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Basic POS Mistakes to Avoid When Starting a POS Business

In today’s market settings, POS (point of sale) systems make it easier for businesses to sell more goods and services and manage transactions effectively. This applies in all business settings, be it a retail store, school restaurant, salon, and petrol/gas station. Sometimes, POS systems may come up with certain challenges that can prevent the smooth operation of our businesses due to some avoidable mistakes. In this article, we’ve articulated these basic POS mistakes and how they can be avoided.

The most basic POS mistakes we have come across are associated with:

  • Type of POS system
  • Wrong installation process
  • Limited knowledge on how to operate the POS system.

However, these basic POS mistakes can easily be avoidable by:

  • Getting the right POS system
  • Proper installation process, and
  • Studying the POS components and fuctionalities.

We have lots more to explain in this post. If you’re ready to know more about the basic POS mistakes and how you can avoid them when starting a POS business. Then, continue reading this article for a proper understanding of all you need to get started.

What are the Basic POS Mistakes We Must Avoid?

Picking the Wrong POS System

In our bid to get POS at a cheaper price, we often find ourselves falling for the wrong product. This is because we do not take enough time to research the right POS system before selecting.

Picking the wrong POS can have huge consequences on your business. Some POS hardware has a cash register or credit card swiper problems. Apart from this, you may get stuck with bad customer service support, or have your POS services provider network hampered.

Most times, merchants go for a used POS system without studying the system. Purchasing a used POS system from an online store may cause problems for your business.

Most used POS machines are sometimes tied to a merchant account that previously owned them. This merchant account may or may not be powered by a legitimate bank. It sometimes results in extortion for all kinds of fees, or even getting your account frozen by the financial institution it is tied to.

To avoid getting stuck with the wrong POS system, ensure that you:

  • Read the POS software reviews,
  • Test the POS system before purchasing,
  • Get the POS machine from a trusted vendor,

Wrong Installation Process

The wrong installation process is one of the basic POS mistakes to avoid. Most times, the Installation process of the POS system might look simple and easy to go with.

It’s best to employ the service of a professionally POS system installer. We mostly recommend bringing the POS hardware provider/vendor to help with the installation process. This helps you to avoid the issues of wrong networking cables and software settings.

Improper networking cable connection and wrong software/terminal debit network settings can wreak big havoc on your POS business. On many occasions, customers report cases of glitches and EMV chip card reader issues that result in unexpected high fee charges. This often occurs when the system is not professionally installed.

Not Using the Major POS Features

All modern POS systems are cloud-based systems with unimaginable functionalities. They’re fitted with in-depth reporting and marketing features that help you bring in more business. However, most POS operators only use POS for the purpose of making sales and neglect those other advanced functionalities.

The most advanced POS features and capabilities include:

  • Sales reports,
  • Email marketing,
  • Inventory tracking,
  • eCommerce,
  • Employee management.

If you not taking full advantage of these POS features and capabilities, It implies you’re paying good money for capabilities you’re not using.

Lacking Internet Backup Plan

The very nature of the POS system and business environment demands a good backup plan in order to execute your business successfully. A good backup plan will enable you to take up payments from clients in the case of system failure.

The backup plan is most helpful in a situation where you’re using a web-based pos system that can’t process payments without a WiFi network. There are modern pos systems that are cloud-based software systems. They have an offline mode that can queue up credit card transactions when the internet is down for processing later.

However, we recommend you have a backup hotspot alternative network connection that you can use in case your main network connection fails. This is one of the basic POS mistakes that must be avoided at all costs.

Your backup plan should also include a plan to have an extra POS system or a mobile payment app depending on your business’s needs. Having them handy for a fallback when you encounter system failure with your primary POS system helps keep your business running.

Meddling Your Merchant Services Agreement

Sometimes, merchant accounts got hit with an account freeze/termination penalty as a result of violating their merchant service agreements without being aware of it. However, you can avoid unwittingly violating your merchant services agreement which could lead to account freezes and terminations in three ways:

  • Maintaining your monthly credit card processing limits.
  • Stick to the objectives of your business (ie. selling what you said you’d sell).
  • Reducing chargebacks on transactions.

Unsecured POS System

POS business operators often face the challenge of system hacking resulting in data bridge, compromising customers’ credit card information, fraudulent charges, and account suspension from your merchant service provider. This kind of POS problem is mostly associated with small businesses.

To prevent this harmful mistake in your business, you need to take some basic steps as we’ve outlined below:

  • Using a secured password(s) for your POS
  • Constantly maintain and ensure your POS system meets PCI-DSS compliance standards by:
    • keeping antivirus software up-to-date and,
    • assigning a unique ID to each client with computer access.
  • Giving your employees training on how to securely take credit card payments with the POS system.
  • Binding and encrypting your WiFi network

Not Using an EMV Compliant Terminal

Most times, merchants use a traditional magstripe terminal instead of EMV. The magstripe terminal does not accept chip cards which is a big and basic POS mistake and can limit the volume of your transactions. Using an EMV-compliant POS allows merchants to accept chip cards and help them to avoid losing clients.

Why is an EMV compliant terminal preferred to a traditional magstripe since they take more time to process transactions? The answer to this question is best explained with the points below:

  • EMV transactions are much more secured.
  • Magstripe card readers are easily targeted by fraudsters than EMV.
  • Majorities of EMV compliant terminals accept NFC payments.


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