POS System Costs & Benefits: A Guide for Restaurant Owners

You often hear the term “POS” in restaurants, but what is a POS system? POS is short for “point of sale,” and it’s a combination of software and hardware that enables restaurants to operate more efficiently.

I’ve worked with POS systems since they were black screens with green type and you had to ring in orders using alpha-numeric codes on a keypad. They’ve come a long way since then. I’ll walk you through what a POS is, the types of restaurant POS systems, their benefits, and key POS features.

What is a POS system?

A POS system is a sophisticated combination of hardware and software designed to help restaurants efficiently organize orders across channels, process payments, and manage various aspects of their business.

It acts as a central hub, handling in-person, digital, and catering orders, and meticulously tracking all transaction types, including cash, checks, credit and debit cards, and digital wallets.

Modern POS systems have significantly evolved from basic cash registers. Today, they typically feature intuitive touchscreen interfaces, robust software, and flexible hardware configurations tailored for the dynamic restaurant environment.

Modern POS systems are available at various price points, with average monthly software fees ranging from $0 to over $400 and hardware expenses from $0 to thousands, depending on system complexity and features.

$0 Starter Kit POS system from Toast

New restaurants, coffee shops, food trucks, and other food service businesses can get up and running with a modern POS system for no monthly up-front hardware or software costs.

The Starter Kit is perfect for single-location establishments that need a countertop or handheld terminal and flat payment processing. Toast’s starter software comes with 24/7/365 support, table and order management, digital menus, an offline mode, mobile payments, and timekeeping for payroll.

Visit Toast

How does a POS system work? Key features

The best restaurant POS systems work by allowing front-of-house (FOH) workers and wait staff to take and customize orders, and accept a variety of payment methods, at the counter or tableside. Digital displays make it easy to accurately record substitutions and allergies.

Once orders are submitted, they ring up on a digital kitchen display or on a receipt printer in the kitchen or prep area. Their digital, portable nature means any wait staff can update tickets, and no items get lost during shift transitions.

Modern POS systems offer a wide array of functions to streamline FOH vs BOH restaurant operations. Customers can expect order management, payment processing, and basic timekeeping and payroll functions in even the most introductory plans.

Order management: Receives orders from multiple sources, including walk-ins, online platforms, and third-party delivery apps. With the addition of restaurant technology, like a kitchen display system (KDS), you can track every stage of a dish as it moves through the line.
Payment processing: Centralizes and securely processes all payment types, from traditional cards to mobile wallets and gift cards.
Tip management: Organizes tip allocation, manages tip pools, and simplifies tip-outs for staff.
Timekeeping: Accurately tracks employee hours, often integrating with or including comprehensive scheduling software. Many POS systems can also prompt for legally required meal and rest breaks. Some also include scheduling software.
Inventory tracking: Provides real-time tracking of items sold and often includes detailed ingredient-level tracking to manage stock, reduce waste, and optimize purchasing.
Reporting and analytics: Reporting is where POS systems shine. They centralize critical business data, offering real-time insights into costs (labor, food, and beverage), sales trends, and overall performance for informed decision-making.
Customer relationship management (CRM): Automatically creates customer profiles based on ordering history, enabling personalized service and marketing efforts.
Marketing: Uses customer data to feed integrated email and text marketing tools to help you grow your sales and drive repeat business.
Employee management: Includes productivity reporting, access control, and HR tools to optimize staff performance and manage labor costs.
Integration capabilities: Allows seamless integration with a wide range of third-party tools, such as reservation systems, online ordering platforms, accounting software, and payroll services, in case a POS system lacks a tool you need or you have an existing standalone system.

Advanced features commonly found in restaurant POS systems may also include reservation management, website-building or other marketing tools, and catering management capabilities. These features are nice-to-have but are more likely to benefit growing establishments, multi-location businesses, and franchises. Don’t be surprised if these features are only available as paid add-ons.

Reservations and waitlist management: Built-in reservation tools increase your reporting and marketing power by unlocking even more customer data and tying it to sales and staff productivity data.
Delivery driver management and dispatch: If you operate a staff of in-house delivery drivers, many modern restaurant POS systems offer driver dispatch tools that give you Uber-like precision in route planning and driver management.
Built-in website building tools for online presence: Allows you to design your website and keep it updated from the same back office platform you use to manage your restaurant. This saves you time setting up online ordering, updating menus, and rolling out marketing campaigns.
Comprehensive catering management: These systems track leads, proposals, contracts, and banquet event order (BEO) sheets, keeping all your catering and special events information in a single, central location (a feature that this former special events manager adores).
Voice ordering capabilities: Online ordering is so 2022; voice ordering for restaurants via kiosks, digital assistants, and smart speakers (like the Amazon Alexa and Echo devices in many US homes) is the next step in advanced ordering.

Pro tip: If a POS system lacks advanced features, you can typically find them in freestanding, third-party tools. If you have a third-party tool you already use and love (for your website, online ordering, staff scheduling, or reservations, for example), you can typically find a POS system that connects to it.

Types of POS systems for restaurants

Restaurant POS systems are primarily distinguished by their installation method and data storage approach. Mobile POS systems, often running on tablets or smartphones, are generally considered a subtype of cloud-based POS systems, offering flexibility for tableside ordering and line busting.

	Locally installed (legacy) POS systems	Cloud-based POS systems	Hybrid POS systems
Description	Onsite via an on-premise service Local data storage High security, but higher cost and complexity	WiFi connection Cloud data storage Self-install is more affordable Uses consumer-grade hardware like iPads	Combination of cloud and local installations Cloud operating primarily with local installation as backup User-friendly, industry-grade hardware
Average cost	High up-front costs Installation fees between $1,000 and $5,000 Total initial costs between $12,000 and $50,000 Ongoing monthly fees	$0 upfront costs Monthly fees from $0 to $250 Hardware costs from $0 to $3,000	Up-front hardware costs between $1,500 to $15,000+ Monthly software fees from $60 to $300
Common providers	Aloha, Micros, Speedline, Digital Dining, POSitouch	Square, Lightspeed, TouchBistro, Clover	Toast, SpotOn, Revel
Pros	Rugged, industrial-grade hardware Supports multiple payment processors Robust offline functionality	User-friendly interfaces Highly affordable Easy to set up, upgrade, and scale Data accessible remotely	User-friendly Robust offline mode Durable, industry-grade hardware Cloud-accessible reporting Easy to upgrade and scale
Cons	High up-front cost Steep learning curve Difficult to integrate with modern third-party software Data typically only accessible on-site	Performance can be limited in unreliable offline mode Requires ongoing monthly fees Consumer-grade hardware prone to breakage	Ongoing monthly software fees Significant upfront hardware fees May be locked into built-in payment processing

Average costs of restaurant POS systems

The cost of a restaurant POS system in 2025 varies significantly, influenced by the establishment’s size, type, required features, and chosen pricing model (cloud-based vs on-premise, subscription vs one-time license).

Overall cost breakdown

A restaurant POS system’s total cost typically comprises three main components: hardware, software, and payment processing fees, along with potential additional costs for installation, training, and add-ons.

The average cost typically ranges from $69 to over $300 per month, depending on features, hardware, and business size. Initial POS system costs can range from $0 to $2,000, with most businesses spending between $500 and $1,000 annually on software and recurring fees.

Hardware costs

These costs include the physical devices needed to operate the POS system and can be paid up-front or through financing options.

Small businesses, food trucks, and startups: May only require a basic tablet or smartphone with a card reader, with total hardware costs around $600. Mobile POS hardware can be as low as $0 to $100 if using an existing device.
Small to medium-sized restaurants: Typically need a tablet/touchscreen, tablet stand, cash drawer, receipt printer, and card reader. This setup can range from $500 to $3,000 for a complete setup, with a single terminal bundle averaging around $1,000. Countertop kits range from $500 to over $2,000.
Medium to large restaurants: May require multiple terminals, additional receipt/kitchen printers, KDS, and networking hardware. This setup can cost over $5,000, depending on the number of terminals your business needs. Specialized hardware for extensive businesses can exceed $2,000.
Individual hardware components:
- Tablet/touchscreen: $200-$1,000
- Tablet stand: $100-$200
- Cash drawer: $100-$400
- Receipt printer (thermal): $100-$500 (average around $210)
- Barcode scanner: $50 – $300 (average $50-$100)
- Card reader: $39 – $500 (basic mobile readers $49-$69)
- Handheld POS systems/terminals: Around $600 (range $200-$700; additional networking hardware potentially adding $200-$800)
- KDS: $100-$2,000
- Countertop POS terminals: $300-$800

Software costs: Recurring monthly or annual fees or a one-time license

Basic or entry-level software: Can range from $0 to $100 per month, particularly for small stores or startups using mobile hardware and free plans (e.g., Square, Clover).
Advanced or industry-specific software: Typically costs between $60 and $250 per month. Cloud-based POS systems typically cost between $59 and $250 per month.
Enterprise-level software (multi-site or complex operations): Can range from $200 to over $400 per month.
Per terminal costs: Software subscriptions can range from $29 to over $300 per month per terminal.
One-time software license (legacy systems): Less common now, but can cost $1,500 to $10,000 and often incurs extra fees for support.

Per-transaction payment processing fees

These costs are the charges you incur for accepting various card-present and digital, card-not-present payment methods.

In-person sales: Typically 2.3% to 2.9% plus 3 cents per transaction.
Online or keyed-in transactions: Slightly higher, often 2.9% to 3.5% or more.
Overall range: Credit card processing fees in the restaurant industry generally fall between 1.5% and 3.5% of the transaction amount.
Dual pricing: Modern POS systems may offer dual pricing, allowing restaurants to virtually eliminate processing fees by offering customers a cash discount.

It’s important to avoid POS systems that charge commissions on orders, as this can quickly add up to thousands of dollars per month for high-volume restaurants.

Add-ons and integrations

These enhance the POS system’s functionality, and most providers offer features ranging from $5 to over $500 per month each. Common add-ons include advanced inventory management, reservation schedulers, email marketing, gift cards, online ordering, loyalty programs, payroll functionality, and integration with other business systems.

Gift cards, online ordering facilitation, and mobile ordering solutions, for example, might cost approximately $50 per month each. Loyalty and rewards tools can also cost around $50 per month.

Integration fees for third-party apps can range from $100 to $1,000. And integrating with delivery and online ordering platforms can cost $20 to $80 per month. Additional user accounts can cost between $5 and $25 per user, per month.

Installation and training costs

These can range from $500 to $2,000 for onsite installation and staff training. Remote installation is a more affordable option, usually $200 to $800. Menu setup can cost an additional $100 to $500.

Factors influencing POS system pricing

Number of terminals and locations: More devices and stores generally lead to higher overall costs.
Industry-specific needs: Restaurants often require more complex features like menu customization, table management, and kitchen display systems.
Customizations and integrations: Tailoring the POS system and integrating with other software can increase the price.
Payment processing volume: Higher sales volumes can sometimes lead to negotiated lower transaction rates.
Features and modules: The complexity and number of features, such as real-time analytics, CRM integrations, and comprehensive inventory management, directly impact the cost.
Deployment model: Cloud-based systems typically have lower upfront costs and monthly fees, while on-premise (legacy) systems require a larger initial investment.
Scalability: Systems designed for smooth scaling might have higher initial costs but are more cost-effective as your business grows.
Support services: The level and quality of customer support offered (e.g., 24/7 support, dedicated account managers) can affect ongoing operational costs.
Hidden fees: Always be aware of potential hidden costs like PCI compliance fees or cancellation penalties.

Benefits of a POS system for independent restaurants

Many small food businesses continue to operate with basic cash registers. If you haven’t made the switch to a POS yet, there are some distinct benefits of a POS system that you should consider.

It can improve accuracy by 25%, according to a 2023 survey by Alexandria POS.

It can reduce customer wait times by 30%, according to the same Alexandria survey.
Using a POS can improve customer satisfaction by 20%. POS systems track customer purchases and preferences, feeding the personalization that customers crave. Most restaurant POS systems also include loyalty tools to help you reward regular customers with points or promotions.
It can support data-driven decision-making with real-time reporting. Having the right data readily available allows you to make smart pricing and staff changes on the fly that can make a big difference to your bottom line.
It can help you reduce waste and control costs by showing you your highest-selling items. Many POS systems include built-in ingredient-level inventory tracking, which can prompt you to place orders so you never run out of popular ingredients.
It can help reduce staff training time, thanks to user-friendly interfaces and navigation.

If you’re weighing a traditional cash register against a digital POS, consider this: Most brands have stopped manufacturing new electronic cash registers (ECRs). This means there’s no customer service or technical support if something goes wrong.

ECRs also lack the depth of reporting that small restaurants, cafes, and bars need to evaluate business performance and improve operations. Most food- and beverage-based businesses will be better served by some type of digital POS over a cash register.

Do you need a POS for your restaurant?

So, do you need a POS to run a restaurant? In 2025, the answer is probably yes. If you want to draw in customers, you need a frictionless order and payment system. Customers increasingly want digital ordering, digital payments (which 92% of customers use), and personalized service.

A digital POS system makes it possible for you to expand into new channels, like takeout, which 52% of US consumers say is “an essential part of their lifestyle,” and delivery. Delivery behemoth DoorDash reports that 70% of US diners order delivery from restaurants, and 70% of consumers place delivery orders online.

Is it possible to offer these without a POS? Technically, yes.

I’ve seen or experienced all the analog solutions, from keeping notebooks on regulars to relying on paper guest checks and kitchen tickets and tracking orders over the phone, email, and third-party tablets. These low and no-tech systems can work.

But they require a lot of time and hands-on attention, which today’s restaurant owners don’t have. In my experience, your time is better spent growing sales than manually tracking paper order tickets.

Frequently asked questions (FAQs)

While a traditional cash register primarily rings up sales and secures cash, a modern POS system offers a much broader range of functionalities. It integrates inventory management, customer data storage, loyalty programs, and promotions.

And, in many cases, it can connect with other solutions like accounting software and employee scheduling apps. Modern POS systems are also more portable and flexible, often functioning on devices like tablets and smartphones, providing real-time data accessibility.

Most restaurant POS systems have at least some offline functionality. In the US, most restaurant POS systems can store credit card payment information and run the cards when you regain internet connection. Some systems can even send orders to your kitchen and continue full on-premise operations without an internet connection.

Locally installed POS systems that are networked via an onsite server or hybrid POS systems that operate via the cloud with an on-site backup server tend to have the best offline functionality. Cloud-based POS systems tend to lose more functions in offline mode. For example, your staff may not be able to clock in or out, and you may not be able to process digital payments with an offline cloud POS.

Yes, POS systems are relatively secure, with multiple security measures in place to protect your business and customer data. Many POS systems support custom user permissions, allowing you to control which employees can access sensitive information.

POS systems can also vault credit card information and store it in cloud-based servers to reduce the likelihood that customers’ payment information will be stolen.

Locally installed POS systems that operate as a closed system on a private server tend to be more secure than cloud-based systems. But cloud-based systems are more flexible and tend to be less expensive. You’ll need to decide which is most important: a slightly more secure POS or overall costs.

The time it takes to set up a POS depends on the POS type and the complexity of your restaurant operation. If your menu is 20 items or fewer, with few modifiers, and you have less than three revenue streams, then you can likely get a cloud POS system set up in a single afternoon.

For more complex menus with many modifiers or several revenue streams (on-premise, drive-thru, takeout, catering, special events, retail sales, etc.), POS setup can take a couple of weeks to complete.

Self-installed, cloud POS systems tend to take less time to install than locally installed, legacy POS systems that operate via an on-site server.

Key trends shaping the POS landscape in 2025 include:

The continued rise of cloud-based solutions for their flexibility and accessibility.
Increased adoption of mobile and contactless payments for customer convenience and hygiene.
Integration of AI and machine learning for personalized customer experiences, predictive analytics, and optimized operations.
Enhanced data analytics and reporting capabilities for deeper business insights.
Seamless integration with online ordering and delivery platforms to capture a wider market.
Growth of self-service kiosks and tableside ordering to improve efficiency and customer control.
Advanced security measures to protect sensitive customer and business data.

Last bite

A restaurant POS system is a hardware and software solution to streamline your orders, payments, and customer and employee management. They also frequently include advanced functions for everything from human resources, reservations, online ordering, and delivery management.

A POS is the fastest way to reduce your administrative load while serving customers with their preferred ordering and payment experience. Assess your needs carefully and ensure any POS you’re considering has the tools you need at a price you can afford. The right system can grow your business and help you make data-based decisions for your restaurant.

POS System Costs, Types & Benefits: A Guide for Independent Restaurant Owners