In every industry there are popular myths and misconceptions which have developed over time, and serve to benefit the interests of various parties. Usually those that benefit are someone else, and not you.

Point of Sale is no exception. Here are some of the common POS myths and misconceptions, and how to avoid being caught.

Database Myths
EFT Misconceptions
Inventory Myths
The "Use One Supplier" Myth
Name Brand Misconceptions

Every Point of Sale system uses a database internally to store information and allow it to be retrieved quickly and in the manner required. All information in the system is stored in the database, and reliable database operation is critical.

Very few Point of Sale software systems use databases that were written by the company that developed the POS Software. Almost all use database systems developed by third parties. The are several reasons:-

• Developing Database software is more complex than most application programmers can handle, and it is far easier for the programmers to use third party database modules.
• Most databases provide a mechanism for extracting data that makes it relatively easy to extract information using queries.

Databases used in POS systems fit into two broad categories, each of which has advantages and disadvantages. The type of database that is most suitable depends on the type of retail operation that you have. Unfortunately, most POS programmers use the database they know, not what is the most suitable for the application, and this can lead to problems.

• Desktop Databases
  These are designed for small, single user systems and are designed to run on a single computer or small network. Examples include MS Access, FoxPro, Paradox, Filemaker and others.

  These are generally low cost, and some of them are quite old and do not support more recent operating system features. Products such as paradox are certainly approaching the end of their shelf life and support is likely to become more difficult over time. Developers using these databases are entirely dependant on the database developer, and many application developers have experienced difficulty with these types of databases when support from the developers is not what is required.

  Another problem with "desktop' databases is that they do not scale well. When you need to grow the system, problems result and because the POS software depends on the database, the POS application needs to be completely rewritten to use more powerful databases.

  In theory, on applications which use ODBC interfaces, the underlying database can be changed, however the theoretical advantages of this approach are rarely realised in real life, and the ODBC interface is merely another layer of "fat" in the system that requires increased CPU power to achieve acceptable performance.

• Server Databases
  These are highly scalable systems which run on a high performance servers which processes the database functionality for all the Clients, or POS Terminals. Examples include the various flavors of SQL, Oracle, IBM DB2, Sybase, Informix etc.

  These systems are much more reliable, powerful and scalable than desktop databases, but they have some drawbacks in a Point of Sale environment as well:-

  • Cost. These databases are much more expensive than desktop databases, and the cost is prohibitive for small operations. In addition, they require much higher specification hardware to run on the server. Such solutions are not cheap.
  • Risk. Having just said that these are more reliable than desktop databases, this may sound strange. But it is true in a different way. With a Server database, if the server is down, everything is down. In an office environment, if a server goes down for half an hour, that is a fairly minor inconvenience. In retail applications, if the server goes down, the store closes.

    What makes this even worse, is that a network problem can bring the entire operation. If a power cable from a switch is accidentally unplugged, the entire operation comes to an immediate grinding halt. Right in the middle of the sales being processed.

  Server databases are far better than desktop databases for large installations, but they also have their drawbacks, and when you choose between desktop and server type databases it is important that the type of databases matches you business.
• SELLmatix Database
  SELLmatix is one of the rare Point of Sale software packages that does use an in house database that was written by the same developers that wrote the POS software. This database was originally written in the mid 1980's because of a lack of reliable database packages available at the time and support issues with some that did exist. Millions of transactions have been processed using this database in thousands of sites. It is reliable. If a problem was to occur, we developed it, we have the source code and we don't depend on anyone else for support and maintenance. And, the development cost has been recovered a long time ago which makes it affordable.

  Most important however, is the architecture which is a hybrid incorporating features of both a desktop database and a server database.

  SELLmatix databases are replicated on every terminal. Reboot the server, and the POS terminals continue running without any problem. Unplug a network cable, and the POS terminals continue to operate. If the server completely failed and there were no backups, the databases could be rebuilt from the information on the terminals.

  Instead of the server responding to client requests in real time, it acts more as a controller which updates the POS terminals and retrieves transactions from the POS terminals. More like a store and forward system that normally does operate in real time. But if it does need to go offline, the terminals can continue to operate.

  While this type of architecture is far more robust in a Point of Sale environment, every system also has limitations. It does not offer the built in queries that are available to SQL programmers or power users. But few retail operations have the in house skills to use these features, and instead rely on standard pre-created reports which means that much of the database functionality that you pay for is not used.

  Of course SELLmatix can import data from virtually any source, as well as export all of the data in the system. This means that where sophisticated queries are required the raw SELLmatix data can be imported into any of these databases to make such queries easy. In many cases this can be done using a single user account which reduces the license cost compared to what you would pay for a per terminal license on the same databases.

In other words, SELLmatix uses a database architecture which is a hybrid of desktop and server databases which makes SELLmatix suitable for both small retail sites as well as large, while providing cost and performance benefits in both cases.

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Some POS software has built in Credit Card Processing. While this may look like a good idea in the beginning, in reality it benefits the POS Vendor the most because it allows them to sell you more hardware and make more money.

Certainly there are cases where built in credit card processing is an advantage, or even necessary. We have developed such systems for major retailers, and where it was justified, could incorporate this feature for clients. However the criteria to make this worthwhile are much tighter than many people realise, and in most cases, you are better off to use the terminal provided by your local bank. Some of the reasons include:-

• Faster Performance.
  If you use a separate terminal supplied by your bank, instead of holding up the customers while the approval goes through, you can switch the sale tabs and process another customer order, and then switch back when the approval comes through. Integrated payment solutions tie up the POS while waiting for the approval to be processed.
• The key determining factor in choosing your credit card payment processor should be the fees and terms offered by the processor, not a question of which payment processor is supported by the POS system.

  Integrated POS payment processing is not a process where one bank approval works with every payment processor, and separate approvals and interfaces are required for most payment processing options. Most POS systems that offer integrated processing are only able to work with a limited range of payment processors (banks).

  Many users of POS systems that do have integrated credit card processing don't use this feature, because the transaction fees of the supported payment processor are too high, so they use other card processing alternatives anyhow.

• Gaining bank approvals for integrated payment processing is expensive and time consuming. This adds to the cost of the software. And it adds complexity. In most cases, particularly for small retailers, this cost and complexity is not justified.

Having said the above, there are cases where integrated payment processing is a big advantage or even necessary. Typically this happens where there are multiple retail outlets which have a group payment processing arrangement with a payment processor that handles all credit card transactions.

In cases where this applied we would consider integrating payment processing where multiple installations were involved, and there are a number of custom enhancements which can often be made. We would look at this on a case by case basis.

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Inventory control is one of the main benefits that retailers are seeking when looking for a Point of Sale system. SELLmatix fully supports inventory control, and has a number of features which make it much easier to implement than with other systems.

Many retailers that have not been tracking inventory however, do not fully understand what is involved in tracking inventory, even with a computer system, and when they try they become frustrated and sometimes even refuse to believe what the system is telling them.

The amount of work involved means that it is not necessarily worth the effort to track the inventory, and careful consideration should be given before deciding whether to use stock control, and if so how to do so. Stock Control systems are never implemented perfectly right from the beginning, and it takes discipline and practice before it all starts to come together.

Firstly, if you are going to track inventory, then you must:-

• Perform a stocktake and count each of the items which you are planning to track. No stocktake has ever been performed where there were no counting errors.
• Record all stock receipts and have them entered into the system.
• Record all wastage, breakage and giveaways.

Your point of sale system will record all your sales and deduct these from the quantity on hand. You have to enter the other information.

Inventory systems do not prevent losses and errors from occurring. You will never be able to count stock, record purchases and come back 12 months later and print out an accurate stock list where the quantity in the stocktake matches the quantity in the system perfectly. In every case, one or more of the following will occur:-

• theft by staff or "customers" will take place.
• errors will be made in recording quantities received will occur.
• breakage and spoilage will occur which is not recorded in the system.
• you will give out freebies to customers or staff which are not recorded.
• you will take merchandise for your own consumption which is not recorded.

Any and all of these incidents will cause your stock on hand figures to be inaccurate. If you wait for six months or more before you perform another stocktake, and you are not accustomed to living with the disciplines involved in stock control you will not believe the amount involved in the discrepancies, and will think that the software is counting incorrectly.

On the other hand, while an inventory system cannot replace stocktakes, it can help you to determine if your shrinkage is within an acceptable range, and it can help you manage so that you can identify where losses are occurring and take action to reduce the losses. While this will increase your net profit, rather than reducing your workload, it will increase the amount of work you need to do in the beginning. Once you have inventory under control, your workload will reduce however, and the inventory system will allow you to perform spot checks to determine if further action needs to be taken.

When setting up a new system the chances of a successful inventory implementation are very small unless the following steps are taken:-

1. Delay implementation of the inventory system until sales processing is running smoothly and reliably. You have enough work to do already and trying to implement inventory control from the beginning will put you in overload slowing the entire process.
2. Start tracking inventory with a small group of items (department) which have a relatively high value, and where you suspect that losses may be occurring. There should be no more than 20-30 product lines in this group.
3. Count (stocktake) the items in this group every day for the first week. In this way, when discrepancies occur you only need to go back over the past 24 hours to identify what happened. If you have to try and account for losses that occurred a week ago or a month ago, this will be difficult. But the chances are that you will be able to identify a loss that occurred in the last 24 hours.

   Another reason for doing this is that you will see that the system is counting the stock accurately.

4. Implement a way of tracking and recording the losses you can identify at the time they occur. For example, if an item was broken, set up a payment method called "Breakage" instead of "Cash", and when items are broken, on the Point of Sale, sell the item and finalise it to this breakage finalisation. In that way, your stock count will be accurate, and you can see the losses on a day by day basis.

   Similarly, if you or the staff are taking items for their own consumption, set up a finalisation method called "Staff" and sell the items using this finalisation method to pay for the sale.

   In this way, your stock count is kept more accurate, and you have some idea where losses are occurring as they happen instead of doing a stocktake in six months and wondering what happened.

5. Once inventory is being maintained accurately on the first product group, reduce the number of stocktakes being performed on that department from daily to weekly. Then and only then, begin stock tracking on one more product group.
6. Add other departments one at a time while continuing to perform spot checks on the departments where inventory control has already been implemented. Decide on a department by department basis whether it is worth the time and effort of tracking inventory for that department.

Some "Point of Sale" software systems will not let you sell goods unless there is sufficient stock on hand. These are not really Point of Sale software packages, they are systems designed for wholesale businesses run in the back office, and they are masquerading as Point Of Sale software. In a retail environment, if a customer presents an item at the check-out and wants to buy it, then it is available and in stock. You take their money, and the customer takes the goods. Asking the customer to wait while you key information about stock orders received or some other workaround to allow the sale to be processed is simply unacceptable. Don't even try and use that type of system in retail.

SELLmatix allows you to sell the item no matter what the recorded stock on hand might be, and it deducts the quantity sold from the stock on hand, allowing it to become negative. Situations where the system thinks there is insufficient stock on hand are almost always caused by forgetting to record stock received. When the stock received is entered the figures will automatically correct, and you have not inconvenienced the customer.

SELLmatix also includes some features which make inventory control for retailers much easier, and these features are rarely found in other packages. Of course there are situations where management disciplines mean that you do not wish to use these features, and you can turn them off if you wish. These features:-

• Allow stocktakes to be performed while trading is taking place. This is very important. With other systems you have to close the doors and stop trading while the stocktake takes place and the updated figures are being entered into the system. This is because if an item is sold, you can't tell if the sale occurred before the item was counted or after.

  With SELLmatix, you can record the stocktake figure for an item on the point of sale, and the stocktake record is place in the stream of data in sequence with sales transactions. Sales that have occurred before the item was counted to not affect the stocktake figure. Items sold after the stocktake are deducted correctly.

  Of course you still have to check that an item has not been taken from the shelves and put in a customer's shopping trolley and is still there when the stock is counted and entered into the POS terminal, so this feature may not be useful in every circumstance. But for many retailers this feature can make a dramatic difference in stock control.

• SELLmatix allows stock receipts to be entered at the point of sale. Once again, this feature is not useful for every retailer, and can be disabled. But for many retailers this feature makes stock control easier or even worth the effort.

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With complex system, the conventional wisdom has been that you should purchase everything from the one supplier. The logic to justify this is that if a problem occurs, there is a risk that each supplier will blame the other and you will have difficulty and extra expense when resolving problems.

Five or ten years ago, there was some merit to this concept in Point of Sale. Some features were only available through proprietary devices and there was far less standardisation than there is today. Now there a much higher degree of standardisation in devices used by POS systems, and where software requires a particular device this is a weakness in the system which indicates you should look for something else.

Yet POS vendors continue to try and push the idea that you should buy everything from the one supplier. The reason now however, is that the supplier they want buy everything from is them. If they can convince you of this then they also know that they can get you to pay more by playing on the same fears.

Provided that you use standard equipment there is no technical reason why there should be any problem in identifying the cause of problems. Our troubleshooting guide shows how to identify whether a problem is with the hardware or the software, and the same techniques work just as well with other POS systems. The important issue is the quality of the equipment, not where it is bought. Reputable POS suppliers no longer have any difficulty handling reputable POS equipment, can arrange for it to be serviced if problems arise, regardless of whether they have supplied it or not, and probably already have experience with those devices as long as they are industry standard.

Unfortunately there are still suppliers that try and market non standard equipment that is different for no good reason except to get you to pay more. Such equipment uses unique parts and can only be serviced by the original manufacturer. Avoid this type of equipment and anyone that tries to sell it to you.

Nothing in this section says that you should not buy everything from the one supplier. If the prices are reasonable, the quality good and the equipment is standard, there is no reason to go elsewhere. But if a supplier makes a big deal about the importance of buying everything from them, there is probably a trap in there somewhere.

Certainly where you have a single supplier you do have the ability to make a single phone call and say "fix!". But in most cases you pay heavily for the privilege.

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Name brand companies are those that have acquired a reputation in their industry, and are able to charge a premium for the goods and services they provide because of that reputation.

Companies go through phases where they must be innovative and well priced to gain a good reputation, a phase where their brand name is established and they can charge a premium, and finally a stage where they lose their reputation because they are overpriced and uncompetitive.

The technology of Point of Sale equipment is fairly mature. POS devices are distributed by a few major distributors in each country, and these distributors can't afford to sell poor quality equipment that is unreliable becasue it would kill their business. There might be several hundred POS system suppliers that you can buy from. But there are rarely more than 10 major wholesalers where they buy their equipment. If you are buying equipment that is sourced through a major wholesaler, and it is rated for your workload, then in general, you don't have too much to worry about. There are however, a couple of exceptions, and some vendors try and take shortcuts and end up with problems.

No Name brands
Occasionally you will see very cheap devices, for example CCD barcode scanners, in generic packaging where the name of the manufacturer does not appear anywhere on the packaging. These often have poor read rates, and some even interpret the case of Code 39 barcodes characters incorrectly. (Code 39 only has upper case characters in the character set, but some of these cheap no-name scanners return lower case depending on the state of your Caps Lock key). This may not sound serious but where they don't follow the standards one should be very careful.

These manufacturers of course hope that some other company will put their branding on the product. As a general rule, if a manufacturer won't put their name and address on the packaging and documentation, give them a big miss.

Touch Screens
None of the major manufacturers of computer displays make touch screens. They make ordinary monitors and displays. The "Touch " part is usually added after the display leaves the plant of the display manufacturer.

Touch panels are sheets of special material that are fairly thin. The case of the display is opened and the touch panel placed in front of the actual display and the case reassembled. You can in fact add a touch to almost any monitor or LCD display but it does require special skills and few computer technicians are experienced in doing this. In most cases it is cheaper and easier to buy a monitor or display with the touch panel already installed.

There are several different types of touch panels that work in different ways. Most work on electrical resistance at the point where they are touched, others use capacitance, and yet others work using a surface acoustic wave.

With almost all touch screens, sensitivity is lost with repeated touches to the same area.

There are two major manufacturers of touch panels and they supply around 90% of all the touch panels used in touch screens. One of these manufacturers is ELO and they are a division of Tyco. The other is Microtouch and they are a division of 3M.

Both ELO and Microtouch quote a service life of around 35 million touches to a single area of the touch panel. If you use either of these brands, it is very unlikely that the touch panel will ever wear out. We have seen other touch panels wear out in as little as 6 months use at Point of Sale.

Regardless of the brand of the touch monitor that you buy, chances are that it will use either an ELO or a Microtouch touch panel. If so, don't worry. If you are considering another manufacturer you should consider durability very carefully.

Computers
Personal computers are a commodity item. Anything the equivalent of an Intel P3 or later that will run Windows 2000 or later is more than adequate for SELLmatix.

Some computer models made companies such as Gateway and Dell use cases and components which are non standard, and this means that you are forced to buy replacement parts such as power supplies from the manufacturer. Avoid these. Ordinary plain clunky "white box" computers are the cheapest and easiest to service.

There is an almost an infinite range of options for reducing the case size, reducing or eliminating moving parts such as fans and disk drives and replacing them with various types of NV Ram if this is important to you. But make sure you don't pay too much for the way they bend the plastic in the case.

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