What Is an EPOS System and How Does It Work? (2024) - Shopify UK (2024)

Traditional cash registers are good for serving customers at the counter, but they don’t automatically connect to your wider sales infrastructure.

For tracking inventory, retrieving customer information, monitoring staff performance—and serving customers—today’s commerce businesses use EPOS systems.

An EPOS (electronic point of sale) system puts the most important parts of your business at your fingertips. With the right combination of POS hardware and software, your team can manage stock, maintain customer relationships, generate reports, finalize sales, and more.

So what exactly is an EPOS system? How does it work? And what are the benefits of using an EPOS system in retail? Let’s answer these questions and look at the types of EPOS systems available to you—plus how to choose the best system for your business.

What is an EPOS system?

An EPOS (electronic point of sale) is a digital checkout and till system. It includes hardware such as card readers and payment terminals, and software that processes payments, tracks inventory, and performs other essential retail functions.

Using an EPOS system, you can efficiently complete transactions and monitor retail activity from a single device—even if you sell across multiple locations and channels.

The main components of an EPOS are software, hardware, and payment features.

EPOS software

EPOS software lets merchants view their sales on demand. With the right system, you can update your inventory in real time, while keeping customer data secure. Most EPOS software also contain a reporting function, along with other third-party integrations.

Some EPOS systems, like the Shopify POS app, are also available for iOS and Android devices, so you can process payments without additional hardware.

Common EPOS software features include:

• An intuitive payment process for customers
• Ecommerce and brick-and-mortar integration
• Order and inventory syncing
• Out-of-stock alerts
• Purchase order management and automation

EPOS hardware

EPOS hardware is the devices that customers and retailers use to buy and sell products. Different types of EPOS hardware are available, depending on the needs of your store.

Hardware can be as simple as a card reader combined with a phone app to process orders and accept payments. For a more permanent solution, you might choose to use a bar code scanner, a Bluetooth receipt printer, or a cash drawer.

Many retail stores use a touchscreen EPOS at the counter to quickly process card payments. Some systems (including Shopify) will also allow you to use an iPad to run your store.

Common EPOS hardware devices include:

• Touchscreen terminal
• Tap and chip card reader
• Bar code scanner
• Receipt printer
• Cash drawer

EPOS payments

From a customer perspective, the most visible role of an EPOS system is to take payments. Today, most consumers expect convenient checkout options, even from small sellers at pop-up stores or farmers markets.

With the right EPOS, you can accept credit and debit cards, mobile payments, and online orders. Because all transactions are tracked within the same system, an EPOS makes back office activities more efficient than when using a traditional cash registers.

EPOS system vs. POS system: Are they the same?

The terms EPOS and POS refer to the same type of digital payments system, which offers more advanced capabilities than a traditional cash register or shop till.

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

The terms EPOS and POS refer to the same type of digital payments system, which offers more advanced capabilities than a traditional cash register or shop till.

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 end.

An EPOS system enables you to accept in-person payments, track sales, and manage inventory, without the hassle and potential inaccuracies of manual reporting. It allows customers to pay for their orders with diverse payment methods such as cash, credit and debit cards, and even mobile payment. This improves the transaction process and gives customers more shopping and payment options.

When a retailer enters product information into an EPOS (or scans a bar code), the system calculates the amount that a customer needs to pay. Once a transaction is made, stock levels will instantly be adjusted. This allows your team to process payments and respond to questions around stock, etc., in a more efficient manner.

At the same time, an EPOS records sales and customer data. With accurate information at your fingertips, you can extract different types of reports any time. EPOS data reports cover customer loyalty information, sales, stock figures, and employee productivity, reflecting real business performance.

The benefits of using an EPOS till system in retail

There’s a good reason that retail EPOS systems are becoming ubiquitous. They’re the future of retail, with standard cash registers becoming a thing of the past. You’ve already seen some of the benefits of EPOS, but let’s take a closer look.

1. Accept payments anywhere in your store

Imagine you’re browsing through a chic boutique. Your eyes land on a shirt that matches your style, but you’re unsure about the fabric or the fit. You approach a sales assistant, who assures you of the high-quality material and finds your perfect size.

Convinced, you decide it’s time to buy. The assistant presents a mobile card reader. You securely enter your PIN, and voila! The shirt is now yours.

Finalizing sales on the shop floor is possible with an EPOS system—streamlining customer experience and removing barriers for your store staff.

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

Finalizing sales on the shop floor is possible with an EPOS system—streamlining customer experience and removing barriers for your store staff.

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.

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?

Most EPOS systems offer an overview of your business for a quick snapshot of online and in-store activities. The best systems also create 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.

3. Succeed at omnichannel selling

How easy is it for your customers to shop on your ecommerce website? Can they buy online and pickup in-store, for instance? A good EPOS lets customers buy from anywhere and choose their preferred fulfillment option—whether that’s in-store pickup or delivery.

Here’s an example: 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 use an EPOS to quickly satisfy customer needs.

💡 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 in-store 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 inventory admin

One advantage of inventory management with an EPOS is that customers can easily exchange items—but what else can an EPOS do for your stockroom?

Demand forecasting is another potential time and money saver. A good EPOS system will offer purchase order suggestions based on recent product performance or seasonality. It will 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 alert you.

All of these tools contribute to good product management. With the right EPOS system, it’s easy to categorize products by type, seasonality, promotions, and more.

5. Increase sales from satisfied customers

Here’s a common scenario: As your sales associate adds a product to a sale, their EPOS software flashes with a relevant upsell. It meets the customer’s needs, so they decide to purchase it, increasing your per-order revenue.

That’s one way that an EPOS increases sales and customer satisfaction. Other retention-building EPOS features include automatic tax calculations, easy discounting, and email or SMS receipts. Leverage those positive customer experiences to create customer lists that can be targeted with future marketing.

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

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 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 with relevant promotions. Reward them with loyalty discounts, and use filters to make sure you’re not spamming people with irrelevant content.

7. Integrate with apps and tools

Think your customers might appreciate live chat? Simple: connect your EPOS system to a live chat app.

Most EPOS systems are compatible with apps and tools to give you the features you need. You could 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.

💡 With Shopify, it’s easy to customize your EPOS and extend its capabilities. Find apps built by our trusted partners in the Shopify App Store for almost anything, from counting foot traffic to launching a loyalty program.

8. Stay competitive with innovative payment technology

Customers want to use their favorite payment methods, whether that means contactless payment or Apple Pay.

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

Shopify Payments is the fastest way to start accepting payments in-person, online, and on-the-go. It’s included in all Shopify EPOS 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.

With Shopify EPOS, for example, you can assign different roles and permissions for what staff can do in your system without manager approval—like changing a product’s price or applying a custom discount to a sale.

Types of EPOS systems

As the popularity of EPOS systems grows, so do 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 merchants, a traditional multi-store EPOS system is an all-in-one solution featuring a range of hardware. EPOS systems like these don’t rely as heavily on an internet connection, which makes them a good option for businesses that process transactions all day, every day.

Mobile EPOS

Mobile EPOS systems are perfect for selling on the go. Download software to your smartphone, purchase a card machine, and you’re all set. 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 systems work in a similar way to mobile EPOS systems. 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

Consider future needs, pricing, available features, and user-friendliness when making your decision.

Current and future needs

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 with it seamlessly.

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 tech, 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?

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

Pricing and available features

As with any purchase for your business, you’ll need to balance EPOS pricing with value offered. 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 forecast your cash flow.

💡 Shopify Payments is included in all Shopify POS plans, no sign up or setup required. Control your cash flow better and pay a pre-negotiated rate for all credit cards.

Free and paid features

Cheaper EPOS systems may only offer basic reporting and order fulfillment options for free. If you need to pay extra for advanced inventory management add-ons, ensure that initial savings don’t represent a false economy.

Ease of use

Features that solve your store’s sales and inventory problems are great—if your staff can use them.

When choosing the best EPOS system for your business, make sure it’s appropriate for your staff’s retail skill level. For example, if a software developer is needed to maintain your EPOS system, it might not be the right choice for a local coffee shop.

Another usability factor to consider is mobility. For some retailers, there’s no issue with tethering an EPOS to a checkout counter. Others, however, will greatly benefit from a mobile system to sell wherever customers are.

Get started with your retail EPOS system

Now you know what an EPOS system is, how it works, and the benefits it can bring, you’re ready to make decisions about your business’s growth. A retail EPOS system could be the key to unlocking more value from your daily activities.