Restaurant Owner's Guide to POS System

Download PDF

There is one piece of equipment in the restaurant that you will touch more than anything else, even plates! It’s the restaurant’s point of sale system. The POS a critical tool that will either help make your restaurant profitable or break the bank with excess fees. This guide will help you avoid the expensive mistakes that others have made. If you want the most reliable, most affordable and fully featured POS system on the market this in depth report will give you the means to find the best POS system that’s right for your restaurant.

What is a POS?

Strictly speaking, a point of sale is where your customers go to pay. It's where your staff "rings up" orders. Let's not kid ourselves; a POS system is basically a fancy cash register.

Although the concept of a POS starts with the first cash register, the truth is that the point of sale has evolved with every generation of technology.

pos stand

The History of Point of Sale Systems

The history of electronic POS systems really starts when digital calculators became small enough to fit on a desk, the first digital cash registers hit the scene, but it wasn't until the PC revolution that the POS started to come into it's currently recognised form.These old systems, were expensive, bulky, and did we mention expensive?

But they added amazing features that no one had seen at the time, including automated record keeping and credit card processing.Using proprietary technology in an era where only specialists knew how to work on computers the POS systems of the 70's and 80's were initially only available to those business owners who could afford to spend 100k on a system.

legacy pos systems

Not only that, they were complex systems serviced by a team of highly paid specialists.In the 90's and 200's computer hardware became cheaper and added more features, like CRM, card readers and bright colorful touch-screens. But even though the technology was improving, the attitude of POS companies didn't change. They knew they had you stuck.

And when these legacy systems went down, it was for hours if not days! Waiting on hold for support, waiting on parts to be delivered, waiting for a tech to come on site.

Once a restaurant owner signed that 30, 40, or 60 thousand dollar contract it was a ten year or more commitment. Trapped in an endless cycle of paying off a system just as it breaks or falls out of service!The only solution at the time was to give the POS company their next pound of flesh.The really unfortunate thing is that many restaurant owners are still stuck using legacy systems based on 20-year-old technology. But there is a way out!

More information on the history of POS systems:

Tablet-Based: The Evolved POS

When the iPhone came out in 2007, it was quickly followed by the iPad in 2010. Folks didn't quite realize yet how these devices would change the world and how we interact with technology.One thing was certain; computers were now a heck of a lot smaller! Computing power better than what was found in high-end desktop computers only a couple years ago is now available in your pocket. And at an incredibly affordable price.

Is it any wonder then that touch screen tablet POS systems have become the new standard for restaurants and other merchants?

With Apple's commitment to cutting edge technology, reliable hardware and high standards, it's no mystery why the best tablet based POS systems are running on iPads.Enhanced wireless connectivity, network stability and off-the-shelf accessory compatibility means the modern restaurateur has access to a high quality, affordable POS system that is feature rich and capable of much more than what an historical POS is capable of.

server with tablet

Modern POS System Features

A modern iPad-based POS system has many important features. And the best POS tablets offer even more, continually updating their capabilities and adding new tools to improve life for restaurant owners, managers and employees.

Inventory Management
Tracking inventory helps you know when and how much to buy. The best POS will automatically remove items from the menu when they sell out and will even track ingredient inventory. Tracking ingredient costs is an important data-point when doing deep menu engineering.

Sales Analytics
Knowing your restaurant numbers is as much about sales data as anything else. Your sales dictate day to day operations. How do you know your peak hours? Seasonality? Top selling items? How do you track the ROI of your marketing investments or know if your staff is hitting targets for up-sales?

You find the answers in POS sales analytics. Every sale is tracked, logged and assigned to a server, so you know exactly what's going on; when and how much.

financial documents

A point of sale with customer relationship management tools saves personal data about your customers and tracks your guest's purchases. CRM allows you to market from an internal list that provides you with specific personal information about your target customer's needs and preferences.

POS CRM tools help you save money on your marketing costs by giving you market research data, a lead list based on your existing customer base, personal information about their food choices, and how frequently they dine out.

gift cards

Gift Cards
An iPad POS that can take gift card payments is a huge benefit to your restaurant business. Restaurant gift cards are the number one type of gift card purchased, followed by retail gift cards. Most gift cards purchased are between $20-$50. When spending a gift card, almost 70% of people will spend nearly an additional 40% more than the card’s value.

When someone returns on a $50 gift card you can expect a $70 bill! You definitely don’t want to miss that opportunity. The best iPad POS gift card systems allow you to issue and manage gift cards. And gift card payments are seamlessly integrated into the POS’s payment screen.

The initialism for the current credit card processor's security and technology standard. EMV is more commonly understood as the advanced chip-card system that has been introduced to help combat credit card fraud. A modern iPad POS supports EMV and will give you options regarding compatible chip card readers; Including compatibility with wireless Bluetooth EMV card readers.

Keep in mind that without an EMV compliant payment system in place, your restaurant is liable for any fraud and chargebacks related to noncompliance with EMV standards.

NFC Payments (Mobile Pay)
The initialism for the current credit card processor's security and technology standard. EMV is more commonly understood as the advanced chip-card system that has been introduced to help combat credit card fraud. A modern iPad POS supports EMV and will give you options regarding compatible chip card readers; Including compatibility with wireless Bluetooth EMV card readers.

There are also plastic contactless payment enabled credit cards that have embedded NFC chips in them as well. Advanced iPad POS systems will provide your guests with contactless payment options for both mobile-pay and NFC payments using a secure contactless card reader. The universal contactless card symbol appears on compatible devices:

person on phone

Employee Time Clock
Keeping a close watch on labor costs is critical for restaurant owners and managers. A built in employee time card system recording punches helps you see your labor costs relative to sales income throughout the day. The best iPad POS with labor tracking features will also keep a secure digital record of punches in the cloud that includes a picture of the employee for verification.

This record proves compliance with state law and helps managers enforce restaurant policies. You can export time clock reports to your payroll service without the labor and error potential of translating from a separate record.

Easy to Use Interface
It's no secret that iPads are easy to use! A POS system with a touch screen is natural to use. The screen of the iPad is bright, clear and accurately responsive to touch. Ordering is easy when the text is clear, easy to read and everything is just a tap away.

The most advanced iPad POS system will have easy to navigate menus. And also take full advantage of the high-resolution iPad Retina screen, letting you put images on the menu, so there is no hunting around.

Change Menus and Prices Easily - An important part of an easy to use iPad POS system for restaurants is running custom promotions and changing the menu. When it’s easy to change the menu, you can test ideas and create unique draws for customers during slow times.

The best iPad EPOS systems have tools to create automated happy hours and timed promotions. This simplifies and speeds up the ordering process because prices update seamlessly based on the period.

What to consider when choosing a POS

A modern iPad-based POS system has many important features. And the best POS tablets offer even more, continually updating their capabilities and adding new tools to improve life for restaurant owners, managers and employees.

talking on phone

The Core Values
One of the most important things to determine is if this is the POS company you want to be in business with. Are they a software company marketing a POS to restaurants or a Restaurant company that has designed a POS for restaurants?

When you call the support line after dinner service (because you finally have time) are you put in a queue or do you speak to a live person? You should always call support and ask questions before you spend a dime or sign a contract.

Find out who you're really dealing with. Call at 7AM and at midnight, throw them some curveballs to see how they do. If they can't handle your questions now, how secure are you going to feel if you're in the middle of service and you need help?

The reputation of POS companies among restaurant owners is to change the tone of their interaction from friendly to hard to get after the papers are signed. Once they have your money, are you sure you can still depend on them?

Ask their service agents what their core values are and see if they can answer. You work every day to serve your customers, don't you think your POS company should do the same?

Costs of Doing Business
It's important to know the true costs of going with a particular point of sale manufacturer. This may not be clear up front so it will take diligence to determine what the short term and long term costs will be.

Not just knowing the cost of one platform, but also the costs of other systems will take time and research, but this is a choice with the potential to create significant long term impact on your restaurant. The restaurant POS is the technological backbone of your operation.

It's where orders are placed; it's how the kitchen knows what to make and when it's where your guests go to pay. If any of these functions aren't accomplished smoothly, there is a potential for thousands of dollars in losses to the business.

Perform a cost benefit analysis, weighing the value of POS features against the costs and give everything a dollar value. Don’t forget to weigh peace of mind, reliability quality of support and reputation for integrity along with the specific features of the product. Do this for each of the systems you are auditioning.

This helps keep you from feeling too invested in one system. It’s not uncommon for people with limited time to “go with their gut”, but this is a choice that could really cost you when you see what some POS companies are charging.

Not just knowing the cost of one platform, but also the costs of other systems will take time and research, but this is a choice with the potential to create significant long term impact on your restaurant.

server with tablet

However, if you do happen to find a feature-rich, fully functional POS that is incredibly affordable with no hidden costs - an easy to use system designed for restaurants, by a reliable restaurant POS company, well, the truth is there is not much risk in that, and your time is valuable!

Choosing the Best POS App

Do you like the way it looks? Take time to use the app before you buy. You will be looking at this screen for a long time. Do you find the colors pleasing and easy on the eyes? A cutting edge iPad POS should have a professional, clean and modern style that looks like it belongs in your restaurant.

Does it work well and do you like the way it functions? When you perform day-to-day tasks do you just seem to “get” it? If you didn’t know how to do something like drawer audits, and modifying orders, do you think you could figure it out by guessing?

Or if you tap on the wrong thing will it cause all sorts of problems or cause you to lose work? Does it make sense at an intuitive level? In the fast paced restaurant environment you don’t have time for a complicated system!

Is it a feature rich restaurant epos solution? Choose a tablet-based POS app that gives you have access to in depth reporting tools. Do you see key metrics and important data that you use every day? Use the iPad POS app and make sure each of the tasks you need can be performed.


Ask the company about the plans for future development. Will new features be added to keep up with the times? You want to choose the POS system with the most bang for your buck!

Is the POS software reliable? If you experience crashes, glitches and bugs imagine how that's going to affect service! Can you see yourself losing money due to technical issues? Do orders or payments get "lost in the system"? Do charges come up wrong?

Does it lag or hang when processing an order? On the other hand, a reliable POS seems swift, stable, snappy and well designed. When taking orders all day, think about how important that reliability is!

Is it an easy to configure POS system? Some POS systems are either too complicated to configure yourself, or the company won't allow it. You can expect to pay extra for these services. An easy to configure POS system is important because you can design specials, promotions and revolving menus that adapt to your changing needs.

Other POS apps may have a limit on the number of menu items you can add before you’re charged an additional fee. Are the tools for configuring the menu easy to use and manage? Tweaking the menu shouldn’t be a chore, but some POS software sure makes it one. What’s worse, with some point of sale software you could even end up corrupting your data and have to start over!

The Most Affordable POS Solution for Restaurants

restaurant employees

Payment processing fees are another place where additional costs are hidden. You can be quoted a percentage, but is that really what you'll be paying when you add in additional access and gateway fees?

When you are opening a restaurant, and you have lots of startup costs, it's critical to choose the most affordable point of sale for your new business. Money not going toward buying assets are cash-eaters and show as losses in your financial documents.

When you're evaluating the affordability of a new tablet POS, consider the upfront and ongoing costs. Will the POS service provide staff training or is there an additional fee for that?Many POS companies will make you sign an expensive, long term service contract or they will charge you an exorbitant per-incident fee for support.

Are you sure that the monthly fees are reasonable and there isn't more to it? Find out how much it's going to cost you to expand your menu, add terminals or add additional features. You may find that they bait you with an entry level system that seems affordable at first but puts you on the hook later for much more.

Payment processing fees are another place where additional costs are hidden. You can be quoted a percentage, but is that really what you'll be paying when you add in additional access and gateway fees? If the card readers are free, you're probably going to pay through the nose for service. Calculate the ROI for yourself. In the long run, buying a card reader and paying the lowest payment transaction fees will always save you money.

Affordable POS Hardware
On the topic of affordability, it’s important to consider the hardware costs. Another dirty trick that many POS manufacturers will pull is to sell you proprietary or outdated hardware that is specially configured to work with their system. They know that by making it harder for you to switch, they will hold you captive.

The best restaurant POS app will make it easy to setup and configure hardware. In fact, it should be plug and play! The POS should find printers and accessories easily, with a minimum of settings. A trick to finding out how hard it is to set up is to search for the instruction manual. If something like running a printer has complicated steps, imagine how bad is the rest of it is!

Another aspect of this is making it hard for you to replace equipment yourself if it goes down. Switching out a printer? You may need to buy it from them, and maybe even have their techs install it! Do you have the time, the money or the patience for that? The most affordable POS system for restaurants will take advantage of off-the-shelf accessories and printers that are reliable and reasonably priced.

iPad-based POS systems are more widely compatible and supported because Apple's iPad line of tablets is a well-tested platform produced by one world-class manufacturer - Unlike the "wild west" of Android tablets, which are all over the map. By choosing an iPad POS app you know you won't have to deal with unreliable and untested equipment.

Are iPad POS Systems Secure?

With so much cash handling, sensitive credit card data and private customer information passing through, you want a secure restaurant POS system that you can count on.

Employee Accountability
Unfortunately, employee theft is a restaurant reality that we all have to deal with at one point or another. Increasing accountability is the best way to deter the temptation employees face, to rip you off.

Accountability implementations you should look for in a secure POS start with secure secret PIN numbers issued to all users of the system. Also, the ability to pull per-user drawer reports, sales reports and transaction data so that you can see exactly what each of the terminal’s users have been up to.

EMV Compatible
Magnetic swipes have been the standard for a very long time, but it’s important to understand that the newer chip card systems aren’t just fancy tech, they are designed to combat fraud. More importantly, you should understand that a POS system without EMV security implementation puts you at risk for transaction liability, reversal of charges and costs associated with loss from fraud! Choose a secure restaurant POS system that features affordable EMV chip-card readers.

PCI Compliant
Every merchant that takes credit card payments must be compliant with the PCI data security standards. Failure to comply puts you at risk of fines and fees from the credit card companies or losing the privilege of processing credit payments all together! PCI compliance is no joke, and PCI standards are always being updated.

Unless your POS app is up to date with the latest standards, it's you, not the POS company that is held liable by the credit card companies! Choose a POS system from a service provider that can answer questions about PCI, so you know that they are knowledgeable about PCI DSS compliance and data security standards required by the credit card companies.

Systems that store customer payment information or upload it to a server complicate your PCI compliance requirements and add costs in the form of outside consultants and security auditors. That’s a hidden cost of an insecure POS system that you need to be aware of.

Point to Point Encryption
If you're wondering if an iPad POS system is secure enough for payment processing the answer is to look for a solution that uses P2PE (point to point encryption). To save time, money and headaches, you need to avoid the liability associated with storing customer payment information.

This is done through secure, multi-phase encryption that scrambles card data the moment it's being read. This means that the payment data is never stored on the iPad and the customer's sensitive information can not be accessed because it was never there! Choose a POS that has a secure P2PE payment solution.

Choosing a POS for your restaurant is one of the most important decisions as a restaurant owner or manager. Depending on the hardware, the software, the security and the POS service provider, your point of sale can either be a blessing that provides you with never-ending benefits or a source of never-ending headaches. In this guide, we have covered the important aspects to help you make the right decision about which POS system to choose.

Restaurant POS
Starting a Restaurant

Restaurant Management Library

Articles and training tips to help improve your restaurant's specific needs.