What to check in a POS contract before you sign

A POS contract can commit you for years, and most surprises come from a handful of clauses. Go through this list with the real documents in front of you: the quote, the application, the terms of service and any equipment lease.

1. The term

• How long is the initial term?
• When does it start: when you sign, when the equipment is installed or when you start selling with it?
• Do software, processing and equipment share one term, or does each have its own?

2. Renewal and notice

• Does the contract renew automatically? For how long?
• How many days before the end do you have to give notice, and how: email, letter or a form?
• Put the notice deadline on your calendar the day you sign.

3. The early termination fee

• How is it calculated: a fixed amount, the fees left in the term, an amount per device for each month left, or a share of the processing you would have paid?
• Ask for an example in dollars: "If I leave at month 12, with my sales and my devices, how much do I owe?"
• Are there other exit costs, like returning equipment or paying back a discount or an incentive?

4. Card processing

• Do you have to process cards with them? For the whole term?
• How is processing priced: flat rate, interchange-plus, dual pricing or a surcharge?
• Can they raise rates or fees during the term? With how much notice, and is there a cap?
• Is there a monthly processing minimum?

5. Equipment

• Are you buying it, leasing it or getting it on loan?
• If it's a lease, is it a separate contract, maybe with a finance company? Can you cancel it?
• If it's on loan, what happens when you leave? Do you have to return it, and who pays for shipping or damage?
• Will it work with another processor if you switch?

6. Fees beyond the monthly price

• Annual fees, per-device fees, PCI compliance fees, statement fees and inactivity fees.
• Does each handheld or kitchen screen count as a separate device, for fees and for the termination fee?
• Setup, installation, menu programming and training.

7. Charges before you go live

• Do charges start when you sign or when the equipment is installed, before you're up and running?
• If there's a trial period, what do you pay during it, and what happens if you cancel within it?

8. Who pays for card processing

• With dual pricing, a cash discount or a surcharge, your customers pay part of the cost. Make sure it's allowed in your state and set up with the right signs and receipts.

9. Spanish

• Is the contract available in Spanish? If it is, which version is legally binding? Often it's the English one.
• Is support available in Spanish? On which channels, and at what hours?
• Which parts of the system work in Spanish: the screens, the kitchen tickets, the receipts, the back office?

10. Signatures and promises

• Are you signing as a personal guarantor? That makes you personally responsible for the debt.
• Is there an arbitration clause? It usually decides how and where disputes are handled.
• Any promise from the salesperson, like a waived fee, a locked price or an easy way out, has to be in the contract. If it isn't in writing, it doesn't count.
• Keep a copy of everything you sign, including terms linked from a website. Save the version from the day you sign: online terms can change.

Compare each vendor's terms side by side on our contracts and early termination fees page, and estimate your exit cost with the cost calculator.

This guide is general information, not legal advice. If the contract is large or unclear, have a lawyer review it before you sign.