-store pickup as a delivery method at checkout is a great way to get more online shoppers to visit your store. To get started, enable local pickup availability in Shopify admin to show online shoppers whether a product is available for pickup at one of your stores.

4. Spend less time on admin with unified inventory and product management

You’ve just seen that smart inventory management means customers can easily exchange items, but what else can it do? Let’s start with forecasting demand. A good EPOS system will offer purchase order suggestions based on recent product performance or seasonality.

It’ll also tell you when stock is running low, based on vendor lead times and your current rate of sales. If certain products are regularly performing badly and taking up inventory storage space, your system will let you know. Your inventory counts will be accurate, as you process them with a barcode scanner. 

All of this ties into your product management.

With the right EPOS system, it’s easy to categorize products by type, seasonality, promotions, and more.

You can add variations to your products based on size, color, or materials, and keep track of multiple products in multiple stores, and online. 

5. Increase sales and customer satisfaction

Just as your sales associate is about to add a product to a sale, their EPOS software flashes up with a relevant upsell. It meets their customer’s needs and it adds revenue to their sale. Win-win. That’s just one of the ways that an EPOS increases sales and customer satisfaction. 

A good EPOS system allows you to automatically calculate taxes, depending on location, quickly apply discounts, and create email or SMS receipts. You’ll have more opportunities to build your customer lists for re-engagement, and you can quickly manage, save, and retrieve or email shopping carts.


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6. Improve customer loyalty

With the customer lists you’re building, you’ll have more opportunities to send marketing emails. You can use your EPOS system to make those emails more specific. Create customer profiles with every in-store or online purchase and keep on top of contact information, purchase history, shipping information, etc. 

You can use this information to reach out directly from your EPOS. Email, SMS, or call customers when there are relevant promotions. Reward them with loyalty discounts, and use filters to make sure you’re never spamming people with irrelevant content.

7. Integrate with other apps and tools

Think your customers might appreciate live chat? Connect your EPOS system to a live chat app to keep them happy. There are often great apps and tools that can be integrated with your EPOS system. Live chat is just one of them. 

You could also integrate an app dedicated to loyalty and rewards, or use a store pickup and delivery app to schedule click and collect pickup times, control local delivery zones, and set delivery rates.

📌 GET STARTED: With Shopify, it’s easy to customize your POS system and extend its capabilities. Find apps built by our trusted partners the Shopify App Store to help you do anything–from counting foot traffic, to launching a loyalty program and more.

8. Stay competitive with innovative payment technology 

With fintech on the rise, offering new and more flexible ways to pay is easier. And customers want to use their favorite payment methods. For some, it’ll be contactless payment; others will prefer Apple Pay or Google Pay. In certain situations, splitting the bill makes a customer’s life much easier. 

With the right EPOS, you can easily manage your cash flow. Accept all the popular payment methods and know exactly what the fees are for each one. Even if your customer wants to put down a deposit or pay with a gift card, you’ll know exactly where you stand. 

📌 GET STARTED: Shopify Payments is the fastest way to start accepting payments in-person, online, and on-the-go. It’s included in all Shopify POS plans, so you can skip lengthy third-party activations and go from setup to selling faster.

9. Streamline staff management

Your staff all have different roles and will in turn need access to different areas of your EPOS. Managers might need to make approvals. Warehouse staff might need to check on deliveries. It’s easy to manage permissions with the right EPOS.

You’ll also want to track performance, whether it’s in sales or another area of the business. You can use your EPOS to set up staff IDs and attribute sales, so you can provide commissions or kudos. 

💡 PRO TIP: With Shopify POS, you can assign different roles and permissions and set boundaries on what store staff can do in your POS system without manager approval—like changing a product’s price or applying a custom discount to a sale.

Types of EPOS systems

The popularity of EPOS systems is continuing to grow, as are the options available to retailers to host their software. Let’s take a look at three types of EPOS systems.

Traditional EPOS

Mainly targeted at larger retailers, the traditional EPOS is often an all-in-one solution that makes use of all connected hardware options. Traditional EPOS systems don’t rely as heavily on an internet connection, which makes them a good option for businesses that process a lot of transactions per day and rely on a strong connection for other things.

Mobile EPOS

Download the software to your smartphone, purchase a card reader, and you’re all set. Mobile EPOS systems are perfect for small businesses that sell on the go. They can be linked to mobile card readers and printers if needed and can perform many of the tasks a traditional EPOS can. 

Tablet EPOS

Tablet EPOS works in a similar way to mobile EPOS. The main difference is that tablets have more processing power, so they are the better option if your business is starting to process a larger number of transactions. 

How to choose the best EPOS system for your retail business

With so many options and EPOS types to choose from, you’ll need to consider which EPOS system is the best for your retail business. 

Current and future needs

Let’s start with where you are. Think about your current business activities and what you need your EPOS system to do. If you have an ecommerce website, you’ll want to make sure your new EPOS integrates seamlessly with it. 

Consider the challenges you’re facing with your current EPOS if you have one. It’s important to invest in a system that solves those challenges, so work out exactly what you need your new EPOS to do. Start with why you’re switching and go from there.

Now, let’s look at where you want to be. Your projected growth is going to hugely impact your needs. You might not need certain features today, but you will rely on them in five to 10 years.

Buy something that you can easily upgrade and continue using in the future. 

Managing your inventory, keeping track of sales, payment options, integrated payment processing, loyalty programs, mobility, staff tracking, and fulfillment options are a few of the areas to examine. Will you need add-ons, apps, and tools to make your EPOS work the way you want it to?


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Pricing and available features

As with any area of business, EPOS pricing isn’t just about the price, it’s also about value. You’ll have a budget, and the EPOS system you choose will need to fit within it, but there are several factors to think about when it comes to pricing. 

Software fees

Whether monthly or yearly, there’s usually a software fee that varies depending on the plan you choose. Opt for a plan with more features and you’ll pay a higher monthly fee, but those features might also save you money or help you bring in more revenue over time. 

Remember, with software, there are more opportunities to upgrade later if you have the right hardware to support your future needs. You might need a basic plan to cover the retail store you’re running today but you’ll want to upgrade to a higher tier plan when you expand into a bigger storefront or more locations.

Hardware investment

The hardware you buy will depend on your needs. Costs will vary by the number of stores and staff you have, and the payment types you want to accept. Upgrading hardware can be costly. One option to mitigate that risk is leasing hardware at the start of your business endeavor. 

Payment processing fees

Every time you make a transaction, your payment card processor charges a fee. Depending on the card processor you use and the card your customer uses, the amount you pay can vary. 

Some of the best EPOS providers offer integrated payment processing. This takes away the risk of hidden costs. You’ll pay the same rate for all cards so you can plan your cash flow better. You could choose a cheaper EPOS system without integrated payment processing—but be careful, as it could end up being a lot more expensive later on. 

💡 PRO TIP: Shopify Payments is included in all Shopify POS plans, no sign up or setup fees required. Control your cash flow better and pay the same pre-negotiated rate for all credit cards, starting at 2.4% + $0.00.

Available features

You’ve considered your short- and long-term needs, so it’s important to find an EPOS system that has the features to overcome the challenges you face and that guides you toward your goals. 

There might be cheaper EPOS systems out there that only offer basic reporting, limit order fulfillment options, and don’t include any inventory management features.

Ask yourself how cheap they really are. If they match your needs, that’s great; but if not, what will you have to spend on add-ons, upgrades, or unintegrated systems down the line?

Ease of use

Features that match your needs are great if your staff can use them. When you’re choosing the best EPOS system for your business, make sure it’s easy to set up and use. The right staff will have the retail skills needed to learn and adapt to new technology, but there are limits to everyone’s skill set. If you need a software developer or an IT guru to get your EPOS system working, you might have chosen the wrong one.

Another question to ask yourself is “does this EPOS allow for mobility?” It used to be the case that EPOS systems were tethered to a checkout counter, but nowadays, many systems are mobile and let you sell wherever your customers are. 

You’ve already seen some of the benefits of increased mobility, but it’s also important to analyze the importance for your store and your customers. Whether you choose something mobile that allows you to meet your customers where they are or something static, it’s important that it fits in with the aesthetics of your store—so buy something that looks great!

Get started with your retail EPOS system 

You’ve just enhanced your understanding of what an EPOS system is, how it works, the benefits of the right EPOS, the types of EPOS available, and how to choose the best EPOS system for your business. You’re ready to make the next step in your business growth so it’s time to get started with your retail EPOS system.

Start taking in-person payments instantly

Shopify Payments is included in all Shopify POS plans, no sign up or setup fees required. Skip lengthy third-party activations, accept all popular payment methods, receive payouts faster, and manage your brand’s finances from Shopify.

This originally appeared on the Shopify Retail Blog and is made available here to cast a wider net of discovery.

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