Wednesday, February 12, 2020

Why Do I have to Pay Monthly or Annual Fees with my POS System?

I have been hearing this almost daily now for the last few months: "Why do all of the new point of sale software programs have a monthly or annual fee to use the software? I have been using Microsoft RMS for 7+ years and never paid for anything once I purchased the software. I want a POS system without any monthly or annual fees.".

The short answer is that times have changed. Do we still see leaded fuel at fuel stations? Cigarette vending machines in bars and restaurants? Of course not.

The same is true with point of sale technology. Aside from Y2K, there was little change in the POS industry from 1995 to 2010.  For retailers using stand alone payment terminals, there has been little to no change until Windows 7 support ended.

Aside from the credit card processing/merchant services changes coming out every 5 months or so, computer operating systems and hardware are changing which may or may not create issues with an older point of sale software program.

With technology changing, and retailers using POS technology to increase revenue, you need to be using a POS system that can be updated on a regular basis.

Also, if you are using stand alone payment terminals, you are likely loosing around $40/week per terminal in mis-keyed transactions based on a survey that I did last year.

A good percentage of retailers need point of sale software that can be continually improved to match changing technology and a competitive marketplace. To get this type of point of sale technology requires paying an annual or monthly subscription - no matter what point of software program you use.

Now - there are exceptions:
  • Retailers who are operating the store as a hobby
  • Retailers is smaller towns with no competition
  • Retailers who offer something unique and don't foresee local or online competition
  • Retailers not looking to grow - just maintain status quo until retirement or the business is sold
  • Retailers willing to gamble that nothing will ever happen to their POS system (eg not having to pay $500/year for 7 years equals $3500 which would get me at least a basic new POS when the current system dies),
In these situations, it may be possible to put in a POS system like Retail Management Hero or NCR CounterPoint and never pay a dime once the system is up and running. Of course, if something does happen, the expense could be quite significant. Think of it like car insurance - you can pay $90/month for car insurance or gamble and then pay $12000 for a new car if your car is totaled.

If you go the route of not paying for software maintenance, then I'd recommend having a plan in place should the POS system crash and also having at least $5000 set aside to pay for a POS system or repairs to the existing POS system.

Thoughts? Comments? Suggestions? Questions? Then please contact me at 208-340-5632 or

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