With today's EPOS systems, you can turn the entire transaction into something richer and deeper, something that your customers will appreciate in a wider lifestyle context, and something that delivers a whole lot more value.
This guide reveals the many differences between cash registers and POS systems, designed to help you decide which is the best choice for your retail business.
What is a cash register?
So what, exactly, is a cash register? As the name suggests, at its most basic a cash register is a machine via which you register cash payments at the till. It doesn't connect to an EPOS system – an electronic point of sale system – and it can't readily integrate with other types of retail software, for example, a stock-taking or accounting system. The sheer simplicity of a cash register means it's the perfect all-in-one solution for cash payments, and often for card payments as well via an independent card machine. Modern cash registers also print out customer receipts on paper with an electronic display revealing the data you've entered.
The cash register has been with us for a very long time. The original mechanical version was invented by James Ritty in 1879. Subsequent models were often richly decorated with beautiful etched patterns and ivory and ebony keys. In 1884 paper receipts were added to track purchases and use for accurate bookkeeping. And in 1906 Charles F Kettering added an electric motor. By the time UK decimalisation came along in 1971, the cash register was playing an essential part in most retail outlets. For a few years after decimalisation cash registers that could switch between the old and new currencies were popular. And in 1979 the first-ever point of sale terminal turned up, introduced by Visa to capture electronic data. The rest is history.
What is a point of sale (POS) system
A point of sale system, like an old-school cash register, sits at the point of sale, the place where consumers pay for their purchases and receive a receipt for their payment. It comes with much broader functionality compared to a simple till, much more than a mere machine with an inbuilt cash drawer and integral printer.
A POS system contains several different hardware components, all of which are connected. It comes with a touchscreen display, which could be something as simple as a tablet – if you've seen shop assistants carrying iPads, that's what's going on. There's a cash drawer and a means of printing receipts, plus a barcode scanner and card payment tech. All these talk to each other via EPOS software, which works seamlessly with all the equipment you've chosen.
Like a till, the system's primary job is processing payments. But it also comes with connected business features like an inventory, which keeps tabs on stock levels and automatically updates whenever a product is sold. It outputs real-time reports for you to access from a remote computer, time sheets for staff, a customer database and more. All this means you can manage your retail business more efficiently with a lot less manual work, less risk of mistakes, and more tools to help you analyse how people buy and when, which in turn is useful for pinning down ways to sell more.
Inventory monitoring and management means you can re-order supplies of products in good time before you run out, and always know exactly how much of a given product you have in stock. Customer management software means you can delve into customer records and analyse data to reveal all the interactions your store has had with customers, recording their preferences and tracking their activities. A POS system talks to accounting software, and some systems are so sophisticated they act as a one-stop-shop retail management command centre, handling everything to do with sales, inventory and customer management from end-to-end.
Sales reporting and analytics software means you know what's selling best thanks to data on inventory levels, supply chain movement, consumer demand, sales and more, which is, in turn, vital for making the best marketing, product sourcing and buying decisions. Systems integration joins the dots so the information is relevant and meaningful in context.
Mobile capabilities mean everything these days, offering card swipe to chip and pin payments, Apple pay, PayPal, Google Pay and more, giving you the capability to quickly process every payment method your customers want to use. And the best POS systems even provide extras like loyalty programmes and gift cards, as well as plenty of potential for personalisation.
You can see why POS systems are essential for multi-channel sellers (read more from our blog on Omnichannel retailing) to be able to track and synchronise essential data across multiple store locations, warehouses and fulfilment centres. It's clear that having a central location for the data retailers use to stay on top of all their channels and physical stores comes with many advantages.
As online tech develops and new tech arrives, the future of POS systems is looking bright. Self-checkout facilities are on the cards, for faster purchases than ever before made by customers themselves. Increased personalisation means future systems will be able to enhance the customer experience even further. Smartphone apps, cameras and sensors will ultimately mean there's no need for a traditional check-out.
Before long, POS systems will probably accept crypto-currencies like Bitcoin and Ethereum. Customer data will be even easier to collect and its analysis will become more granular. You'll be able to gather more vital insight about hourly sales and sales of individual products, using the data to spot breaking trends. Call a modern POS system a retail intelligence machine and you won't be far wrong.
Cash register VS. POS System: What are the differences?
So what is the difference between a cash register and POS system? Obviously, a basic cash register costs a lot less than an all-singing, all-dancing POS system, and this keeps the startup costs low. But the features of each system differ radically, as we've mentioned. If you want to start off a new retail business on the right foot for a bright digital future, you might want to invest in a POS system upfront and give the traditional cash register a miss.
POS systems come with many more till features, card payment capabilities, and even VAT calculation. While a cash register doesn't let you put your products into product categories, a POS system does. There's no limit to the number of barcoded products you can add to a POS system. The reporting and analysis functionality you get from cash registers just doesn't compare with the endless complex insights you can get from a POS system, which integrates beautifully with essentials like accounting systems, employee accounts, user accounts, customer accounts, and inventory management.
A cash register simply stores cash in a drawer and lets people checkout. A POS system also helps you run a retail business more efficiently and effectively. POS systems let you manage inventory easily, collect and store customer data, run reporting and analytics on sales, inventory, customers and more, and create promotions. It's both portable and flexible, running on different devices including Macs, iPads and PCs. And you can integrate essentials like accounting software, an eCommerce platform, marketing automation software, Enterprise Resource Management and more.
Cash register or POS System: Which is right for your business?
So what's your best choice? A point of sale system is an investment. It'll cost more than a cash register but the extra features and functionality will probably save you a great deal of time as well as supporting faster business growth. No wonder so many businesses say their POS solution easily pays for itself. But at the end of the day, it depends on your business needs.
It's a good idea to ask yourself which payment types your business accepts. If it's 'only cash and cards', a cash register might be all you need, at least in the early days. If you have a lot of different products and product categories to keep track of, a basic cash register isn't going to help. But if you need to provide several till positions, a POS system may prove better value than having to buy multiple cash registers that can't talk to each other.
If you want to provide customer account facilities a POS system will deliver the goods, but a cash register won't. The same goes for customer loyalty schemes. Which systems do you need to integrate? A cash register won't let you integrate much if anything at all. Last but far from least, what are your future plans for the business? If you want to stay small and simple, a cash register could prove perfect. If you have growth in mind, fitting a POS system from the offset might be more sensible, future-proofing the business while it grows and scaling up as you expand.
Why Choose a Cash Register?
A cash register comes with lower setup costs and no ongoing fees for software. It is designed to primarily accept cash payments and if you don't need to get to grips with business integration, it's ideal. This is your simplest solution of all, so could be a good idea for testing a start-up retail business when your budget is limited. You can always upgrade later.
Why Choose a Point of Sale (POS) System?
When you want to integrate sales with essentials like inventory, POS wins. It allows for seamless background inventory tracking and reporting and lets you add a really large inventory containing multiple products and categories. When you want to get more out of each and every customer, POS lets you quickly, easily develop powerful customer account personalisation. POS offers brilliant reporting and analysis capabilities and it's an excellent way to future proof payment systems.
At KFP, we have a great deal of experience and expertise in retail IT systems. If you'd like to talk things through with a professional we'll be delighted to help. Feel free to contact us. We even provide reliable, fast, expert EPOS installation services.