Retail Cash Registers vs. POS Systems- What's Right For Your Business?

The retail industry has gone through an evolution of inventory and sales tracking methods, from manual counts and reports to cash registers. However, many small businesses now require a solution that offers advanced tools with high functionality and the ability to streamline purchases and generate reports.

Modern POS systems provide several features that automate inventory, sales, and profits tracking, so companies are able to efficiently monitor performance levels. However, business owners should understand the key differences between cash registers and POS systems to determine which solution best fits their needs.

What is a Cash Register?

A cash register is a piece of equipment that calculates sales, records transactions, and secures cash in a locked drawer. Most registers can calculate taxes and generate printed receipts to log each transaction.

This machinery was invented back in 1879 and remains one of the most widely used tools in the restaurant and retail industries. When it was first created, the cash register was meant to prevent employee theft but has since evolved to offer protection against both internal and external risks. While traditional cash registers can only handle cash payments, new electronic models can process credit, debit, and gift cards.

Typically, basic cash registers start at a couple of hundred dollars but can quickly add up with additional features, such as credit card readers, barcode scanners, scales, and other hardware.

What is a Point-of-Sale System?

A point-of-sale (POS) system is a technologically advanced piece of equipment that utilizes software and hardware to streamline transactions. In addition to basic cash register functions, POS systems can generate reports on sales, transactions, inventory, and employees based on extensive tracking. The typical POS terminal consists of several components-

• Touch Screen Monitor

• Card Scanner

• Cash Drawer

• Receipt Printer

• Chip Reader

• Barcode Scanner

• Computer

• Server (if cloud-based)

In the 1970s, traditional cash registers were innovated using computerized features, including card processing and inventory management capabilities, introducing the first POS system. They quickly gained momentum in the '80s and '90s and became essential in the retail business, even to this day. In fact, a study found that the POS industry generated $36.86 billion in 2013 alone, 34% of which was from retailers.

However, POS systems have become highly advanced since the turn of the century, gaining the ability to integrate with other retail tools, such as an inventory management system. Through integration, POS software often acts as a centralized database where staff can access sales data, inventory levels, and performance metrics.

Retail POS solutions are also able to connect stores and warehouses in different locations using cloud-based processing. By syncing data from all centers, companies can efficiently monitor their sales channels.
There are advanced features that POS systems offer to retailers, such as-

• Customer Loyalty Programs

• Gifts Cards

• Targeted Marketing

• Design Customization

• Actionable Insights

• Transaction Automation

• Cloud Accessibility
  

The newest development in the POS industry is the mobile point-of-sale terminal (mPOS). Mobile POS systems allow employees to travel with the terminal to conduct transactions in various locations. This model is ideal for mobile vendors, sales-floor associates, and pop-up shops.

Cash Registers vs. POS Systems

While cash registers and POS systems do share many of the same features, there are specific distinctions that owners should consider before choosing the best hardware for their company. A small business may only need a basic model that handles simple cash transactions, while larger enterprises may require extensive reporting and flexible payment processing.

Therefore, management should consider the following-

• Features and Functionality

A cash register system allows attendants to perform basic transactions and secure cash in a locked deposit drawer. Some models even generate basic reports on sales.

Meanwhile, the POS systems are able to accept multiple forms of payment, manage inventory, and store customer data. By recognizing loyalty members, POS systems can automate email marketing strategies based on customer purchase histories.

These solutions also store all product information, such as location, size, and color, so workers can quickly look up items for customers. All of this data is then integrated to produce detailed reports and analytics on sales, product performance, and stock levels.

• Flexibility

Traditional cash registers are bulky pieces of machinery that remain at the checkout counter. On the other hand, POS systems are lightweight monitors that can be moved around the retail store, enabling employees to offer the best customer service.

Many solutions can even run off of devices that the company already owns, such as tablets and computers. This flexibility allows management to easily rearrange the store layout.

• Integrations
  

While cash registers can only connect with payment processors, POS systems are able to integrate with other software to optimize data sharing. Many retailers integrate their POS solutions with accounting, e-commerce, marketing, inventory, and scheduling software.

This adaptability enables businesses to make data-driven decisions with real-time information. It also eliminates the need to manually consolidate information, which can result in human errors and discrepancies.

• Cost

Businesses that only handle cash sales with small budgets can usually operate with simple cash registers. Cash register hardware will usually range from $100-$500. On the other hand, POS systems can cost around $1,000 annually with subscriptions, plus any additional features or hardware.

However, companies that are expanding should invest in modern POS systems as these tools have the ability to evolve with the business through software updates and new features. With a user-friendly interface, the best POS solutions offer reliable tracking, reporting, and robust functionality to help management make data-driven decisions.


The retail cash register has made leaps and bounds over the last few decades, providing business owners with advanced tools that streamline transactions. With modern POS systems, retailers can take this a step further by analyzing sales, income, and profits.