The POS Software Blog

The POS Software Blog

News from Tower Systems about locally made POS software for specialty local retailers.

Tagno lock-in

Before You Sign For POS Software, Read the Contract

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Choosing point of sale software is one of the most important decisions a small retailer will make. The software sits at the centre of the business, handling sales, stock, reporting and customer records every single day. It is chosen with care, and rightly so. Yet in all the attention paid to features and screens, one part of the decision is often rushed: the contract.

The agreement behind the software deserves the same scrutiny as the software itself. It sets out what a retailer is committing to, for how long, and on what terms. Get it wrong, and a business can find itself tied to a product that no longer suits it, with no easy way out.

Why the POS software contract fine print matters

A recurring story in retail is the business that signed quickly, assuming a monthly fee meant a monthly commitment. Too often it does not. Some providers structure their agreements around long fixed terms of two or three years. The monthly payment looks flexible, but the contract is not. Should the retailer wish to leave early, the remaining term can fall due in full, sometimes with an additional penalty on top.

This is not always obvious at the point of signing. Contracts can run to pages of legal language, and in the excitement of moving to new software, the exit terms are easy to overlook. The result is a business locked in place, paying for a product it has outgrown or simply come to dislike.

A different approach

Tower Systems takes a deliberately different path. Its software agreement is written in plain English, and the rental runs month to month. If a retailer decides in any given month that the software is no longer wanted, they simply stop paying the next month. There is no lock-in period, no early exit penalty, and no drawn-out release process.

That structure was introduced in 2019, and the reasoning behind it is straightforward. An agreement that customers can leave easily keeps the company accountable. It removes the false security of a signature and replaces it with something more valuable: a daily reason to earn the business. Software has to be worth keeping, and support has to be worth paying for, because the customer is always free to walk.

What retailers should do before signing

The lesson applies to any provider, not only to one. Before signing a POS software agreement, a retailer should take the time to read it properly. Every clause matters, particularly those covering the term, renewal, price increases and cancellation.

If the document is dense or unclear, there is no shame in seeking a second opinion or brief legal advice. A short review now is far cheaper than years tied to the wrong product. It is also worth asking direct questions: How long is the commitment? What happens if the software is no longer wanted? Are there any penalties for leaving? The answers, and the ease with which they are given, say a great deal about the provider.

There is no need to feel rushed. The strongest position in any business agreement is the moment before signing, because the choice to walk away still exists. Once the signature is on the page, that power is gone.

The bottom line

Point of sale software is a long-term relationship, and like any relationship it works best when both sides are free to choose it each day. A fair agreement, clearly written and free of traps, is a sign of a provider confident in its product and its service.

Tower Systems makes point of sale software for specialty and independent retailers across Australia and New Zealand, backed by local support and a month-to-month agreement with no lock-in. Retailers weighing up their options are welcome to get in touch at sales@towersystems.com.au or visit www.towersystems.com.au.

Payment choice: why the freedom to choose your processor can save you thousands

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When you choose POS software, you are often also choosing who processes your payments. With some systems, that choice is made for you. The software and the payment processor are bundled together, and the rate is set by the vendor. At Tower Systems, you keep the freedom to choose your own provider and negotiate your own rate.

That freedom has a real dollar value.

One retailer switched from software that locked them in on a payment platform and is not saving thousands of dollars a year.

Many international POS platforms tie their software to their own payment processing. To use the software, you use their payments, at their rate. It is easy to set up, and that is partly the appeal. Easy can be expensive.

This is like a tax on every sale.

When your sales grow, the money the software company makes from you grows. What are they selling: software, or a taxation system on your success?

When one vendor controls both the software and the payments, there is no pressure on the rate. You cannot shop around and you cannot negotiate, because the processor is built into the system you depend on. A small margin on every transaction across a year’s trading adds up.

A worked example

A specialty retailer turning over $1.5 million a year in card payments, on a bundled platform-tied processor, might pay an embedded margin of around 0.7% above the underlying cost of acceptance:

  • $1,500,000 in card turnover
  • 0.7% embedded margin
  • Around $10,500 a year

If that same retailer can choose their processor and negotiate directly, moving to a competitively priced provider could save more than $10,000 a year. That stays in the business.

The exact figure depends on turnover, card mix and the deal negotiated. The basic calculation is the same for any retailer: when you can shop and negotiate, you can lower the cost. When that option is gone, you pay what you are charged.

Why we leave the choice with you

We could bundle payments into our software. We chose not to.

You know your turnover, your margins and your existing banking relationships better than any software vendor. Keeping that choice with you means you can shop the market, compare providers on rate and service, negotiate using your own volume as leverage, and change processors later without changing your POS software. When payments are locked to the software, switching processor can mean switching systems entirely. When they are separate, your options stay open.

A locked-in processor takes a quiet margin on every sale. Over a year, for a busy specialty retailer, that can be more than ten thousand dollars. The freedom to choose and negotiate puts that decision back where it belongs.

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