🛒 Welcome to ICT in Retail!

Hello IGCSE student! In this chapter, we are diving into one of the most common applications of ICT: the retail industry. Every time you buy something—whether it's groceries at the supermarket or a new device online—you are interacting with sophisticated computer systems. Understanding these systems, like the tills and payment machines, is crucial for your exams!

Don't worry if some of the acronyms look intimidating (POS, EFTPOS)—we will break them down into simple, easy-to-understand chunks.

1. Point of Sale (POS) Terminals

The **Point of Sale (POS) terminal** is essentially the computerized cash register you see at the checkout counter. It's the system where the transaction is completed.

What is a POS Terminal?

A POS system includes hardware like the monitor, keyboard, receipt printer, and, most importantly, the **input devices** used for data entry:

  • Bar Code Reader / Scanner: Used to scan the product's unique bar code (like the EAN/UPC). This automatically looks up the price and product details from the central database.
  • Numeric Keypad: Used to manually enter product codes if the barcode won't scan.
  • Touch Screen: Often used by staff to select non-barcoded items (like fresh produce).

Stock Control and Management (The Key Purpose)

The most important function of the POS system (other than collecting money) is managing the store's inventory. When an item is scanned and sold, two major automated processes happen:

(A) Updating Stock Files Automatically

When you scan a tin of beans:

  1. The POS terminal sends the product code to the central store computer (server).
  2. The central computer finds the corresponding record in the **stock file** (inventory database).
  3. The field for "Quantity In Stock" is automatically reduced by one.

Key Takeaway: The system keeps a real-time, accurate count of everything in the store, without anyone manually counting shelves.

(B) Ordering New Stock Automatically

Retail stores set a minimum number of items they must always have in stock. This is called the **re-order level**.

Step-by-Step Automatic Ordering:

  1. The stock level of a product drops below the pre-set **re-order level** (e.g., if we only have 10 boxes of cereal left, and the level is set to 12).
  2. The central computer automatically generates an **order request**.
  3. This order request is sent to the supplier or warehouse computer.
  4. The system updates the stock file to show that an order is pending, and when the new stock arrives, the count is increased again.

Quick Review: POS Benefits

  • Faster checkout times (less queuing).
  • Fewer human errors in pricing (price is stored electronically).
  • Accurate, real-time stock control.
  • Automatic identification of fast- and slow-selling products.

2. Electronic Funds Transfer at Point of Sale (EFTPOS)

The **Electronic Funds Transfer at Point of Sale (EFTPOS)** terminal is the device that handles card payments. It acts as the secure bridge between the customer's bank and the retailer's bank.

EFTPOS Security Features

EFTPOS terminals rely on several technologies to ensure transactions are safe:

  • Checking the Validity of Cards: The terminal communicates with the bank to check if the card is active, not stolen, and if the customer has sufficient funds (a balance check).
  • Chip and PIN: This is a high-security method. The chip stores encrypted data, and the **PIN** (Personal Identification Number) provides a second layer of verification, proving the person using the card is the legitimate owner.
  • Contactless Cards and NFC:
    • Contactless Cards: Allow quick payments for small amounts by tapping the card on the reader.
    • Near Field Communication (NFC) Payment: This allows customers to pay using a smartphone (e.g., Apple Pay or Google Pay). The phone acts as a secure, virtual card. NFC uses short-range radio waves to communicate payment details.

Did You Know? NFC works over very short distances (usually 4cm or less), which makes it highly secure because the device must be almost touching the terminal to work.

The Communication Process: Supermarket to Bank

The transfer of money isn't instant—it follows a strict path between two computer systems:

Scenario: A customer buys \$50 worth of goods using a debit card.

Step 1: Authorization Request (Retailer to Bank)
The EFTPOS terminal sends an encrypted message through the supermarket's computer network to the retailer's bank, requesting authorization for a \$50 withdrawal.

Step 2: Customer Bank Check (Retailer Bank to Customer Bank)
The retailer's bank forwards this request to the customer's bank. The customer's bank checks:

  • Is the card valid?
  • Is the PIN/signature correct? (If required)
  • Are there enough funds (\$50) available?

Step 3: Authorization Response (Customer Bank back to Terminal)
If everything checks out, the customer's bank sends an 'Approved' message back down the chain to the EFTPOS terminal.

Step 4: Transaction Complete
The terminal confirms the payment to the customer and prints a receipt. The central store computer is notified that the money is now in the process of being transferred.

Quick Memory Tip: Think of EFTPOS as a secure messaging system: *Terminal asks permission -> Bank checks account -> Bank sends confirmation.*

3. Internet Shopping (E-commerce)

Internet shopping, or **E-commerce**, involves buying and selling goods and services over the internet. This application has fundamentally changed how the retail industry operates.

Characteristics of Internet Shopping

  • 24/7 Availability: Stores are open around the clock, worldwide.
  • Global Reach: Retailers can sell to customers anywhere in the world.
  • Digital Catalogue: Products are displayed using images, detailed descriptions, and video (unlike a limited physical store display).
  • Secure Transactions: Payments are made using secure protocols like **HTTPS** (using SSL/TLS encryption) and often involve payment gateways like PayPal or banking services.

Advantages of Internet Shopping (For the Customer)

As a student, you probably use these benefits every day!

  • Convenience: Shopping can be done from home at any time.
  • Wider Choice: Access to a massive range of products not limited by local store capacity.
  • Price Comparison: Easy to compare prices instantly using comparison websites.
  • Disabled Access: Easier access for those with mobility issues who cannot easily visit physical stores.

Disadvantages of Internet Shopping (For the Customer)

There are also downsides to buying things sight unseen:

  • Shipping Costs and Delays: Items take time to arrive and delivery often costs extra.
  • Inability to Examine: You cannot physically touch, try on, or inspect the product before buying.
  • Security Risks: There is a risk of providing personal or credit card details to insecure or fraudulent websites (phishing/card fraud).
  • Need for ICT Skills: Requires the user to have internet access and basic computer literacy.
  • Returns Hassle: Returning unwanted items can be complicated and costly.

Common Mistake to Avoid: When discussing the security of internet shopping, remember to mention protocols like **HTTPS** and the need for **encryption**. Simply saying "it's secure" is not enough detail!

Quick Review: Computers in Retail

POS

Handles the transaction and automatically updates **stock files** and generates **re-orders**.

EFTPOS

Handles card payments, checks card **validity**, uses **Chip and PIN** or **NFC**, and communicates with the **bank computer** for authorization.

Internet Shopping

Offers **convenience** and **wide choice**, but introduces challenges like **shipping costs** and **security risks**.