Sunday, September 23, 2012

Owning versus Renting Point of Sale Systems

One of the more recent trends in specialty retail point of sale systems is the ability to 'rent' a system. Generally one monthly payment includes the software, hardware and support.  Traditionally, point of sale systems have been purchased outright (or leased with intent to own after 3 to 5 years).

This question came up again when I was co-chairing a retail technology forum at the IFTD show in Reno, NV.

The answer simply comes down to down works best for your budget. An outright purchase means that you own everything and can start enjoying a return on investment with your system. However, just like some people prefer to lease a car, a monthly rental payment tends to be easier on your budget.

Things to watch out for when renting a point of sale system include the following:
  1. Is everything included in the monthly payment (software, hardware, support and upgrades)?
  2. Do you still have access to all you customer and inventory information should you decided to switch to a different system?
  3. What happens if the company goes out of business?
  4. How are hardware repairs handled?
The final pondering point we talked about at the conference is that renting will cost more in the long run. With a typical point of sale system starting around $3000.00, we determined that utilizing a similar system with a monthly payment of $79/month will cost $4740.00 over the course of five years.

In the end - it is what works best for you and your budget.  Of note, there are some 'free' point of sale systems being offered. We all know that nothing is free - these companies make money on the back end by charging higher fees for credit card processing or similar services.

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