Unit 6 IGCSE Computers in the Retail Industry

1. www.permatabangsa.com
IGCSE ICT 0417
Gr 10
6.9 Computers in the retail industry

2. Syllabus for Assessment 2023 - 2025
Computers in the Retail Industry
Computers in the retail industry • Characteristics and uses of computers in the retail
industry including point of sale (POS) terminals and
electronic funds transfer at point of sale (EFTPOS)
terminals
• Point of sale (POS) terminals including updating stock
files automatically and ordering new stock automatically
• Electronic funds transfer at point of sale (EFTPOS)
terminals including checking of the validity of cards, the
use of chip and PIN, the use of contactless cards, the
use of Near Field Communication (NFC) payment,
• the communication between the supermarket computer
and the bank computer
Internet shopping Characteristics, advantages and disadvantages of internet
shopping

3. Computers in the Retail Industry
Barcodes now appear on most products sold in shops. They allow
quick identification of product details once the barcode has been
scanned by a barcode reader. Supermarkets, in particular, use point-
of-sale (POS) terminals which incorporate a barcode reader to scan
the barcode and retrieve the price of the article. It also relays
information back to the computer system allowing it to update its files.
Barcodes are made up of alternating dark and light lines of varying
thickness. A number underneath the barcode usually consists of four
parts: a country code, manufacturer’s code, product code and a
check digit.
The check digit is a form of validation which is used to make sure no
errors occurred during the reading of the barcode.

4. gs1id.org

5. The following sequence shows how barcodes and POS
terminals are used in the automatic stock control system:
» Barcodes are attached to all items sold by the
supermarket.
» Each barcode is associated with a stock file which
contains details such as price, stock levels, product
description – the barcode will act as the primary key in the
file.
» A customer takes their trolley/basket to the POS terminal once
they have completed their shopping.
» The barcode on each item is scanned at the POS – if the
barcode cannot be read, then the EPOS operator has to key in the
number manually.
» The barcode is searched for on the stock file until a match is
found.
» Once the barcode has been found, the appropriate record is
accessed.
» The price of the item is then found and sent back to the POS
together with a product description.
Barcodes are used in the automatic control of stock
levels in a supermarket.

6. The following sequence shows how barcodes and POS
terminals are used in the automatic stock control system:
» Barcodes are attached to all items sold by the
supermarket.
» Each barcode is associated with a stock file which
contains details such as price, stock levels, product
description – the barcode will act as the primary key in the
file.
» A customer takes their trolley/basket to the POS terminal once
they have completed their shopping.
» The barcode on each item is scanned at the POS – if the
barcode cannot be read, then the EPOS operator has to key in the
number manually.
» The barcode is searched for on the stock file until a match is
found.
» Once the barcode has been found, the appropriate record is
accessed.
» The price of the item is then found and sent back to the POS
together with a product description.
Barcodes are used in the automatic control of stock
levels in a supermarket.

7. » The stock level for the item is found in the record and is reduced by one and the new stock
level is written back to the file.
– If the number in stock of the item is less than or equal to the re-order/minimum number in
stock, then the computer automatically orders a batch of items from the suppliers (supplier
information would be found on another file called the order file or supplier file – the barcode
would be the link between the two files).
– Once goods have been ordered, the item is flagged on the file to indicate an order has
been placed; this now prevents re-order action being triggered every time this item is
scanned until the new stock arrives.
– When new goods arrive, the barcodes on the cartons will be used to update the stock files;
also any flags associated with these goods will be removed so that the stock checks can start
to be made again.
» The above procedure is repeated until all the items in the customer’s basket/ trolley have
been scanned.
» When all the items have been scanned, the customer is given an itemised bill showing a list
(with prices) of everything they have bought.
» The computer also updates the files containing the daily takings.
» If the customer has a loyalty card, the system will also automatically update their points
total.

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When payment is made by card or electronic device (such as a
mobile phone) at the POS terminal, it is known as electronic funds
transfer at the point-of-sale (EFTPOS).
The process of checking credit and debit cards at a supermarket
EFTPOS is much the same as described for paying a restaurant
or Indomaret bill. The communication between the supermarket
EFTPOS terminals and the bank take place through a secure
connection over the internet.
We will consider payment by the following
methods:
» chip and PIN
» contactless cards
» near field communication (NFC) devices.

9. Chip and Pin
In the case of payment at a supermarket, this is
usually done by inserting the card into a reader and
the reader makes a connection with the chip
embedded in the card.
By entering the PIN, a customer is carrying out a
security check.
The PIN and encrypted data from the chip is now
sent to the customer’s bank.
If all security checks are OK (for example, a check
whether the card has been stolen and a check
whether the expiry date has been exceeded) and
the customer has sufficient funds, then an
authorisation code is sent back to the terminal and
the funds are transferred to the supermarket’s bank.

10. Advantages and Disadvantages of EFTpos
Advantages of EFT
» It is a very secure payment method.
» It is a very quick payment method.
» It is less expensive than, for example, using cheques.
» The customer has the right to dispute an EFT payment for up to 60
days. (In the UK. If Indonesia, you need to check on that yourself)
Disadvantages of EFT
» Once an amount has been transferred the bank cannot reverse a
transaction (requires a full dispute investigation).
» The customer needs to have funds available immediately (unlike when
using a cheque).
» It cannot guarantee the recipient (someone with a fake ID could collect
the money). **REMEMBER Unit 2 - Advantages and Disadvantages
of Chip and Pin Reader

11. The use of contactless card payments
was discussed in Unit 2, together with
their advantages and disadvantages.
More info = t.ly/qOaM

12. Near field communication (NFC) devices
Near field communication (NFC) technology we have already discussed :-)
(Remember the Amazon Shop video)
When using NFC payment at a POS terminal the sequence of events taking place is:
» The electronic device (for example, mobile phone) is held close to the NFC reader (the
terminal); this only works up to a distance of 5 cm, so the devices need to be very close
together.
» When the NFC (contactless) payment is initiated, the NFC terminal and electronic device
(smartphone) pass encrypted data back and forth to each other to enable the payment to be
made.
» This is very secure because NFC communications are encrypted and are dynamic (which
means encrypted data being shared changes every time a transaction takes place).
» Mobile phone manufacturers use tokenisation to improve security.

16. Use of tokenisation with mobile phones
Tokenisation is used when setting up a mobile wallet.
• The user takes a photograph of their credit card using the smartphone’s camera.
• The details on the card (such as card number and name of bank) are securely
sent by the smartphone manufacturer/mobile wallet company to the bank that
issued the card.
• The bank replaces the details on the card with a series of randomly generated
numbers (called tokens), which they send back to the mobile phone manufacturer,
who then programs this random number into the user’s smartphone.
• This random number is then the one used for transactions.
• This means that retailers or other third parties involved in mobile wallet
transactions never have access to real credit card details – if their systems are
hacked then the stored credit card details are not the real ones and therefore
useless to the hackers.
Many smartphones are also protected by touch ID or face ID technology, which means that even if
the smartphone is stolen, the thief still cannot use the smartphone to make payments.

17. Internet Banking & Shopping
Online shopping and banking means that more and more people are staying at home to
buy goods and services, manage their bank accounts and book holidays, etc. This can
all be done using a computer connected to the internet and some form of electronic
payment (usually a credit or debit card). The following notes give a comprehensive list of
the advantages and disadvantages of using the internet to carry out these tasks.

18. Internet Banking and Shopping
Using internet banking requires good online
security. It allows the management of a bank
account online, including the transfer of sums of
money between accounts, payment of bills,
ordering of statements, and so on. This is of
particular benefit to people who are unable to
visit banks during their normal opening hours or if
travelling to the bank is difficult. There are many
advantages of internet banking, but there are
disadvantages too. As the amount of online
shopping and banking increases, the positive and
negative impacts on society become clearer.

19. » There is no longer a need to travel into town centres, thus reducing costs (money for fuel, bus
fares, etc.) and time; it also helps to reduce town centre congestion and pollution.
» Users now have access to a worldwide market and can thus look for products that are cheaper;
this is obviously less expensive and less time consuming than having to shop around for goods or
services in person and they will also have access to a much wider choice of goods.
» Being able to access any shop or bank without the need to leave home may be of benefit to some
people with disabilities and elderly people.
» Because it is online, shopping and banking can be done at any time on any day of the week (i.e.
24/7) – this is particularly helpful to people who work during the day as the shops and banks can
often be closed when they finish work.
» People can spend more time doing other things, for example, going shopping to the supermarket
probably took up a lot of time; by doing this online (and being able to set up repeat items) people are
now free to do more leisure activities.
» Similarly, paying bills in person or by posting cheques was time consuming – now this can be done
simply and easily using online banking.
» Many people find it less embarrassing to ask for a bank loan using the internet rather than
enduring a face-to-face discussion with bank staff.
» There are often long queues at the banks so internet banking saves time.
» The shops and banks save money by not having as many staff working for them (reduced wage bill)
or needing as many high-street premises (reduction in rental costs) – these savings may be passed
on to the customer in the form of lower interest rates, cheaper goods or higher rates of interest for
savers.
advantages of online shopping and banking
Because there is
considerable
overlap between
the advantages
and disadvantages
of online banking
and online
shopping, these
are both
considered
together here

20. » There is the possibility of isolation and lack of socialisation if people stay at home to do
all their shopping and banking.
» There are possible health risks associated with online shopping or banking because of
lack of exercise; if people physically go shopping then they are getting some exercise.
» Security issues are a major concern (for example, hacking, stealing credit card details,
etc.) as are viruses and other malware (for example, phishing, pharming, and so on).
» Accidentally using fraudulent bank or shopping websites is always a risk and this is
linked to security issues.
» It is necessary to have a computer and to pay for the internet to take part in online
shopping and banking.
» Unlike high-street shopping, it is only possible to see a picture of the goods, (which
might not portray the exact colour of an item of clothing, for example) and nor can you try
something on to see if it fits before buying them; you also have to wait several days for
the goods to arrive and returning goods may be expensive and time consuming.
» Next-day delivery of individual items leads to more delivery traffic and pollution.
» High-street shops and banks are closing because of the increase in online shopping
and banking and this is leading to deserted high streets.
» Local independent retailers may lose out to huge multinational retail companies.
» It is easier to make errors with online banking and transfer money incorrectly to
different accounts.
Disadvantages of online shopping and banking
Because there is
considerable
overlap between the
advantages and
disadvantages of
online banking and
online shopping,
these are both
considered together
here

21. Recall earlier this year we discussed
the Effects of IT….
There are also effects to companies
because of online shopping and online
banking.

22. Effects on companies due to the spread of online shopping and banking
Companies and other organisations have also been affected by the
growth of ICT and online shopping and banking. Some of the effects are
listed below:
» Companies can save costs because fewer staff need to be paid and it is
not necessary to have as many shops and banks in high streets to deal
with potential customers.
» Because the internet is global, the potential customer base is increased.
» There will be some increased costs, however, because of the need to
retrain staff and the need to employ more staff in despatch departments.
» There are also costs due to the setting up and maintaining of websites
to enable online shopping and banking.
» Because there is very little or no customer–employee interaction, this
could lead to a drop in customer loyalty, which could lead to loss of
customers (this could also be brought about by the lack of personal
service associated with online shopping and banking).
» Robberies are less likely due to the decrease in the number of high-
street banks.
» Banks also need to employ fewer security staff, which has a cost
benefit.