Know and understand characteristics and uses of computers in the retail industry including point of sale (POS) terminals and electronic funds transfer at point of sale (EFTPOS) terminals

6 ICT Applications – Retail Industry

Learning Objective

Know and understand the characteristics and uses of computers in the retail industry, including Point of Sale (POS) terminals and Electronic Funds Transfer at Point of Sale (EFTPOS) terminals.

1. Role of Computers in Retail

• Automation of routine transactions.
• Real‑time inventory control and stock replenishment.
• Generation of sales reports for management decisions.
• Improved customer service through faster checkout.
• Integration with accounting and supply‑chain systems.

2. Common ICT Applications in Retail

1. Point of Sale (POS) software.
2. Electronic Funds Transfer at Point of Sale (EFTPOS) systems.
3. Barcode scanning and label printing.
4. Customer Relationship Management (CRM) tools.
5. Stock management and ordering systems.
6. Digital signage and interactive kiosks.

3. Point of Sale (POS) Terminals

A POS terminal is a computer‑based system used to record sales transactions. It typically includes a monitor, keyboard or touch screen, receipt printer, cash drawer, and barcode scanner.

• Key Characteristics

  • Runs specialised POS software.
  • Connects to peripheral devices (scanner, printer, cash drawer).
  • Stores transaction data locally and/or in the cloud.
  • Often includes a touchscreen for ease of use.

• Primary Uses

  • Processing sales and issuing receipts.
  • Updating inventory levels instantly.
  • Applying discounts, promotions, and loyalty points.
  • Generating end‑of‑day sales reports.

4. Electronic Funds Transfer at Point of Sale (EFTPOS) Terminals

EFTPOS terminals enable electronic payment by debit or credit cards. They communicate with banking networks to authorise and complete transactions.

• Key Characteristics

  • Secure encrypted communication with banks.
  • Supports chip (EMV), magnetic stripe, and contactless (NFC) cards.
  • Often integrated with the POS system to combine sales and payment data.
  • Provides transaction receipts for both merchant and customer.

• Primary Uses

  • Authorising card payments instantly.
  • Reducing cash handling and associated risks.
  • Facilitating refunds and charge‑backs.
  • Collecting electronic transaction data for analysis.

5. Comparison of POS and EFTPOS Terminals

6. Advantages of Using POS & EFTPOS in Retail

• Speedier checkout reduces queue times.
• Accurate inventory tracking prevents stock‑outs.
• Electronic records simplify accounting and tax reporting.
• Enhanced security compared with cash‑only transactions.
• Data collection supports targeted marketing and sales analysis.

7. Potential Disadvantages / Challenges

• Initial cost of hardware and software installation.
• Dependence on reliable electricity and internet connectivity.
• Need for staff training and ongoing technical support.
• Risk of data breaches if security measures are inadequate.

8. Summary

Computers have transformed the retail environment by automating sales processes, managing stock, and enabling secure electronic payments. POS terminals handle the transaction workflow, while EFTPOS terminals provide the means to accept card payments safely. Together they improve efficiency, accuracy, and customer satisfaction, but require careful planning, investment, and security management.