The words that matter most in a POS deal are rarely the ones on the pricing page. Here's what they mean, in plain English.
Contract term
Four contract terms on one calendar
Each glossary term points at its part of the same timeline.
- Term starts. Check if it's the day you sign, the installation or your first sale.
- Contract term: 36 months.
- Leave here: early termination fee (ETF). What you owe if you leave before the term ends. Ask: "If I leave at month 12, how much do I owe?"
- Processing exclusivity. Card payments only with the POS vendor or its partner processor. Some equipment only works with one processor.
- Notice window closes. Give notice before this date, or it renews. Put that date on your calendar the day you sign. Miss it, and you may be committed for another full period.
- The term ends.
- Automatic renewal: +12 months if you don't cancel in time.
Example: A generic 36-month term with a 12-month renewal. It does not describe any vendor. The calendar marks months 12, 24, 36, and 48.
The minimum time you commit to when you sign, usually stated in months. If you leave before it ends, you usually owe an early termination fee. Check when the term starts: the day you sign, the day the equipment is installed or the day you start selling with the system.
Automatic renewal
A clause that extends the contract for another period if you don't cancel in time. The contract sets a notice window: you have to tell the vendor you're leaving a certain number of days before the term ends. Miss it, and you may be committed for another full period. Put that date on your calendar the day you sign.
Early termination fee (ETF)
What you owe if you leave before the term ends. Vendors calculate it in different ways: a fixed amount, the monthly fees left in the term, or an amount per device for each month left. Some formulas also include the processing fees you would have paid. Ask for an example in dollars: "If I leave at month 12, how much do I owe?"
Processing exclusivity
A requirement to process your card payments only with the POS vendor or its partner processor. If your contract has it, you can't move to another processor for a better rate without breaking the contract. Some equipment only works with one processor.
Interchange-plus
A way to price card processing. You pay the interchange fee, which the card networks set and which varies by type of card, plus a fixed markup from the processor, usually a percentage plus a few cents per transaction. It's more transparent than a flat rate, but your monthly cost moves with the mix of cards your customers use.
Flat rate
One price for every card payment, a percentage plus a fixed number of cents per transaction, whatever the card. It's simple and easy to predict. With small tickets, the fixed cents weigh more. With high volume, a flat rate can cost more than interchange-plus.
Dual pricing
Card processing
Three ways to pass on the card cost
$: Cash price · $+: Includes the card cost
Dual pricing
- How it looks: Cash: $ · Card: $+
- What the customer sees: Two prices per item
- Who pays the card cost: Customers paying by card
- Cards it covers: Every card
- Limits: Network and state rules
Cash discount
- How it looks: Posted price: $+ · Cash: $
- What the customer sees: A discount for cash
- Who pays the card cost: Customers paying by card
- Cards it covers: Every card
- Limits: Own rules for signs and receipts
Surcharge
- How it looks: Surcharge: +$ · Total: $+
- What the customer sees: A fee added at checkout
- Who pays the card cost: Credit card payers; you pay on debit
- Cards it covers: Credit cards only
- Limits: Capped; some states ban it
None of the three is free. The processing cost moves to your customers. Check what is allowed in your state before you set it up.
Showing two prices for each item: one for cash and a higher one for cards. Customers who pay by card pay the difference, so the processing cost moves to your customers. The rules for how you must show those prices depend on the card networks and your state. On our site, this cost appears separately, as a cost your customers pay.
Cash discount
A program where the posted price already includes the cost of card processing, and customers who pay cash get a discount. The effect is close to dual pricing: customers who pay by card cover the cost. It comes with its own rules for signs and receipts.
Surcharge
An extra fee added at checkout when a customer pays with a credit card. Card network rules limit surcharges: in general they apply only to credit cards, not debit cards, they have a cap and they require notice to customers. Some states restrict or ban them. Check your state's rules before you add one.
PCI compliance
The security standard for businesses that take cards (PCI DSS). Some vendors charge a PCI compliance fee, or a non-compliance fee if you don't complete a yearly security questionnaire. Ask whether the fee applies and how to avoid the non-compliance charge.
KDS (kitchen display system)
A screen in the kitchen that replaces printed tickets. Orders show up as soon as they're sent, cooks mark them done, and you can track how long each ticket takes. It's often sold as an add-on, priced per screen.
Handheld
A portable device your staff carries to take orders and payments at the table or in line. It can speed up service and turn tables faster. Ask whether it has its own monthly fee and whether it counts as a separate device in the contract, because some fees and exit costs are charged per device.
Online ordering with commission
Online ordering where the platform keeps a percentage of each order. Delivery marketplaces usually work this way. Ordering systems that run on your own POS or website often charge a flat monthly fee or a smaller fee per order instead. With a commission, your cost grows with every order.
Hardware lease
Renting equipment for a fixed period with monthly payments. Over the full lease, you can end up paying more than the equipment would cost to buy, and many leases can't be canceled early. A lease is sometimes a separate contract with a finance company, apart from the POS contract. Ask who owns the equipment at the end.
Loaned or "free" hardware
Equipment the vendor gives you with no upfront cost while you stay under contract. You don't own it. You may have to return it when you leave, or pay for it if you don't. Its cost is usually recovered through the contract term, fees or processing rates.
Total cost over 36 months
Everything you would pay over 36 months: software, hardware, card processing and fixed fees, plus the early termination fee if you leave early. It's the number we use to compare costs, because a monthly price alone doesn't tell the whole story.