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Updated Apr 04, 2024

Digital Receipts: Why Retailers Are Embracing Them

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Sean Peek, Senior Analyst & Expert on Business Ownership

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Most of us give little thought to the decidedly unglamorous and oft-maligned sales receipt. In the early 2000s, before the explosive growth of retail mobile apps and before the benefits of email-address capture became known, only the Apple Store and a few startups pushed digital receipts as part of the growing sustainability movement.

Today, the environmental benefits of going paperless are widely understood. In fact, “green” receipts have gone mainstream. The biggest reason why is that digital receipts bring significant business benefits, no matter the retailer’s size or type. More than that, digital receipts are transforming retail marketing.

How digital receipts work

At the most basic level, this is how digital receipts work at the point of purchase:

  1. Upon checkout, the cashier asks if the customer would like a printed receipt, a digital receipt or both.
  2. If the customer chooses a digital receipt, the cashier enters the shopper’s email address into the point-of-sale (POS) system, and the technology delivers the receipt to the customer’s email inbox.
  3. Data from the transaction (including the shopper’s email address) is captured in the digital receipt process, and all of that data can be used for current and future marketing programs.

Benefits of using digital receipts

Digital receipts bring businesses a host of advantages that go beyond making your company eco-friendly.

  • Acts as a marketing tactic: Digital receipts give retailers an easy way to grow email lists and gather customer data at the transaction level. The latest digital receipt technology enables retailers to include marketing messaging — sometimes personalized to the individual customer — on the receipt. 
  • Delivers relevant content: Dynamic content within digital receipt programs allows retailers to provide unique content that is relevant to each individual customer. For example, the receipt could include recommendations for items that go well with the product just purchased or showcase related items that are available online only.
  • Boosts traffic: Digital receipts enable retailers to boost online store traffic and help them build social media communities. They can drive future interaction when links to your website, social media and loyalty programs are embedded in the receipts. Special announcements, like upcoming events, can also be added to the receipts.
  • Helps you understand customer needs: From the transactional data captured by a digital receipt system, you can get to know your customers and their individual needs with greater clarity and accuracy. This can lead to higher customer satisfaction, greater loyalty and more referrals.
  • Retains customers: Want a more effective marketing program focused on customer retention? With the data gathered through digital receipts, retailers can identify not only their top customers but also the type of merchandise they’re most likely to keep buying. 
  • Saves money: Thermal paper receipts cost the retail industry billions of dollars annually. Because no printing is involved, digital receipts are far less expensive and reduce overhead operating costs.
  • Offers convenience: Customers like digital receipts because, unlike thermal paper receipts, they won’t fade and are convenient to keep. Retailers like that digital receipts speed up the checkout process and that customers can’t counterfeit or alter them, which reduces the cost of fraudulent returns. These are handy win-wins.
Did You Know?Did you know

The use of digital receipts is expected to keep growing over the next few years — IndustryARC even predicts that by 2027, the market will reach $2.3 billion.

Drawbacks of using digital receipts

Like many technological inventions, digital receipts have some downsides that businesses should keep in mind. Notably, these drawbacks primarily affect customers.

  • Easy to overlook: Digital receipts are convenient, but customers may miss them in their inboxes, or the emails could get lost in spam or junk folders. Missed receipts could lead to issues with their bookkeeping and check balancing.
  • Technological skills required: Customers don’t need to be tech experts, but they do need to have a basic understanding of technology to access their digital receipts.
  • Data-compromise risk: Conducting business digitally puts customers’ personal information at risk of cybersecurity breaches. There is also a possibility of customer data being sold to third parties, leading to their dissatisfaction and even lawsuits. [Data breach insurance and cyber liability insurance could help.]
  • Storage challenges: Customers may lose access to digital receipts if they delete emails or lack online storage space. This can be a problem if they need to provide proof of purchase for defective products, which could affect their overall satisfaction with your business.

The best POS systems and credit card processing services for digital receipts

Selecting the right POS system for your business is a crucial step in conducting successful sales transactions and expanding your customer base. Your pick for a high-quality credit card processor depends on your business’s particular requirements, industry and budget. Make sure both your POS system and credit card processor are capable of producing digital receipts. To choose the best POS system and credit card processing services for your company, check out our top recommendations below.

Best POS systems

  • Clover: Clover is a great all-in-one option for service businesses, as well as restaurants and retailers. It’s an affordable POS system that offers fast in-house payment processing, recurring payment options and invoicing features, and can easily integrate with DoorDash. It provides customers unique benefits such as a “buy now, pay later” option, which allows people to pay in installments. Learn more in our full Clover review.
  • Toast: Toast is a quality POS system provider that offers both free and paid plans. With a restaurant focus, Toast boasts commission-free online ordering and an array of delivery features — including an on-demand delivery driver fleet, order scheduling and curbside pickup options, making it perfect for small businesses looking to save money while increasing their online presence and to-go options. However, it is not compatible with third-party payment processors. Find out more of what we like and don’t like about this solution in our detailed Toast review.
  • Lightspeed: Lightspeed provides a multi-industry POS system suitable for restaurants, retail and golf businesses. Numerous plans to suit a range of needs are available, and the system has functions for selling both offline and online, including mobile-responsive e-commerce options and inventory management tools. Lightspeed is also a great asset for analyzing your business, with more than 50 built-in reports. Find out more in our in-depth review of Lightspeed.
  • TouchBistro: With more than 200 restaurant-focused features, TouchBistro is a standout POS for any food service business, including bars, clubs, full-service and quick-service restaurants and food trucks. It offers mobile-friendly software, which also works on iPads, and allows for payment processing through TouchBistro Payments and third-party payment processors. However, TouchBistro can take time to set up due to its ample customization options. Get the details in our TouchBistro review.
  • GoDaddy: For both comprehensive POS and e-commerce features, GoDaddy is a great choice. The vendor delivers standout tools that aren’t found in most competitors, including website builder templates, online store creation — which allows you to list thousands of products online and sync your inventory with websites like Amazon, social media marketplaces and more — and custom domain connections. However, GoDaddy has a relatively small selection of POS hardware. Learn about the equipment in our full review of GoDaddy’s POS system.
  • Square: Top POS and payment-processing company Square offers free and paid plans for retailers, restaurants, small businesses and those requiring appointment scheduling. The software itself is free to use but requires that you process payments through Square. Businesses and their customers can enjoy modern features like contactless payment options via a mobile POS app. 
FYIDid you know

All of Square’s hardware, software and service offerings are available in Spanish — a great selling point for Hispanic business owners or companies with primarily Spanish-speaking customers.

Best credit card processors

  • Merchant One: With a 98 percent approval rating, Merchant One is a great credit card processing partner for businesses of all sizes looking for a flexibly priced service. The company is willing to work with small enterprises, regardless of credit score, and offers rates ranging from 0.29 percent to 1.55 percent for card-present transactions and 0.29 percent to 1.99 percent for keyed-in transactions. Find out more information in our Merchant One review.
  • Stax: Stax is a payment-processing software provider best suited for small and medium businesses looking to manage their sales, payments, inventory and staff in one comprehensive system. The vendor offers both membership-based wholesale pricing and a flat-rate plan, though its monthly subscription option may be better for higher-volume businesses due to its price. See a breakdown in our full Stax review.
  • Payment Depot: Payment Depot is a great option for businesses that process a large number of monthly payments. It offers membership-based pricing options along with its month-to-month contracts — which come with no early termination fees. Its three plans range from $59 to $99 per month, and businesses are only charged wholesale interchange rates and a fixed transaction fee. The company has a variety of card readers and POS systems, along with a virtual terminal. Our Payment Depot review has everything you need to know.
TipBottom line

With Payment Depot, transactions are paid the following day as long as they’re settled by 8:30 p.m. ET — a quicker turnaround than many leading rivals.

  • Chase Payment Solutions: Chase Payment Solutions is a credit card processor that caters to the health care field, offering HIPAA-compliant payment solutions. It delivers the highest payouts in the industry due to its affiliation with one of the largest banks in the United States. However, its rates are higher than most competitors at 2.6 percent plus 10 cents for in-person transactions, 3.5 percent plus 10 cents for keyed-in transactions, and 2.9 percent plus 25 cents for online transactions. Get all the details in our complete review of Chase Payment Solutions.
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Sean Peek, Senior Analyst & Expert on Business Ownership
Sean Peek has written more than 100 B2B-focused articles on various subjects including business technology, marketing and business finance. In addition to researching trends, reviewing products and writing articles that help small business owners, Sean runs a content marketing agency that creates high-quality editorial content for both B2B and B2C businesses.
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