Guest Column | August 28, 2013

Compete Against "Free" POS: Here's How

By Andrew Harris, affiliate manager, ShopKeep POS 

Although most of us understand that nothing is life is free, the appeal of something for nothing is a tempting proposition in any environment. A “free” point of sale (POS) system is especially enticing to new business owners, all of whom face a long list of other expenses, fierce competition, and uncertain odds of success. Of course, there’s always a catch to free POS, but underscoring this reality is no easy feat against the captivating powers of the word “free.”  It’s up to VARs and other vested parties to make merchants fully aware of the trade-offs involved and advise them of suitable alternatives. Arm yourself with these insights to counter the allure of free POS!

Explain The Actual Costs

Dispelling the notion that one can get a POS system without paying is the logical first task. Popular free POS systems actually charge fees for service and support, software upgrade fees, and account maintenance. These fees can add up to over $1,000 in annual costs or almost $6,000 over the life of the five-year contract. While this total compares favorably against the conventional POS heavyweights, it does not represent considerable savings to the merchant relative to many of the cloud and/or tablet-based solutions now on the market.

Explain The Risks of Breaking The Contract

Remember, the most common model of free POS involves the vendor supplying free hardware and software in exchange for a five-year obligation to use their transaction processing services. Should the merchant go out of business before the agreement expires, they’re still on the hook for the remainder of the contract. When one considers small business failure rates, this isn’t a trivial matter. After four years, more than 50 percent of retailers have closed their doors and at least 25 percent fail in the first twelve months. It may seem imprudent to broach this topic before the business turns on the lights, but alerting a prospective client to this risk is the right thing to do. The last thing a failed business owner needs is to be saddled with a recurring bill for a product they no longer use.

Sign in to read more.