What is a point of sale?
The point of sale (POS) is where the customer pays and the sale is finished. It means both the place (the billing counter, a mobile tablet or an online checkout page) and the system (machines plus software) used there.
A good POS makes billing fast and correct, keeps a record of every sale and tells the shop what is selling.
POS components
Hardware (the machines)
- Computer, tablet or terminal with screen: runs the software.
- Barcode scanner: reads the barcode, so the price comes up without typing.
- Receipt printer: prints the bill.
- Cash drawer: holds notes and coins; opens when a cash sale is done.
- Payment terminal: for debit/credit cards, and a QR code for UPI or mobile wallets.
- Customer display: shows the customer each item and the total.
- Sometimes a weighing scale (for loose fruit, grains).
Software (the brain)
- Item list with names, barcodes and prices.
- Tax rates and discounts.
- Stock (inventory) that updates with each sale.
- Customer records and loyalty points.
- Reports: sales per day, per item, per payment type.
The POS process, step by step
- Greet the customer and start a new bill.
- Scan each item (or type its code / weigh it). Check quantity.
- Apply discounts, coupons or loyalty points.
- Add tax and show the total on the customer display.
- Take payment: cash, card, UPI/QR or mobile wallet.
- Give change (for cash) and the receipt.
- Pack the goods and thank the customer.
- The software updates stock and saves the sale.
Worked example
Notebook 2 × ₹40 = ₹80; Pen 3 × ₹10 = ₹30; Juice 1 × ₹25 = ₹25. Subtotal = ₹135. Tax 5% = 0.05 × 135 = ₹6.75. Total = ₹141.75. Cash given ₹200. Change = 200 − 141.75 = ₹58.25.
End of day
The POS prints a day-end report. The cashier counts the cash drawer and matches it with the cash sales in the report. Any difference is noted and checked.
POS marketing
The till is the last place a shopper stops, so stores use it to sell a little more.
- Impulse items: sweets, gum, batteries and small toys near the counter.
- Point-of-purchase (POP) displays: posters, shelf talkers and stands with offers like 'Buy 2 get 1 free'.
- Loyalty programmes: cards or phone numbers that collect points for future discounts.
- Receipt coupons: offers printed on the bill to bring the customer back.
- Suggestive selling: the cashier politely offers a matching item (batteries with a toy).
- Data: POS reports show best-sellers, busy hours and slow items, so the shop plans stock and offers.
Try it: in the 3D and at home
In the last 3D step, add 2 notebooks and 1 juice. Before looking, work out the total with 5% tax and the change from ₹200 on paper. Then check. At home: take an old shop receipt and find the item lines, subtotal, tax, total and payment type on it.
Key formulas and definitions
- Line amount = quantity × price
- Subtotal = sum of all line amounts
- Tax = tax rate × subtotal (after discount)
- Total = subtotal − discount + tax
- Change = cash given − total
Worked examples
1. A customer buys 3 soaps at ₹30 and 2 toothpastes at ₹55. Find the subtotal.
3 × 30 = 90; 2 × 55 = 110. Subtotal = 90 + 110 = ₹200.
2. The subtotal is ₹200 and tax is 5%. Find the total.
Tax = 0.05 × 200 = ₹10. Total = 200 + 10 = ₹210.
3. The total is ₹210. The customer pays with a ₹500 note. How much change?
Change = 500 − 210 = ₹290.
4. A bill has a subtotal of ₹400, a 10% discount and then 5% tax. Find the total.
Discount = 0.10 × 400 = ₹40, so ₹360. Tax = 0.05 × 360 = ₹18. Total = 360 + 18 = ₹378.
5. Day-end report: cash sales ₹12,500. The drawer started with ₹2,000 float. The cashier counts ₹14,450. Is there a difference?
Expected = 2,000 + 12,500 = ₹14,500. Counted ₹14,450. Short by ₹50, which must be noted and checked.
6. A shop had 50 pens. The POS recorded 18 pens sold today. What stock should the system show?
50 − 18 = 32 pens.
Common mistakes
- Thinking POS means only the cash machine. It is the whole system: hardware, software and the billing process.
- Adding tax before taking the discount. Usually the discount comes off first and tax is on the lower amount.
- Not giving a receipt. The receipt is proof of purchase for returns and warranty.
- Ignoring the day-end match. If the drawer and report are not checked, errors and theft go unnoticed.