Cash Registers vs. POS Systems: How to Tell Which Is Right for Your Retail Biz

Cash Registers vs. POS Systems: How to Tell Which Is Right for Your Retail Biz

Most thriving retail businesses process many transactions daily, sometimes thousands. To handle that kind of volume, brick-and-mortar businesses need to arm themselves with the tools — both hardware and software — to keep operations running smoothly.

The heart of a retail business? The point-of-purchase, cash register, or point-of-sale (POS) system. While many may use those terms interchangeably, they’re not the same. Many key differences would affect which route you go for your retail business. Let’s dive into what the traditional cash register is, what a Retail POS system is, and how they’re different — plus how you can choose which option most suits your business.


What is a cash register?


The official definition of the term “cash register” is “a business machine that usually has a money drawer, indicates the amount of each sale, and records the amount of money received.”


A cash register logs transactions that occur in your store, creating a record of the money coming in and going out. It can also calculate and add taxes, generate receipts, and offer basic sales tracking. Many major grocery stores and department stores use cash registers.

The cash register was first invented back in 1879 by whiskey, wine, and cigar merchant James Ritty as a preventative measure against employee theft. And while we’re willing to bet employee theft was a lot more rampant back then, it’s still a concern for retailers. Employee theft is the second-most leading cause of shrinkage for retailers, according to data by the National Retail Federation.


Cash registers have come a long way since their early iterations. Now, we have electronic cash registers that you commonly see in restaurants. While a basic cash register is set up to handle cash transactions, newer ones have more robust options.

Generally speaking, cash registers are only a few hundred dollars in cost, but if you want additional functions like credit card readers, barcode scanners, or scales, then you’ll need to invest in additional hardware.


What is a POS system?


Point-of-sale is defined as “of or relating to the place (such as a check-out counter) where an item is purchased.” Point-of-sale (also point-of-purchase or POS) systems are the mechanisms with which retailers and customers can execute purchases.


A POS is like a cash register on steroids: You can use it to administer cash transactions and do everything that a normal register would do, plus you can gain more detailed POS reporting on those transactions. A POS usually has a touchscreen interface that employees use to administer purchases.


A POS may be comprised of a few components:


  • Touchscreen device
  • Card scanner
  • Chip reader
  • Barcode scanner
  • Computer
  • Server (the Cloud)

POS systems were introduced in the 1970s, when cash registers evolved into computerized POS terminals that could perform additional functions, like credit card processing and basic inventory management. They gained popularity and became commonplace in retail environments in the ’80s and ’90s. According to Transparency Market Research, the global point-of-sale industry stood generated $36.86 billion in revenue in 2013, 34% of which was claimed by retailers.


Over the years, the POS system has become more advanced. Now, many POS terminals integrate with other retail business tools, such as inventory management, accounting, or warehouse management software. Some are robust enough to act as a retail management command center that handles everything sales, inventory, and customer management.

POS systems are essential for multi-channel sellers, as they can track and sync data across multiple store locations, warehouses, and/or fulfillment centers. They provide a centralized location for data which allows retailers to stay on top of various channels and stores from a single platform. Boston Retail Partner’s 2015 POS/Customer Engagement Benchmarking Survey supports this outlook. According to the study, there will be a 663% increase in retailers with a single commerce platform in 2019.


POS systems also have features for several other components of your retail business, including:


  • Customer loyalty programs
  • Gift cards
  • Marketing
  • Personalization
  • Data for informed business decisions
  • Automation
  • Accessible from the Cloud for mobile business owners

Location: Griffin, GA, USA

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