Free POS and Terminal Solutions Aren’t Always Free

In the past few years, a multitude of free POS models and peripherals have appeared. These free models have their drawbacks, but merchants are still seizing the opportunity to get their hands on free software or hardware bundles. However, as a merchant, how can you know that “free” is the best route? The first step is arming yourself with knowledge about these “free” models.

The most important thing to realize when considering a free solution over the purchase of your own equipment, is that “free” comes with more than a few strings and caveats, and assumes the buyer won’t look too hard at long term expenses.

As individual consumers, most of us are familiar with “free” or “freemium” products that we’re still paying for in some way. A wireless provider may offer the latest smartphone for free when you use their service and sign a contract. However, the fine print typically indicates that you are still paying for the phone by way of fees in your monthly bill, often adding up to more than the flat price of the phone itself. Financing a home or car is no different: if you can’t pay a certain amount upfront, you pay more for the convenience of paying smaller amounts over time.

The potential to pay more over time may not be as obvious when looking at a “free” POS system. Rather than financing the system, users pay for it (or more) over the long term in other ways. In the end, someone has to pay for the equipment and software.

How Consumers Actually Pay For Free Solutions

One common way that “free” system providers recoup their costs is from payment processing and credit card transaction fees. If the POS provider processes payments themselves, they may take their own cut of higher-than-average fees to do so or charge an additional fee on top of transactions that are processed through an outside card processor.

Additionally, credit card processors may pay a commission for referring or tying their system to their company. This may also mean that the “free” POS system is married to a proprietary software or specific card processor, making upgrading or completely changing a user’s POS operation difficult in the future. Think about that wireless provider. What if your “free” phone must be from a manufacturer and your data plan or access to music services are only those offered by the provider? How hard would it be to change to a different type of phone or give up thousands of cloud-stored photos and music to go elsewhere?

When it comes to “free” POS software, if it’s not tied to a specific POS system or processor, it may only be a limited or trial version, requiring a later charge or subscription fee to upgrade to a full version with all the features needed—functions that most retail operations will likely need.

How To Know If Free Is Really Free

So how can a merchant selecting POS systems and software understand if they are really getting the products for free? Ask about the system being considered. Which fees might be included, and if you are required to use specific hardware/software/processors. If you aren’t sure what the answers are—perhaps you’ve been blinded by “free”—do a little research. Understand what you are getting—or not getting—and which long-term costs might be included. Don’t be set on the upfront freebie. Get the best system at the best overall price.

And don’t forget how important your relationship with the seller is during the onboarding process. There are many aspects of a new POS system, like installation, coordinating delivery, configuration, troubleshooting, returns, distribution partnerships, price negotiations, training, technical support, and more. How much will the “free” provider do? It’s important to be working with someone you can count on to help you as your business adapts to the new software.

New businesses just starting out may find the allure of the “free” system/software very appealing when every dollar counts to help them get their operations up and running. This is where an experienced guide can help. The free stuff can be a great way to figure out what works and what doesn’t, but if expansion and flexibility is the goal, it can get very expensive. Find a credit card processor and/or POS software that meets your needs and price point first and build out from there. Think about the process as just one more long-term investment in your business.

Looking to grow your business? When you work with Beyond, you’ll get the right hardware that adapts with your business—and local partner you can count on.  Learn more.

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