The Truth about Free POS Systems

Written by  on 21 October 2015

Chances are, you’ve heard about complimentary or deeply discounted POS systems offered by credit card processors and merchant service providers (MSPs). Maybe you’ve even been approached with offers for one or more free POS systems and have been tempted to take the bait. However, before doing so, it’s important to understand the truth about free POS systems, and to be wary of any processor or MSP that tries to convince you to opt for one. Here’s that truth, in black-and-white.

Free POS systems typically come with hidden costs.

In some cases, credit card processors and MSPs promote free POS systems as technology bundles, but build in higher processing fees to make up for the fact that merchants aren’t paying for hardware and software outright. Others give away free POS systems and then demand additional fees for installation, training, support, and/or upgrades.

Don’t quite believe us? Try this. Compare the payment processing fees for any free POS systems you’ve come across with processing fees charged by processors and/or MSPs that actually charge for POS technology. The rates for processing transactions completed on “free POS systems” will almost certainly be higher than for those rung up on POS systems that have a price tag.

Take a look, also, at the price of installation, training, and/or support, comparing charges attached to free POS systems and charges attached to POS systems that aren’t being promoted as “free.” The former are going to be heftier, and if you succumb to temptation, you’ll likely end up assuming a bigger financial burden than if you had laid out money for a POS system at the outset.

Accepting free POS systems means sacrificing flexibility.

Agreeing to free POS systems that are tied to payment processing contracts almost always ties restaurant owners and retailers to the same payment processor and fee structure—for a duration of several years. You’ll be tied to the company in question and won’t have the flexibility to shop around for better rates (and possibly, a processor that offers better service than the one to which you’re tethered). The amount of money you’ll pay over the life of such a contract may add up to enough cash to pay for your POS system—several times over.

Free POS systems frequently feature limited functionality, leading to additional headaches.

Most of the time, free POS systems don’t offer much in the way of functionality. For example, they’ll allow you to perform basic functions like ringing up sales, but won’t support mobile POS, generate detailed reports or support such mission-critical tasks as creating (or better yet, automatically creating) orders for vendors, keeping tabs on individual customers’ purchases and preferences, labor scheduling, and more. 

Just as important, free POS systems may not be configured for your particular type of business—which is a “must” in the hospitality sector. Without adequate functionality and the right configuration, you almost certainly face potential transaction processing errors, error-ridden or non-existent reports, missing inventory, customer dissatisfaction, and many other types of problems—all of which will negatively impact your reputation and your bottom line.

Free POS systems can put obstacles in your path to technology upgrades.

As mentioned above, taking advantage of free POS systems often means committing yourself to a long-term contract with a processor or MSP. But technology development continues to occur in the POS arena. With free POS systems in place, you may not be able to upgrade rapidly enough to suit the demands of your business—if upgrades are a possibility at all. And even if upgrades are permissible under terms of contracts that “gift” you with free POS systems, you may, as we’ve discussed here, end up paying for the changes.

We admit it: The idea of free POS systems is appealing at first blush because of the potential to save money up front. However, the truth is, free POS systems can end up costing you plenty of money—not to mention causing a host of other problems—in the long run. So as the adage says, “buyer beware.”

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Louisville, KY 40299

Phone: (502) 753-0154
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