So you decided to buy a new POS system for your business. Received a couple of quotes and then think, hang on I can buy used hardware and software and save a lot of money. Websites like Gumtree and OLX has made it very easy to get onto the Web and shop around for used POS hardware. Instead of heading accepting a quote from a POS company, many buyers check online listings first to see if they can find what they want, gently used, at a bargain price. Get POS hardware for cheap is the objective here, right?
However, a point of sale (POS) system for your business is something you should never buy this way. While a used POS system may look like a bargain on the surface, here are four things you’re actually buying when you buy from Gumtree and OLX:
1. An Old Operating System
Like any computer system, a POS system uses a specific operating system (OS) to function. Whether it’s Windows, Linux, Android, iOS, or a proprietary operating system, if the POS solution you’re considering isn’t running on the latest version, you may put your business in jeopardy.
With an outdated OS, you’re running the risk of security vulnerabilities that would put your company at risk for data breaches — something no small business can afford. Security breaches that result from those cyber attacks can result in data loss, liability, fines, and bad publicity — which means utilizing a used POS system could, potentially, put you out of business.
Older versions of an operating system are usually slower and more prone to downtime and failure. You also run the risk of end of life support in which the POS vendor will stop selling and sustaining the product and leaving you to fend for yourself when something goes wrong — and it will go wrong, eventually, and probably at the worst possible time.
Using a POS system running on an outdated OS also may limit what you can do with the system. You may want omnichannel capabilities, task automation like inventory management, employee management, and daily reports. An outdated OS won’t support the POS software’s latest and greatest features like these, which means you’ll be stuck doing things the old fashioned way.
In some cases, it may be possible to upgrade to a new OS that will support the latest POS software applications, but it won’t be free. You’ll have to pay for the upgrade, and that can quickly negate the money you save by buying a used POS system. In most cases the hardware becomes slow when the latest OS is loaded on the old POS hardware, as the latest OS like Windows 10, is resource hungry. Meaning it needs more memory and a higher spec processor.
2. Outdated POS Software Applications
If you purchase a complete point of sale system with pre-installed software second hand, the POS software you’re buying might not have any value to you at all. The software set up on the system may only apply to the previous business.
For instance, a retail point of sale system with an elaborate inventory matrix and layaway options is a very different software application than a restaurant POS system with a kitchen display system integration and split check functionality.
On the rare occasion that you may buy a used POS system with software that works for your business “as is,” remember, old POS software may not be PCI compliant by today’s standards. This factor could compromise your ability to securely accept credit cards — which increases your odds of becoming a victim of a cyber attack.
Also, you’ll need to transfer ownership of the software account (and that typically includes a transfer fee) or pay for a new software license to ensure you’re using the software legally and to enable you to manage and update the software moving forward.
Furthermore, and this is a biggie, you’ll also need to reprogram the POS software for your specific inventory items or menu. Reprogramming point of sale software can be more difficult and time-consuming than starting with a clean slate.
Lastly, you’ll need to invest time and resources into training your team on how to use the software. Keep in mind that when you purchase a new POS system, that licenses, programming, and training usually amount to the most significant part of the initial bill — so either way, expect to invest in these areas even if you buy a second hand POS system.
3. Worn and Outdated Hardware
POS hardware manufacturers upgrade their products frequently to keep up with complex and power-hungry software applications. The demands from their customers for ergonomics and ease of use, and the competitive race to keep up with industry trends make enhancing their product offering an ongoing effort.
If you’ve ever shopped at a legacy department store like Signatures or Latinos restaurant, did you happen to notice the old school POS system that looks like it could pass for a vintage RadioShack computer? While vintage style is always in vogue when it comes to fashion or decor, it’s a big faux pas when it comes to technology. New POS hardware has a sleek, modern aesthetic and is often designed to conserve counter space. What kind of message will a clunky, used POS system send about your brand? In addition, old POS hardware could cost you sales. With slow POS systems and POS hardware that stands between you and the customer, obstructing the way. Have you read about the retail phsycology and how obstructions hamper sales?
Moreover, the older POS hardware is, the harder it will be for you to find replacement parts or to get help from a support desk since service techs are likely trained to focus on the latest devices. It will also become increasingly hard for you to find the right hardware drivers that enable a connection between the POS system and peripheral devices such as receipt printers, barcode scanners, touch screens or cash drawers that automatically open.
Lastly, while most POS hardware manufacturers offer standard warranties on new purchases, once the warranty period expires, repair costs will come out of pocket. If you buy a used POS system you do not inherit the remainder of the current warranty. Simply because the hardware vendor can not stand in for used equipment. The vendor will not have replacement parts nor replacement units. Most manufacturers don’t offer a warranty extension, and if they do, don’t expect it to be cheap.
With new hardware, you can send defective components back to the manufacturer for repair or replacement. With hand-me-down equipment, you may have to live with what you have.
4. Limited Payment Processing Capabilities
A pivotal point to think about if you’re still considering buying a used POS system is which payment processor you can use with the system. If you’re a seasoned business owner, you’re no stranger to shopping around for the best credit card processing fees — and you know how much they can fluctuate from one provider to the next. A few extra cents that some merchant service providers charge per transaction can add up to hundreds or thousands of dollars per year.
Not all point of sale systems integrate with every major payment processor, and more often than not, the POS system is tied to one or two select providers. If you don’t bother to do the proper research, you may unknowingly be making an expensive long-term commitment with a merchant account provider.
You may also find used POS systems for sale that are not EMV compliant. Since U.S. merchants began accepting chip cards with the EMV liability shift in 2015, many merchants have upgraded their operations and are trying to make a quick buck off the old unit.
What to Do If You Have an Old POS System
However, if you are one of those merchants looking to make a quick buck on your old POS system to help offset the cost of a new one, there are a few avenues you can explore.
Donate the Old POS System
Look for local charities that accept donations of electronic equipment. Your contribution could be tax-deductible.
Write it Off
And speaking of tax-deductible, talk to your accountant to see if you can write off your old POS system as an obsolete fixed asset.
Check with local recycling centers in your area. They will usually accept electronics to ensure they are disposed of in an environmentally friendly way.
To Sum Up
Let’s be honest. The initial cost of a new POS system will set you back a few thousand rands per unit once everything is said and done. a used POS system will cost you it seems much less than a new POS system. However if one takes what it takes to get the old POS up and running and keep it updated one will find that there is a huge hidden cost factor. Why invest in a business and when it comes to the POS system. people opt for the cheap and nasty, just to end up with an obsolete POS system?