There's a lot more to selecting a till than most people realize. Today's business owners have to not only choose between traditional cash registers and digital point-of-sale (POS) systems, but also navigate confusing terms and setups that require add-ons for full transaction functionality.
This guide breaks down the types of checkout options available for brick-and-mortar businesses, defines some standard terms, and outlines the research process so you can get the best fit for your small business.
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What is a cash register?
A cash register is a stand-alone device with a cash box, adding machine and receipt printer. Most cash registers can connect to barcode scanners and credit card terminals to accept card payments.
Cash registers offer different capabilities depending on the price point, but most let you calculate tax, tips and discounts. They also let you process returns, track inventory, run daily sales reports and connect to external hardware.
If you need to ring up sales, complete payment transactions, store money and print out receipts only, a register system may be enough for your business.
Costs of cash registers
Cash register costs vary depending on their features and functionality.
Low-end cash register costs
Inexpensive cash registers cost between $100 and $300. Registers in this price range are typically traditional keypad desktop designs with attached cash drawers and built-in thermal receipt printers.
These machines offer users a great price point and excellent longevity, but they fall short when it comes to digital integration or reporting. When registers like these are used in foodservice, waiters still have to submit tickets the old-school way.
Midrange cash register costs
Midrange cash registers are available for $300 to $600. In this price range, you'll see mostly keypad designs and some touchscreen options, but you'll also find high-speed, built-in thermal printers and lots of specialized registers (like ones specifically for foodservice).
If you run a high-volume operation and go the traditional cash register route, this should be the minimum price range for you.
High-end cash register costs
High-end cash registers blur the line between traditional cash registers and POS systems. In the $700-$1,100 price range, you'll find loads of touchscreen cash registers with built-in inventory and reporting software, barcode scanners, credit card scanners, and online integration options.
If you're spending this much money on a cash register, you should, at the very least, compare the models you're looking at to similarly priced POS systems because the interface is generally better in POS systems. It's also easier to combine and track online (e-commerce) processing and brick-and-mortar (in-store) purchases in one place with a POS system.
Cash register cost considerations
Across the board, cash registers are generally cheaper than POS systems, even if you go for a high-end cash register. The typical reason for this is that everything is included for basic use when purchasing a cash register, and there are often discounts for bulk purchases.
This isn't really the case with POS systems, which usually don't last as long and often require add-on products (such as external printers and credit card scanners) to reach full functionality.
Although the pricing disparity between POS systems and cash registers has narrowed, a traditional cash register still tends to be a cheaper option for small businesses just starting out.
Pros of cash registers
Cash registers have long been an integral part of commerce. POS systems may make checkout easier and have more bells and whistles, but for millions of business owners, traditional cash registers are all that's necessary. Here are some reasons why they remain popular:
- They're cheap and easy to purchase. Cash registers can cost as little as $100, and they're easy to buy. A small business owner can pop into Staples and walk out with a cash register.
- They're easy to use. Using a cash register is pretty straightforward. It doesn't require much training to get comfortable using it.
- They're safe and secure. Cash drawers on electronic cash registers automatically lock and can be accessed only by authorized users. This reduces the likelihood of someone stealing from your till.
- They're a simple solution for small, traditional stores. A register-based system doesn't have as many features as a POS system, but that's perfectly fine for many business owners. A cash register is ideal if you just want to ring up sales and process payments. Business owners who are wary of technology may feel more comfortable with a traditional cash register.
Cons of cash registers
Electronic cash registers have many benefits, but there are also reasons that POS systems are popular. Here are the main cons to consider before you buy a cash register:
- Their capabilities are limited. Cash registers do a good job of ringing up sales, processing payments, printing out receipts, and handling returns and refunds – but that's about it. They have some reporting capabilities, but they don't provide you with a full suite of features or data to help you run your retail shop or restaurant.
- You can lose data. One of the benefits of using a POS system is that your data is saved either in the cloud or on a local server. That's not the case with a cash register. If your cash register breaks or there's a power outage, you may lose data.
- They may require a merchant account. When you use a cash register, you have to open a merchant bank account that will hold payments from your customers. With a POS system, that's part of the software.
What is a POS system?
A POS system (sometimes called a POS cash register) is where your customers make their purchases. It consists of hardware and software that helps you complete sales transactions, run payments and gather and store customer data. POS systems can integrate a wide variety of features to help run your business smoothly, including inventory management, sales reporting, and customer loyalty programs.
When a retailer refers to a POS system, they're usually describing a traditional POS system permanently installed in a fixed checkout location. It can include a single primary terminal with a complete built-in computer that lives at the main checkout counter. Sometimes retailers place POS systems in multiple checkout lines. In specific industries like restaurants, the POS system can be accessed and used by multiple employees in an order placement area.
Many large retailers have been using POS systems for a long time, but as of 2021, 56% of single-store retailers hadn't yet moved to POS systems. For businesses that currently have a POS system, 30% plan to replace their POS software in 2021, and 22% say they will do so within the following year.
POS systems are growing more popular, and a significant driver is a need for retailers to manage the "buy online, pick up in store/curbside" trend due to changing customer preferences since the COVID-19 pandemic.
How do POS systems work?
POS systems consist of two main components: hardware and software. The hardware is a specialized computer with a built-in screen (the POS terminal), and the POS software generally comes preloaded on the system.
The POS system is connected to the internet or a local server. In addition to the POS system basics, most businesses also use other connected devices, such as credit card readers, handheld scanners, receipt printers and cash drawers.
POS system features
POS terminals nearly always have touchscreen interfaces, built-in reporting and inventory software, cloud storage, admin features (like the option to set different permissions for different employees), and integrations with e-commerce stores. The more you spend on these robust machines, the more features you get, and generally, the better the software interface.
The type of POS software you need will depend on your business. Some systems let you integrate information across all your channels and locations into sales, inventory, staffing and financial reports.
Here are some standard POS system features:
- Hardware: POS systems usually have a touchscreen and often come with an integrated or external credit card reader.
- Software: POS system software includes capabilities for customer purchase histories and loyalty management, as well as coupons, discounts and promotions management. POS system software will allow you to run reports on sales by product, location and salesperson. You'll also be able to run financial and business intelligence reports, helping you determine the busiest times of the day and week, the most effective promotions, hottest-selling products, and most efficient employees.
- Employee scheduling and management: POS systems make it easy to schedule and manage your employees and their time-off requests.
- Integration with your accounting system: POS systems can mesh seamlessly with your accounting systems, sharing information automatically, so you don't have to upload and download reports manually.
- Retail POS software systems: POS systems for retail stores allow you to manage inventory by size, color and item. You can also calculate shipping costs; manage barcodes; quickly look up products; and efficiently perform returns, refunds and exchanges.
- Restaurant POS systems: POS systems for restaurants let you allocate orders to the appropriate prep stations in the kitchen and feature open-table management. You can also manage reservations, waitlists, online ordering and delivery options, as well as pre-authorize bar tabs.
POS system costs
Most SMBs should be able to find a POS terminal that suits their needs for between $1,000 and $2,500, but there are specialty models that cost more, with some retailing at more than $5,000 per unit. One significant benefit of a POS system that comes with all the necessary hardware is that it's designed for heavy business use.
Tablet-run POS setups
Some POS systems come with hardware (like a cash drawer, printer and stand) and software but require the purchaser to buy and use their own tablet (usually an iPad). These POS systems typically need to be replaced far more often than those that come with all the hardware out of the box, because one of the main components of these partial POS systems is a consumer product – such as an iPad – which isn't made for heavy use.
These tablet-run POS setups are typically much more expensive than those with a built-in computer, but they work well for some businesses. (We'll explain more about tablet-based POS systems in the next section.)
What are mPOS systems?
An mPOS system is a mobile POS system – a software product that can be loaded onto a compatible tablet that you'll have to purchase separately. Some mPOS systems include card scanners, drawers and printers; in fact, packages that include all these features are often listed under "POS systems," even though they don't include a computer.
More often, though, mPOS systems are offered à la carte. The purchaser buys a tablet stand and software, and then chooses the add-ons that best suit their business. Systems like these typically have easy-to-use interfaces, plenty of customization options and robust reporting.
On the flip side, they rely on the daily use of machines that aren't designed for heavy business use, and since an iPad is usually the compatible device, replacing the screen and computer can be expensive.
How mPOS systems work
The central part of an mPOS system is the software; it's considered to be "software as a service," or SaaS. The software is built to be compatible with mobile devices such as tablets or even smartphones. Sometimes, mPOS software isn't as robust as regular POS software, so it's crucial to ensure the system has the features you need.
mPOS systems can accept payment by manually keying in customers' card information; however, connecting the mPOS system to a mobile credit card reader is cheaper and more efficient. Mobile card readers usually connect to the tablet or phone via Bluetooth, but some plug into the headphone jack (Android) or charging port (iOS).
mPOS system features
mPOS systems have many of the same features as traditional POS systems.
- Main hardware: mPOS systems usually require a tablet, such as an iPad or proprietary tablet, or a mobile phone.
- Stand: An optional hardware feature is a stand integrated with the screen or used with a tablet.
- External hardware: Some mPOS systems also include an external mobile credit card reader and an external receipt printer.
- Software: mPOS system software will let you enter the credit card information manually. While functionality varies, at a minimum, you should have access to customer data, reporting and product information. mPOS systems may integrate with more robust POS software if your business has such a system.
mPOS system benefits
There are numerous benefits to investing in an mPOS rather than a cash register or POS. Some SMBs choose mPOS systems for their size and appearance alone. mPOS machines are much smaller than traditional POS terminals or cash registers, and many entrepreneurs feel that an iPad checkout fits their overall image.
People who operate pop-up stores, run food trucks or sell their wares at changing locations (like street fairs or festivals) opt for mPOS almost exclusively due to the portability and quick setup.
Another reason for going the mPOS route is to decentralize the checkout process. Some brick-and-mortar stores and restaurants are changing how customers order and pay by having all the waitstaff or sales associates carry mPOS tablets with credit card scanners attached. The ability to link multiple mPOS devices to communicate seamlessly can speed up table service, shorten checkout lines and improve employee accountability (since each person has their own tablet).
A few early adopters on the smart dining scene are taking things one step further and placing tablet terminals at each table so customers can place their own orders.
The primary considerations of choosing an mPOS system are price and replacement costs. Many SMBs start with one centralized POS or mPOS terminal and then gradually add satellite tablets. If this approach appeals to you, make sure any POS or mPOS system you purchase can be used with other mPOS tablets. Also, ask the company if there will be additional fees for more devices, as is often the case.
Researching your options
Once you've set a budget and chosen the overall type of counter solution you want, it's advisable to compare the features of at least three different models from three well-known manufacturers. These are the features you should focus on:
- Future costs: Are you considering opening another register area, adding handheld tablets to your business or opening another location? Even if this isn't in the works yet, it's always good to find out right away how much it will cost to add more devices to your lineup. You should also inquire about the costs for additional credit card scanners, barcode scanners or any other external accessories you may require.
- Interface: For keypad cash registers and touchscreen POS systems alike, the interface matters. If possible, get hands-on experience using any checkout machine you're considering. If that's not possible, request a demo. Consider how intuitive the interface is, customization options, whether it has the security and administrative features you need, and, above all, how easy it will be for employees to learn and use. A system that's hard to navigate can cause employee misuse, time inefficiency and unnecessary frustration.
- Physical setup: Unless your space is unlimited, measure the exact amount of space you'll have for your checkout counter setup. Envision not only where you'll put the desktop machine, but also where you'll store scanners, external printers, keyboards, cash boxes and anything else you plan on having. As you browse different register and POS models, check the spec size on each of them.
- Integrations: If you opt for a basic cash register and aren't worried about integrations, you can skip this altogether, but if you plan on integrating your checkout system with your online store or using it in tandem with other software, make sure the product you choose is compatible.
- Reports and exports: If you get a POS or mPOS, how it reports and exports information is a huge factor to consider. For example, do you want to export inventory data to a third-party system or pull a specific report about employee behavior? Make sure you fully understand any POS software's reporting and exporting options before committing to the product.
Choosing between a cash register, POS and mPOS
When choosing between a cash register, POS and mPOS, consider your business as it is now and as it will be in the future. What that looks like will dictate which device is best for you.
A cash register makes the most sense for these cases:
- Businesses that are just starting out and short on capital
- Established businesses that need to ring up sales, accept payments and print receipts only
A POS system makes sense for these cases:
- Businesses that want a system that not only rings up sales, but also tracks and manages inventory and helps with customer and employee management
- Retailers and restaurant owners with multiple sales channels, both online and offline
- Businesses that have several locations or need more than one register
An mPOS system makes sense for these cases:
- Businesses that want to process payments outside of a physical store, such as at an event or outdoor market
- Retailers and restaurant owners who want to bring the menu and payment processor to the customers online or tableside
Whether you ultimately choose a POS system, an mPOS system, an old-school cash register or some hybrid setup, be aware that manufacturers have no standardization for what's included in a register, POS device or POS software. Ensure you know precisely what's included and what isn't, how much the peripherals cost, and what you can expect in terms of performance and ease of use.
Mona Bushnell and Donna Fuscaldo contributed to the writing and research in this article.