If you have a checking account at a bank or credit union, you receive a monthly statement showing the account's beginning and ending balances, as well as all the transactions for the month. A transaction type labeled "POS" means that your debit card was used to make a purchase at a point-of-sale location, such as a store's cash register or electronic checkout terminal.
A POS system is a combination of software and devices that merchants use to record and complete sales transactions. Old-style manual cash registers have been replaced almost entirely by these automated systems at checkout registers in stores, restaurants, theaters and everywhere else that accepts debit cards. POS systems accept a variety of payment methods, including cash, checks, money orders, store credits, electronic wallets and payment cards (credit cards, prepaid/gift cards and debit cards). The same systems are used by online merchants.
Using Your Debit Card
You can use your debit card to spend money from your checking account without writing a check or withdrawing the money first. While similar to a credit card in appearance, a debit card has several features that make it unique. The first is that you assign a secret four-digit personal identification number, or PIN, to the card when you first get it. When you use your debit card in a POS transaction, you enter the PIN number on a terminal after you insert the card into the reader. The POS system checks your entry against the PIN stored on the card's chip to validate it. Once validated, the POS uses data on the chip to verify online that your bank account has enough money to complete the purchase, and if so, updates the account with the purchase information. This transaction will appear on your bank statement labeled "POS." Banks label transactions from other types of payment methods differently.
The nice thing about having a PIN on the debit card is that only folks who know the PIN can use the card, making it more secure should it be lost or stolen. The system also keeps you secure from overdraft fees, which is what the bank charges you if your account balance falls below zero. In most situations, the bank will reject a debit card transaction if you don't have enough money to pay the total due. However, if you have agreed to "opt in" with your bank, the bank will advance the money and charge you an overdraft fee for each transaction you make in which you don't have enough funds.
Checking Your Bank Statement
You can check your bank statement every month if you want to verify the activity it lists. Specifically, you can scan for POS transactions to check all instances of your debit card use. If you don't recognize one or more transactions, you can report the problem to your bank for investigation.