One of the biggest challenges for both consignment stores and pawn shops is the fact that inventory is not owned by the company. These businesses obtain their stock from individuals who may want their property back at some point in the future. How do companies like these manage inventory and track sales so that they don’t run out of stock or sell something that has been taken back? They invest in a top-rated POS system built to handle these unique concerns. Here are seven important features of consignment and pawn shop POS software that will benefit your business.
Consignment shops and pawn shops both deal in inventory that doesn’t belong to the business. For this reason, their POS systems need to have the ability to categorize and track individual items while still connecting them to their original owner. For instance, a pawn shop owner must be able to track any pawned item back to the correct individual.
Unlike traditional retail management solutions, specialized consignment store and pawn shop POS software can separate and categorize inventory based on the originating customer. In the case of a consignment shop, the store needs to know which items belongs to which customer; the inventory is almost always all secondhand and cannot be commingled. In the case of pawn shops, the right POS software can automatically charge the customer interest and return the proper item to its owner. Likewise, these solutions make it easy to sell items and then update customers on the status of their belongings.
When consignment stores sell an item, the POS system should be able to automatically calculate the store’s profits. This task is complex, and many ordinary POS systems aren’t up to the task. Only specialized software can split sales transactions and segregate funds in this manner.
When items in a pawn shop change hands, the originating customer (the person selling the pawned item) needs to be notified. Likewise, when a pawned item comes out of pawn, the inventory needs to be updated instantaneously. Consider the pros and cons of an electronic cash register versus POS to sync a shop’s product and inventory catalog. A POS system not only simplifies the process but also reduces liability risks for the company.
Some POS systems, like those offered by Shopify, can brilliantly handle this unique task, since they are essentially a cloud-based payment network that connects all sales-related aspects of the business and syncs information in real time.
Fraud is a big risk in both pawn and consignment shops. Sometimes stolen goods wind up in the store, and shop owners can have a difficult time verifying the item’s authenticity and origin. This is where a cloud-based POS system out-competes traditional systems, because it can connect with online data sources to automatically authenticate all inventory. Specialized consignment store and pawn shop POS software will offer inventory authentication as a built-in function, centralizing two once-disparate tasks in one location.
When a consignment shop sells an item, the customer needs to know right away. Whether the communication is carried out via emails, robotic calls or alerts for payments due, the POS system in question should be able to handle all communications.
With traditional email, there’s no way to tie into the POS system, so all communication must be done manually. This prevents companies from communicating in real time and adds unnecessary costs over the long term, because additional staff is needed to handle all of the communication. With a cloud-based consignment or pawn shop POS solution, the customer is notified as soon as a sale is made. Likewise, the customer can be notified on a weekly basis as to whether there’s any interest in his or her item(s). These notifications enable customers to make better decisions about their items.
When customers stroll into a pawn shop with hundred-dollar bills, this isn’t always a good thing, especially if those bills are freshly wrapped. Cash payments of $10,000 or more need to be reported to the IRS, and a good pawn shop POS system will automatically generate IRS form 8300 for reporting purposes. Many cloud-based systems can even transmit this data electronically.
As I’ve mentioned before, the business of pawning is not without risks. As with other retail businesses, one of those risks is the handling of stolen goods. Location-specific LE reports for any given jurisdiction should be available from the POS system as a customizable template. This will allow you to generate reports on demand without having to worry about whether or not the forms will be appropriate for your state or county.
While consignment stores and pawn shops do have unique needs, the right POS system can fulfill all of these requirements and more. These seven features will help you know what to look for when purchasing a point-of-sale solution for your business, ensuring that your shop obtains the best consignment and pawn shop POS software available.
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[Image courtesy of Thomas Hawk]