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Point of Purchase (POP) or Point of Sale (POS) - Explained

What is the Point of Purchase?

Written by Jason Gordon

Updated at December 15th, 2021

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Table of Contents

What is the Point of Purchase?How does a Point of Purchase Work? What are Point of Sale Systems? Attributes of Modern POS systems Academic Research on Point of Purchase (POP)

What is the Point of Purchase?

A point of purchase (POP), also known as Point of Sale (POS), is a spot where a sales transaction between a seller and a buyer is finalized. It is a form of checkout mechanism set up by retailers to facilitate calculation of the total amount payable by the customer, creation of invoices and receipts for the customer and specification of available payment options to the customer. A point of purchase can either be an in-store counter or an online checkout facility.


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How does a Point of Sale Work? 

A point of purchase (POP) is a location where retail customers can checkout products and services. A POP is denominated from the customers perspective, rather than from the merchants perspective, in which case it is referred to as a point of sale (POS). A point of purchase can be a tangible entity as part of a brick and mortar store, or a virtual entity as part of an online store. However, regardless of its type, a POP involves the generation of an invoice for the customer. This is followed by offering the customer options regarding mode of payment. Once the seller receives payment, he issues a receipt for the same to the customer. Invoices and receipts can be either be handed out in printed form or generated electronically, or both. 

What are Point of Sale Systems? 

Point of sale or point of purchase systems are checkout instruments that typically consist of integrated hardware and software subsystems, customized to cater to the requirements of specific businesses. Most POS systems are digital in nature, and incorporate numerous devices and peripherals such as customer pole displays, card readers, barcode scanners, QR code scanners (for contactless payments), printers, digital scales, signature capture devices and monitors or touchscreens. Nonetheless, there are businesses, especially small retailers that still prefer to employ traditional off-the-shelf cash registers and calculators, but their numbers are fast declining. The use of modern point of sale mechanisms is not restricted to retailers alone - several business entities belonging to sectors as diverse as hospitality, accounting, and warehousing all employ POS mechanisms for various functions such as bookkeeping, tracking sales and managing inventory, labor and payroll. POS systems are also being widely used by businesses as effective deterrents against employee fraud. 

Attributes of Modern POS systems 

Modern point of sale systems have, in several ways, transformed retail checkout mechanisms. Advancements in POS systems have not only enriched the shopping experiences of billions of consumers across the globe, they have also made jobs of cashiers a lot easier. There are certain attributes common to all POS systems, regardless of the nature of application. They are: POS system structures are flexible and allow programming modulations including integration with numerous third-party software applications. POS systems are highly interactive and user-friendly. Most POS systems support remote operatibility. POS systems are low cost acquisitions and offer cost effective solutions for day-to-day sales activities. Besides, the usage of cloud-based POS systems in online retail transactions has greatly reduced the upfront costs typically associated with implementing and maintaining conventional POS systems. Furthermore, POS systems used in the hospitality and restaurant businesses are typically customer friendly and allow customers to check in and out of rooms or order food with relative ease. There are also certain subservient advantages of implementing computerised POS systems, such as: Digital product displays in POP systems attract customer attention, which often leads to additional sales. The prospect of a hasslefree shopping experience in a retail outlet equipped with a computerised POS system often attracts more customers to the business. The presence of state of the art POS systems also increases brand value of the business.

Academic Research on Point of Purchase (POP)

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point of purchase pop point of sale pos

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