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Is a Free POS System Right for Your Business?

Skye Schooley
Skye Schooley
Staff writer
business.com Staff
Updated Feb 15, 2022

Learn about the pros and cons of using a free POS system for your business.

A point-of-sale (POS) system is an integral component for most businesses, but it can be challenging to find the right system for your company’s specific needs. Since POS software and hardware are available in various combinations and price points, business owners can pick and choose what works best for them. Sometimes, that best option is free of charge.

However, the age-old saying “you get what you pay for” rings true more often than not – and POS systems are no exception. Although using a free POS system to complete your consumer transactions may seem like a great option, it has its own set of pros and cons.

It is essential for business owners to understand what a POS system can do and to evaluate the benefits and limitations of free POS software before jumping into a plan that may be too good to be true. The best POS system for your business will depend on your business size, industry, budget and needed features.

Editor’s note: Looking for the right POS system for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

The best free POS systems

There are several POS systems that claim to be free; however, they often charge for certain features and add-ons. For this reason, it is important to evaluate what types of POS software and hardware are available and how they might fit your specific needs and budget. Here are a few great free (and almost free) options to consider.

Credit card processors (SumUp and PayPal)

If you are looking for a POS system, but don’t want to pay for one, an excellent place to start your search is with credit card processing services. Some of the top mobile credit card processors provide free POS software – as long as you use that company as your processor too. SumUp and PayPal are two examples of credit card processors that offer users free POS software. You can learn more in our review of SumUp and our PayPal review.

Keep in mind that if you choose one of these processors, you will be locked into using them as your credit card processor. In comparison, open-source POS systems are compatible with a variety of processors. Being tied into a credit card processor can be problematic should you want to switch to a credit card processing service with lower rates or better features.

Square

Square is one of the best low-fee credit card processing services available, and its free POS software is one of the most robust we found. It charges flat-rate transaction fees (2.6% plus 10 cents per transaction) and has several features that you can add to your system later as your business grows. Square also offers a 30-day free trial. Read our Square review to learn more.

eHopper

Another great free POS option is eHopper. It’s ideal for very small businesses like cafes, food trucks and retail stores that are looking for a highly rated free mobile POS system. It offers a free POS plan with free credit card processing, as well as a plethora of useful features like inventory and customer management, split payments and surcharges. However, it does have a few potential drawbacks. For example, it limits you to 50 products and 300 transactions per month, and a subscription to eHopper’s paid plan is needed to chat with customer support.  

Loyverse

If you’re running a small restaurant or retail business that places a high priority on customer management features, Loyverse may be a great free option. You can build a customer base with loyalty programs and access sales analytics. Loyverse also integrates with a variety of payment processors, so you can choose the one that works best for you. Keep in mind that Loyverse charges a monthly fee for additional features like employee management, advanced inventory and integration capabilities.

FYIFYI: The cost of a POS system often directly correlates to its features, limitations and convenience.

The benefits of using a free POS system

Free POS software is sometimes included with your credit card processing service. This can be the right choice for some small businesses; it all depends on what you need to use the software for.

Cost savings

The most obvious benefit is cost savings. Some POS systems can cost hundreds or thousands of dollars, which may not be practical or even possible for very small businesses that perform few card transactions.

No commitment

Another benefit is that free POS systems don’t require the same long-term commitment that many paid plans do. If you are not locked into a POS contract, you have the luxury of switching to a different POS system later on if your business expands or your credit card processing needs change.

FYIFYI: Be wary of processors that offer free POS systems but require you to sign lengthy contracts. For example, some providers offer free POS hardware if you sign a multiyear contract for credit card processing. However, you usually still have to pay for a monthly POS software subscription.

Fast checkout process

A free POS system is likely better than no POS system – if those are the two options you are considering. Most free POS systems will speed up your checkout process and streamline your sales funnel, even if it’s on a basic level. If you do not process many credit cards or require the added tools paid POS systems offer (e.g., inventory tracking, employee and customer management, third-party software integration), a free POS system can be a great choice for your business.

The limitations of using a free POS system

Free POS systems are advertised as just that – free – but this is not always the whole truth. There are some limitations to be aware of.

Credit card processing fees

Although initial setup costs, a monthly POS software subscription or POS hardware purchase may be omitted, you are often still on the hook for credit card processing fees. Keep in mind that free POS systems typically restrict your ability to choose your own processor and they come with higher transaction fees than their paid counterparts. This is a drawback if you process a high volume of credit card transactions. 

Restricted usability

Although this can vary by POS provider, it’s common for free POS systems to limit your number of inventory items, registers or users. This means that free plans are typically viable options only for very small businesses or companies with a low number of transactions or products.

Limited features

With a free POS system, what you save in money is often lost in features. If you anticipate needing the added capabilities that many paid POS systems offer, it may be challenging to find a free POS system that can accommodate you. Most free systems come with basic purchasing capabilities, not the paid perks. You’re unlikely to find a free POS system that has convenient features like inventory tracking, sales data and business performance reports, third-party integrations, and customer and employee management.

TipTip: Consider the POS features your business currently needs as well as the ones you will likely need in the future. Although the “free” price tag may be enticing, it might not be a practical option for your business. This is especially true for larger companies and those that conduct many credit card transactions each month.

What is the best free POS system for bars or restaurants?

If you have a small counter-service restaurant or cafe, you may be able to successfully use free POS software. It’ll be significantly more difficult if you have a full-service restaurant or bar and need restaurant-specific features like ingredient-level inventory tracking, tab management, tip tracking and menu or table management. In this case, you may want to consider a POS system with a free trial.

Free POS systems

The free POS systems we mentioned above are all good options for bars and restaurants. For example, Loyverse has a restaurant version of its free POS software with a good selection of features, such as order management with modifiers and inventory management that can track ingredients. However, you’ll likely want to subscribe to its paid advanced inventory module so that you can make stock adjustments, conduct inventory counts and manage purchase orders.

Likewise, eHopper’s free POS software offers some restaurant features, including order modifiers and tip management. Still, you’ll need to upgrade to a paid plan to access a menu builder, ingredient management and low-stock alerts.

POS systems with free trials

If you can’t find the right free POS system for your bar or restaurant, you can also consider paid POS systems that offer free trials. Here are some of the best POS systems for restaurants:

  • Lightspeed: Lightspeed can serve a variety of restaurant types, like full- and quick-service eateries, bars, cafes, and hotel dining. Paid POS plans start at $69 per month. You can test it out risk-free with a 14-day free trial. Read our Lightspeed review to learn more.
  • Clover: Clover is another affordable option, starting at just $69 per month. It offers monthly plans and a 30-day free trial. Learn more in our Clover POS review.
  • Square: Square is probably one of the best options if you’re looking for a free POS solution, because it offers a free plan and paid plans with a 30-day free trial. This is great for small and growing restaurants.  

How to choose a free POS system

Given that there are several free POS system options available, each with its own capabilities and limitations, it is important to assess your current business needs before choosing a system.

To help you choose the best POS system for your business, here is a checklist of important factors for you to analyze your specific POS system needs.

  1. Budget: Set a realistic budget for how much you can spend on a POS system. This budget should include the cost of POS software, POS hardware and credit card processing. If you are starting a new business, your budget may be tight; however, keep in mind that it may increase as your business scales.

  2. Business size: The size of your business and the number of registers and locations you have will affect the type of POS system you need. A very small business with few credit card transactions may get away with a free POS system, whereas a large retailer with several registers – or even multiple storefronts – will need a more comprehensive POS system.

  3. Industry: The industry you are working in will determine which type of POS system you need. Do you need a restaurant POS system that can accommodate reservations and seating arrangements, or are you a small retailer that needs basic inventory management?

  4. Features: In addition to industry features, the POS capabilities you need will depend on your personal preferences. Are you OK with a simple POS system that is limited to purchasing transactions? Do you want comprehensive POS software that integrates with your accounting and marketing systems to automate business operations? These features will determine whether you can partner with a free POS system or require a paid version.

Hardware features to look for

Before selecting a POS system for your business, you want to review different types of hardware available.

Card reader

At a minimum, card readers should come as part of your package. Card readers may be standalone devices or attach to a smartphone to process transactions.

Barcode scanner

Systems with barcode scanners enhance the capabilities of the system. With a barcode scanner, you manage inventory through your POS system.

Receipt printer

Another hardware feature for a POS system is a receipt printer. Although some customers prefer emailed copies of their receipts, many still ask for a paper copy.

Cash drawer

Finally, cash drawers are an available feature for POS systems. Although many businesses prefer cashless transactions, you can expand your customer base by accepting cash. Choose a POS register that syncs well with the rest of your POS software features. POS cash registers reduce the need for cashiers to count bills and coins manually during transactions.  

Software features to look for

Inventory management

Inventory management systems keep track of products in stock and on backorder. Most importantly, inventory management systems highlight best-selling items within your catalog and which products are underperforming and could potentially be eliminated from your stock.

Reporting

Search for POS systems that can generate reports. The best POS systems allow for reporting options filtered by store and even by the cashier. Reports assist in forecasting, reordering and following sales trends. Sales performance by cashier permits employers to track productivity among workers.

Customer management

Customer management is another essential feature of a POS system. Save customer details within the software and better manage returns and client loyalty programs. Cross-channel return capabilities within a POS system help smooth out the returns process.

A POS system can dramatically impact the effectiveness and accuracy of your business. Consider all of your specific needs to determine the best option for you.

Image Credit:

SeventyFour / Getty Images

Skye Schooley
Skye Schooley
business.com Staff
Skye Schooley is a staff writer at business.com and Business News Daily, where she has written more than 200 articles on B2B-focused topics including human resources operations, management leadership, and business technology. In addition to researching and analyzing products that help business owners launch and grow their business, Skye writes on topics aimed at building better professional culture, like protecting employee privacy, managing human capital, improving communication, and fostering workplace diversity and culture.