1. Despite the growth of e-commerce, many retailers derive a large percentage of their sales from physical stores. Therefore,
retailers are constantly looking at ways to optimize their store operations to stay competitive and enhance their brand
value. Utilizing mobile point-of-sale (POS) technology is an emerging trend in the retail industry.
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Mobile Point-of-Sale Technology: What are the Key Risks?
Chris Kalafatis, Manager | Advisory Services
There are many different types of mobile POS technology.
Some retailers, such as grocers, have implemented self-
checkout devices that customers use to pay for merchandise
without store employee interaction. Other retailers with large
stores are leveraging handheld devices or tablets that enable
store employees to process customer purchases anywhere
on the sales floor.
Some of the advantages of utilizing mobile POS technology
include:
• Quicker purchases for customers
• Unique technologies to differentiate retailers from their
competition
• Reduced labor costs
• Enhanced customer purchase decisions since inventory
levels and detailed product specifications can be
checked on the sales floor
Key Risks
While there are advantages of leveraging mobile POS
technology, there are several key risks that should be
considered, including:
Theft/merchandise shrink – Customers may process their
own transactions with mobile technology with minimal
amount of monitoring by store employees. Additionally,
if store employees use tablets or other handheld devices,
security cameras may not capture transactions that occur
throughout the sales floor. Therefore, shrink may increase
unless controls are put in place to mitigate these risks.
Customer service and privacy – If purchases are
processed on the sales floor, retailers may need to consider
implementing processes such as exit inspections to ensure
that customers leaving the store with merchandise have paid
for the items. If not part of a traditional culture as it is for
warehouse clubs, this may appear invasive for customers.
June 2015

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Additionally, customers may have concerns about the
privacy of personal information or credit card data that may
be collected by handheld devices or tablets. There may be
a perception that such data collected by store employees on
handhelds or tablets would more easily be compromised due
to the mobility of these devices as compared to larger POS
terminals that are often stationary at the primary cash register
area of the store. Training store employees on the proper
response to these types of customer concerns is imperative.
Device functionality – Procedures must be implemented
that outline what actions must be taken when the technology
fails. For example, receipts may not print, certain types of
product may not scan. Such failures could leave a negative
perception for customers.
Store employee training – Employees will require training on
how to use new mobile POS technology. There may be some
employees that resist this technology and any new operating
procedures that are created.
Lost sales – Customers may not make a purchase if they
get frustrated with self-service POS technology. Also, sales
may decrease for high margin last minute purchases, such as
candy, often stocked near primary cash registers.
It is critical that all relevant stakeholders are involved in
decisions to implement mobile POS technology to ensure
these key risks are addressed. Relevant stakeholders often
include Loss Prevention, Store Operations, Information
Technology, Merchandising and Human Resources. Forming
a project committee with representatives from each of these
areas is also a best practice to ensure open communication
amongst all relevant stakeholders.
Summary
Mobile POS technology is a growing trend for retailers
and provides several benefits. However, retailers must
also be aware of the risks related to implementing these
technologies. Relevant stakeholders must carefully
consider what mobile POS technologies to use, how
they will be used, and what processes and controls need
to be developed or modified.
Chris Kalafatis, CPA, CIA, CFE
Manager | Advisory Services
804.307.2610
chris.kalafatis@dhgllp.com