How to Use Square for Retail to Run Your Business

Square for Retail is a point-of-sale (POS) system that helps you manage in-store sales, inventory, customers, and store operations from one platform. You can use it to add products, track stock, process payments, manage purchase orders, and monitor business performance.

Square offers a free plan for basic POS functions, while its paid plans add advanced inventory management, reporting, and team management tools. The features available to you depend on your subscription and the capabilities enabled in your account.

This guide walks you through how to use Square for Retail, from setting up your account and product catalog to managing daily transactions, inventory, employees, and customer relationships.

Getting started with Square for Retail

Once you click the link above and select "Get Started," Square will prompt you through your account creation, including setting a password and linking an email. It will also ask you to fill out a little information about your business and prompt you to download the Square app so you have access to your POS dashboard on the go and can complete mobile sales.

Before you start, decide which Square subscription and hardware your store needs. Square's current US plans are Free, Plus, and Premium. The plans include different inventory, reporting, and team management capabilities.

Square's paid plans include a 30-day free trial. Hardware is sold separately, and additional fees may apply to certain services and add-ons. You can also use Square's retail mode within the Square Point of Sale app. The retail tools available to you depend on your subscription and any advanced capabilities enabled in your account. This means you don't necessarily need to treat Square for Retail as a completely separate POS product.

What you need before setting up Square POS for Retail

Gather the following information and equipment before configuring your account:

• Business name, contact information, and business details
• Bank account information for receiving payment deposits
• Product catalog, including item names, prices, SKUs, and variations
• Inventory quantities and vendor information
• A compatible smartphone, tablet, or Square POS device
• Payment hardware, such as a Square Reader, Terminal, or Register, if you plan to accept in-person card payments
• A receipt printer, cash drawer, and barcode scanner, if needed

You don't need to purchase a complete hardware setup to get started. You can use compatible mobile devices and add equipment as your store's checkout requirements grow.

Create your Square account and choose your retail setup

To create your account:

1. Go to Square's website and select the option to get started.
2. Enter your email address and create a password.
3. Provide your business information, including your business type and location.
4. Complete the required identity and business verification steps.
5. Connect your bank account so Square can deposit your sales proceeds.
6. Choose your subscription and activate the retail features you need.

Once your account is ready, sign in to Square Dashboard to configure your business settings, locations, employees, products, and payment options.

Connect your hardware and configure your register

If you're using a Square Register, Terminal, Stand, or compatible mobile device, download or open the appropriate Square POS app and sign in using your account credentials. Follow the on-screen instructions to connect your payment device and any compatible accessories.

Before accepting your first customer, configure your receipt preferences, tax settings, payment methods, and checkout screen. You can also customize the register with product and category tiles so employees can quickly find frequently sold items.

Setting up your product catalog and inventory

Square for Retail offers inventory management tools that help you categorize and label your products, monitor stock levels, manage vendors, and keep track of merchandise across locations.

Start by building an accurate product catalog. Your item library serves as the foundation for checkout, inventory tracking, purchase orders, and sales reports.

Add products, SKUs, variations, and categories

You can add products individually through Square Dashboard or import multiple items using a spreadsheet. To create an item individually:

1. Sign in to Square Dashboard.
2. Go to Items & Services and open your Item Library.
3. Select the option to create an item.
4. Enter the product name, description, price, and other relevant details.
5. Add a SKU or barcode to help identify the product during checkout and inventory counts.
6. Assign the item to a category.
7. Add variations, such as sizes, colors, or materials, if applicable.
8. Save the item to your library.

For example, a clothing retailer selling a T-shirt in three sizes and four colors can create one product with 12 variations. Each variation can have its own SKU and stock quantity, making it easier to track the exact items available for sale.

Organizing your catalog with consistent product names, categories, and SKUs also makes it easier to search for items, run sales reports, and identify stock discrepancies.

Set up inventory tracking and low-stock alerts

After creating your products, enable inventory tracking for the items you want Square to monitor. This allows the system to update stock quantities as you sell products and receive new inventory.

To configure stock tracking:

1. Open your Item Library in Square Dashboard.
2. Select the product you want to track.
3. Find the inventory tracking settings and enable stock tracking.
4. Enter the starting stock quantity for each variation and location, as applicable.
5. Set a low-stock alert threshold.
6. Save your changes.

Square offers low stock alerts at set quantity levels. These alerts help you identify products that need replenishment before you run out. For example, if you typically sell 10 units of a particular product each week, you might set an alert when only five units remain.

Set different thresholds for fast-moving and slow-moving products. A popular item may need a higher reorder threshold, while a product that sells occasionally may not require as much safety stock.

Some advanced inventory functions, including more extensive stock management, depend on your Square subscription. Check your account's feature availability before building your replenishment process around a particular tool.

Receive stock and adjust inventory

When new merchandise arrives, update your inventory so your recorded stock matches the products physically available in your store. You can receive individual items or update several products in bulk through Square Dashboard or a compatible POS device.

To receive stock in bulk through the POS app:

1. Open your Square POS app and go to Inventory.
2. Select Stock Overview, then Receive Stock.
3. Add products manually or scan their barcodes using a compatible scanner.
4. Enter the quantities received.
5. Review the item details, including unit cost and selling price where available.
6. Confirm and save the stock receipt.

If the quantity received differs from what you ordered, enter the actual quantity received rather than the amount listed on the supplier's invoice. This keeps your inventory records accurate.

You can also adjust stock when items are damaged, lost, stolen, or removed from inventory for other reasons. Record the appropriate adjustment reason so you can investigate discrepancies later.

Count inventory and manage stock across locations

Regular inventory counts help you identify discrepancies between your recorded stock and the merchandise physically available in your store. Square supports two types of inventory counts: full counts and cycle counts.

• Full inventory count: Checks every item in your inventory at a particular location.
• Cycle count: Checks a selected group of products or variations without counting the entire store.

A full count is useful for periodic inventory audits, while cycle counts let you check high-value or fast-moving products more frequently without interrupting regular store operations. Square recommends counting each item variation at least once every 90 days.

To conduct an inventory count:

1. Open the POS app and go to Inventory > Stock Counts.
2. Select Count Stock and choose Full Count or Cycle Count.
3. Scan product barcodes or search for items manually.
4. Enter the physical quantities counted.
5. Review the results and investigate any discrepancies.
6. Submit the count for review and approval, if required.

Be careful when conducting a full inventory count. Square treats uncounted items as having zero stock when the count is finalized. If you only want to check selected products, use a cycle count instead.

For businesses with multiple locations, Square's advanced inventory capabilities can help you monitor stock by location and manage inventory transfers. This is useful when you need to move products between stores or check which location has a particular item available.

Processing sales with Square for Retail

Once your product catalog and register are ready, you can use Square for Retail to handle daily customer transactions. The POS lets you add products, apply discounts, attach customer information, accept payments, and issue receipts from the checkout screen.

Open and close your cash drawer

At the beginning and end of each day, you must perform opening and closing procedures to get your POS up and running and closed for the business day. To start, you or your employees will log in to your POS device using the appropriate login key. Then, if you use cash, you will start by logging your starting cash for the day.

To configure your cash drawer:

1. Go to your POS home screen.
2. Select the menu option to view your settings.
3. Open Settings and select Device Management.
4. Create or select a device from the list.
5. Enable cash drawers and enter the default starting cash amount.
6. Save your changes.

Most businesses will have a set amount of cash that should be in the register at the start and end of the day. If there was a cash transaction during the day, the additional cash from the sale is removed EOD and added to a cash bag, so the drawer can return to its set amount. Having this set amount allows you to notice if cash goes missing, either from offering incorrect change or theft.

At closing, count the cash in the drawer and compare it with the amount Square expects based on recorded transactions. To close your drawer:

1. Open the Current Drawer or cash drawer report.
2. Select End Drawer.
3. Enter the actual cash amount in the drawer.
4. Review any discrepancy between the expected and actual amounts.
5. Select End Drawer to close the session.

Depending on the email notifications you choose, you will automatically receive an end-of-day report when your register is closed for the day.

Menu names and navigation may differ slightly by device and app version, so check your current POS interface when configuring your cash drawer.

Ring up sales and accept payments

If you are just setting up your checkout screen on the Square for Retail POS app, Square will immediately prompt you to add custom tiles for products, categories, or actions that you frequently use when ringing up sales. Each person with an individual login code can customize their checkout screen.

To process a sale:

1. Add a product to the cart by searching for it or scanning it via its barcode.
2. Check the quantities and product variations.
3. Add discounts or loyalty information (if applicable).
4. Add an existing customer to the sale.
5. Charge the customer.
6. Complete checkout.

You will have the option to add a customer to your transaction, which will take you to this form where you can add the customer's information.

Square supports several payment methods, including major credit and debit cards, contactless payments, digital wallets, and other payment options available to your account. You can also accept cash and checks.

The payment hardware you use determines which in-person payment methods are available. For example, a compatible Square Reader or Terminal can accept contactless and chip payments, while Tap to Pay lets eligible devices accept contactless payments without a separate reader.

In addition to the tools above, with Square checkout you can also:

• Save your cart and return to it later: Instead of pressing "Charge" at the end of your transaction, click the three-dot option and select "Save Cart" and return to it later by pulling it from the saved cart list.
• Perform cross-location returns: Let customers buy things from one location and return them at another.
• Perform exchange transactions.

Square also supports offline payments on eligible devices. However, offline transactions have limitations and carry additional risk. Payments must be uploaded after your device reconnects to the internet, and transactions that are not uploaded within Square's required time limit may be declined. Review Square's offline payments requirements before relying on this feature during an internet outage.

Apply discounts and promotions

To avoid employees accidentally offering the wrong discount or promo, you can add specific discounts for them to choose from rather than letting them enter the deals themselves.

There are many different discounts you can create, including discounts for:

• Entire orders
• Orders over a set amount
• Individual products
• Specific product categories
• Set time frames

To create these discounts, head over to your POS dashboard. From there:

1. Select Items.
2. Select Discounts.
3. Select Create a Discount.
4. Fill out the form to create the discount name, percentage, applicable locations, and other settings.

When your employees go to add discounts or scan items with designated promotions, only the discount options you created will be available.

Before activating a promotion, check how it affects your margins. A discount that increases sales volume may still reduce your overall profit if you apply it too broadly or combine it with other offers.

Process refunds and exchanges

With Square's checkout, you can perform refunds, exchanges, and even void transactions.

To issue a refund from your POS:

1. Select Customers from your quick tiles or the menu on the left-hand side of your checkout screen.
2. Search for and select the customer who is making the return.
3. Click Activity to access their transaction history.
4. Select the transaction you are processing the return or exchange for.
5. From the three-dot menu, select Issue Refund.
6. Select the items you want to refund. Or, choose the Refund Amount option to type in an amount directly.
7. Review the refund details and choose the appropriate inventory action.

If you're returning a sellable item to your shelves, select the option to restock it. If the product is damaged or cannot be resold, leave it out of available inventory. You can also issue the refund as store credit or add replacement items to the cart when processing an exchange.

Always follow your store's return policy when processing refunds. Record the reason for returns where possible so you can identify products with unusually high return rates.

Managing orders and purchasing inventory

Square lets retailers manage inventory purchasing and online orders through their Dashboard and POS app. These functions help you coordinate incoming merchandise with customer orders and keep stock records up to date.

Create and manage purchase orders

Purchase orders help you track products, manage vendors, and receive inventory through Square Dashboard or the POS app. You can select products from your existing item library or manually add new item details.

Purchase order availability depends on your subscription. Square for Retail Plus and Premium subscribers can use purchase orders. Square Plus and Premium subscribers can also access them when the required advanced inventory capabilities are enabled.

To create a purchase order through Square Dashboard:

1. Sign in to Square Dashboard.
2. Go to Items & Services > Inventory Management > Purchase Orders.
3. Select Create.
4. Enter the vendor name, delivery location, expected delivery date, and other order details.
5. Select products from your item library or scan their barcodes.
6. Enter the quantities and review item costs, taxes, and other charges.
7. Add the vendor's email address and any notes.
8. Preview the purchase order, then send it or save it as a draft.

You can also create purchase orders from the POS app:

1. Open the app and select Inventory.
2. Choose Purchase Orders, then Create Purchase Order.
3. Select an existing vendor or create a new one.
4. Search for or scan the products you want to order.
5. Enter the quantities and review the order details.
6. Save the purchase order and send it to your vendor.

When your shipment arrives, open the purchase order and select the items received. You can receive the entire order or enter partial quantities if the vendor delivers only part of the shipment. Record damaged or unfulfilled items separately rather than adding them to available stock.

Square also lets you record additional costs, such as shipping and handling, when receiving a purchase order. These costs can be allocated across the items in the order and included in your cost of goods sold reporting.

Keep in mind that Square currently limits a purchase order to 500 unique items and does not support decimal quantities for ordering or receiving.

Receive and fulfill online orders

You can sell online and manage orders directly from the Orders section of your online Square Dashboard. Square can also notify you of new orders through the POS app, depending on your notification settings.

To fulfill an order:

1. Open the order you want to fulfill.
2. Select Mark in Progress to let customers know you are working on their item.
3. Prepare the item for fulfillment.
4. Select Mark as Ready when preparations are complete.
5. Complete the order according to the customer's selected fulfillment method.
6. When your customer acquires their order, mark the order as Complete, and it will move off your orders dashboard.

Square supports several fulfillment methods, including local pickup, delivery, curbside pickup, and shipping. The options available depend on your Square Online configuration and the type of order.

Keep an eye on order status and inventory availability, especially when you sell the same products through your physical store and online store. Square's connected sales channels can help synchronize inventory, but you still need to record stock adjustments and handle exceptions such as damaged or unavailable items.

Managing employees and store operations

If you have employees handling checkout, inventory, or customer service, configure their access before they begin using your POS. Individual employee accounts and permissions help you control which tasks team members can perform and provide better accountability for store transactions.

Set up employee permissions and access

Square lets you create employee profiles and assign permissions for different POS and business management tasks. You can give cashiers access to checkout while limiting their ability to change prices, issue certain refunds, or view sensitive business information.

To set up employee access:

1. Sign in to Square Dashboard.
2. Open Staff or Team Management.
3. Select the option to add a team member.
4. Enter the employee's name and contact information.
5. Assign a role or permission set based on their responsibilities.
6. Set up their personal passcode or login credentials.
7. Save the profile and have the employee sign in to the POS app.

Review employee permissions regularly, particularly when someone changes roles or leaves your business. Avoid sharing a single login among multiple employees because individual accounts make it easier to trace transactions and changes.

Track employee hours and commissions

Square's team management tools can help you track employee working hours, breaks, and overtime through timecards. Employees can clock in and out using their assigned passcodes, while managers can review timecard records and prepare payroll information.

Time tracking is available with Square for Retail Free, Plus, and Premium, as well as eligible Square Shifts subscriptions. More advanced scheduling and team management features may require a paid plan.

To track employee hours, assign each team member a personal passcode and enable the appropriate timekeeping permissions. Employees can then clock in and out through the POS app, while managers can review their timecards from Square Dashboard.

If your store pays sales commissions, check the current availability of commission tracking in your Square account and its associated team management features before setting up your compensation process. Feature access and pricing can change as Square updates its subscription structure.

Tracking sales and store performance

Square for Retail offers users reporting in several areas, including:

• Sales data by item or category
• Cost of goods sold (COGS)
• Profit margin reports
• Vendor sales
• Projected profit
• Inventory sell-through and forecasts

Run sales and inventory reports

You can access reports through Square Dashboard. Select Reporting from the main menu, then choose Reports to view available sales, inventory, and business performance data. Select the report you want and specify the date range or other filters before reviewing the results.

Depending on your subscription and enabled features, available reports may include:

• Sales by item or category: Identify your best-selling products and categories.
• Sales by employee: Review sales activity by team member.
• Cost of goods sold: Monitor the cost of merchandise sold during a given period.
• Inventory reports: Review stock levels, inventory value, and product movement.
• Vendor reports: Evaluate purchasing activity and supplier performance.
• Profit margin reports: Compare product costs with selling prices.

Monitor inventory performance and profitability

Analyzing the data from these performance reports can help you identify your business's strengths and areas for improvement. Learn what products are most popular, which salespeople are most effective, what items get returned most often, and more.

Don't limit your reporting routine to total sales. Retailers should also monitor inventory turnover, sell-through rates, gross profit margins, and return rates. These metrics help you understand how efficiently your store converts inventory into revenue.

For example, a product with high sales volume but a low profit margin may not contribute as much to your bottom line as a slower-selling item with a higher margin. Similarly, products that remain in stock for long periods may tie up cash that could be used to purchase faster-moving merchandise.

Review reports weekly or monthly to identify trends and make purchasing, pricing, and promotional decisions. You can also compare sales periods to determine if a promotion or seasonal change had the expected effect.

Managing customer relationships

Square's customer management tools help you collect customer information, track purchase history, and organize shoppers into groups. You can use these records to understand buying behavior, provide more personalized service, and encourage repeat purchases.

Create customer profiles and track purchase history

Every Square for Retail account enables you to collect and organize customer information using Square's Customer Directory, generating customer profiles with shopper-specific details, saving cards on file, segmenting customers into groups, and even viewing reports on repeat visitors.

Either visit the Customers page or add a customer at the POS, fill out the form pictured below, and start learning more about your shoppers.

You can add customers directly through the Customer Directory, during checkout, or after a sale. Depending on the information collected, a profile can include contact details, transaction history, preferences, and loyalty activity.

Use customer groups and filters to organize shoppers based on their purchasing behavior. For example, you could create a group of customers who purchased from a particular product category or haven't visited your store in several months. These groups can help you identify opportunities for targeted promotions and follow-up campaigns.

Only collect information you need for legitimate business purposes. Make sure customers understand how you use their contact details, particularly when sending marketing communications.

Use Square Loyalty and customer marketing tools

Square offers additional customer engagement tools, including Square Loyalty and Square Marketing. These are separate services with their own subscription requirements and pricing.

Square Loyalty lets customers earn points based on purchases, visits, or eligible items. You can choose the rewards customers receive after reaching a particular points threshold, such as a discount, free product, or other incentive.

To create a loyalty program:

1. Sign in to Square Dashboard.
2. Go to Customers > Loyalty.
3. Select Get Started.
4. Choose how customers earn points, such as spending a certain amount or purchasing eligible products.
5. Set the rewards customers can redeem.
6. Choose the locations participating in the program.
7. Review your settings and activate the program.

Square's Customer Directory and marketing tools can also help you organize customers and send targeted email or text campaigns. Available features and message limits depend on your subscription and any additional marketing services you use.

Before launching a loyalty or marketing campaign, calculate the cost of rewards and discounts against the additional sales you expect to generate. A program should encourage repeat purchases without cutting too deeply into your margins.

Frequently asked questions (FAQs)

Bottom line

Square for Retail gives small retailers a way to manage checkout, inventory, purchasing, and customer relationships from one POS platform. Its Free plan provides a starting point for businesses with basic requirements, while Plus and Premium add more advanced inventory, reporting, and team management capabilities.

Before choosing a plan, consider how many locations you operate, how much inventory you manage, and which features your employees need. You should also factor in payment processing fees, hardware costs, and any paid add-ons when estimating your total cost.

If you're ready to manage your store with Square, visit Square for Retail to compare plans and get started.