Restaurant POS systems are a major investment.
Costs can add up quickly between monthly software fees, hardware purchases, setup charges, and more.
But how much exactly should you budget for a POS system?
In this post, we cut straight to the bottom line on restaurant POS system pricing. You’ll learn realistic cost ranges for entry-level, mid-range, and robust enterprise POS systems.
We’ll break down monthly costs, one-time hardware and installation fees, and additional charges like payment processing.
With clear POS system pricing guidelines and cost-saving tips, you’ll be equipped to choose the best solution for your budget and needs.
Let’s dive in and demystify how much restaurant POS systems really cost.
How Much Does a Restaurant POS System Cost
Most full-featured restaurant POS systems cost between $400 – $800 per month on average, with additional one-time hardware and setup costs. Free systems are available but have significant limitations.
Here are the key numbers on modern cloud-based restaurant POS system costs:
- Basic POS software subscriptions – Free to $150 per month. This includes just the essential POS software with basic reporting and inventory management. Limited features and number of users.
- Mid-range POS system – $150 – $300 per month. More advanced software with expanded reporting, customization, and inventory management. Allows more users and locations.
- Full-featured POS – $300 – $500+ per month. Robust software with detailed analytics and sales reports, extensive inventory tracking, scheduling, loyalty programs, and e-commerce integration. Suited for multiple locations and unlimited users.
- POS hardware – $1,000 – $3,000 one-time cost for a smaller restaurant. Includes POS terminal(s), receipt printer(s), cash drawer(s), barcode scanner, kitchen printer/display system, etc. Cost varies based on the number and quality of the hardware.
- Implementation and setup fees – Some POS providers charge a setup fee for installation, training, and initial configuration. This can be a $1,000 – $3,000 one-time cost.
- Payment processing fees – Typically 2-3% of sales. (Also be aware of maintenance fees, guest management fees, etc. Read the fine print).
Restaurant POS Subscription Fees
The ongoing software costs are a significant portion of your total POS system expenses. For modern cloud-based POS systems, you’ll typically pay a monthly software subscription fee. For legacy on-premises systems, you may have purchased a software license upfront and paid annual maintenance fees.
When evaluating POS subscription pricing, some key factors to consider include:
- SaaS vs. On-Premises – Cloud-based SaaS platforms have become the norm for most restaurants. These systems charge a monthly fee per terminal or user. On-premises systems require purchasing server hardware and individual software licenses.
- Per User/Location Pricing – Many POS providers have tiered pricing plans based on number of users, locations, terminals, and features needed. The monthly cost per terminal can range from $40 for a basic tablet POS to over $100 for an advanced terminal.
- Restaurant Type – Fine dining and full-service restaurants may need more advanced and customizable POS systems that carry a higher price tag. Quick service and small establishments can get by with simpler tablet-based POS for lower monthly fees.
- Add-On Fees – Add-on fees are common for additional capabilities like online ordering integrations, loyalty programs, accounting software, expanded reporting, and 24/7 customer support.
When comparing POS subscription fees, look at the total costs over your expected system lifetime. Lower monthly fees may end up costing more over time if you sacrifice features and support your business needs.
Here are some additional factors to consider when evaluating POS subscription pricing:
- Contract terms and length – Many POS providers will offer lower monthly rates if you commit to a longer contract, usually 1-3 years. Consider if you want to lock in pricing or have more flexibility.
- Price increase policy – SaaS vendors commonly increase fees annually. Check if your provider has transparent pricing policies.
- Discount opportunities – Some POS companies offer discounted rates for multi-unit restaurants, nonprofits, new restaurants, or annual prepayment.
- Upfront costs – Even cloud-based systems may charge initial setup/integration fees and training costs.
- Hardware bundles – Some providers offer POS terminal hardware bundled with software for a fixed monthly rate.
- Scalability – Choose a system that can easily scale subscriptions as your business grows.
- Data security – More expensive systems may provide better data security and compliance features.
- Ease of use – Cheaper but overly complex systems can negatively impact staff productivity.
Consider both short-term and long-term costs when selecting a POS system. The goal is to find the optimal balance of functionality and affordability for your restaurant’s needs.
Restaurant POS Hardware Costs
The POS software is only one component – restaurants also need physical hardware like terminals, printers, and devices for accepting payments, displaying orders, and scanning inventory.
Hardware costs typically include:
- POS Terminals – The main fixed POS station. Typical restaurant terminal costs range from $800 – $2500 per unit.
- Cash Drawers – To store and separate cash. Basic drawers start around $100. Heavy-duty options are $300+.
- Receipt Printers – Impact or thermal printers to print customer receipts. Ranges from $200 to $400 on average.
- Kitchen Display Systems – Shows food orders and tracks status. Start around $500 – $1500.
- Handheld Devices – For server order entry. Wireless POS tablets cost $400 – $1000 each.
- Customer-facing Displays – For counter-service businesses. Start around $100 – $300.
- Barcode Scanners – To input inventory items rapidly. The cost is usually $100 – $300 per scanner.
- Credit Card Reader – Process payments at the POS station or tableside. Basic terminals cost $200 – $500.
Many POS providers allow leasing hardware bundles that include multiple devices for a fixed monthly rate over the contract term. Buying instead of leasing means higher upfront costs but more flexibility long term. For both options, ongoing costs like paper and repairs should be factored in.
Payment Processing Fees and Costs
For restaurants that handle a lot of credit/debit card payments, the fees associated with processing those transactions can have a major impact on your POS system costs. The main fees to consider are:
- Interchange Fees – Set by the card networks (Visa, Mastercard, etc) and paid to the issuing bank with every transaction. Ranges from 1-3% typically.
- Assessment/Processing Fees – Charged by your payment processor to cover their costs. Around 0.2 – 0.5% per transaction.
- Payment Gateway Fees – For accessing the payment processor’s network. Can be a monthly fee, per transaction cost, or percentage-based.
- PCI Compliance Fees – To meet security standards set by credit card companies. Includes potential annual fees.
- Chargeback Fees – Assessed if a customer disputes a payment. Typically $15 – $25 per dispute.
Strategies for reducing credit card processing fees and expenses:
- Negotiate Interchange-Plus Pricing for lower interchange fees
- Partner with processors that offer non-profit or seasonal rates
- Minimize chargebacks through customer communication
- Accept more low-cost payment types like debit cards and mobile wallets
- Use a restaurant POS system with integrated payments to consolidate fees
- Implement EMV chip technology to reduce fraud-related fees
Carefully vetting your payment processor and POS-integrated payments can significantly impact your processing costs. A difference of just 0.1% in transaction fees on $500,000 of yearly sales is $500.
Integrated Payment Systems
One major decision when selecting a restaurant POS system is whether to go with an integrated payment processing system or use a third-party processor. Here’s an overview of integrated payment systems:
- Simplified management with one vendor handling the full POS system.
- Potentially lower rates by consolidating fees.
- Streamlined reporting with payments data integrated in POS.
- No need for separate payment terminals and merchant services.
- Software subscription fees may cost more for the added functionality.
- Less flexibility to change processors if not satisfied.
Popular Integrated Systems:
- Square combines free POS software with flat-rate processing (2.6% + $0.10 per transaction)
- Toast offers competitive interchange-plus pricing, starting at 2.0% + $0.10 per transaction.
For high-volume restaurants, an integrated POS with interchange-plus pricing can significantly reduce long-term costs compared to a third-party processor.
Additional Costs For a POS System
Toast – The quick-start bundle is free but you have higher processing rates. The standard plans starts at $69/month. You pay extra for add-ons like loyalty programs, payroll, and marketing.
Square – The free POS has add-on fees for features. Square Plus plans ($29/month) include more built-in features but charge per-location fees.
Lightspeed – Has per register fees and per location fees added to base subscription plan. Also charges add-ons for advanced features.
TouchBistro – Core plans start at $69/month but extras like online ordering, reservations, and employee management incur add-on fees.
SpotOn – Requires a minimum 1-year contract for monthly software fees. Add-on pricing is not publicly listed but includes loyalty, analytics, etc.
Shopify – Shopify POS Pro plan is $79/month with per location fees. Must use Shopify Payments or pay added transaction fees. Add-ons extra.
The key when comparing the best restaurant POS systems pricing is to look at the total costs including per terminal, per location, contract minimums, and add-on modules needed for your restaurant. Vendors like Lightspeed, Toast, and Shopify can have higher monthly minimums but include more features compared to Square’s pay-as-you-go model. But Square then charges more in add-on fees.
Carefully compare included features in base plans vs potential add-on costs to determine the most economical option aligned with your needs. Also factor in payment processing rates, which are usually the lowest for integrated systems like Toast and Square.
Strategies for Reducing Expenses
While some POS costs are fixed, there are ways restaurants can minimize expenses through smart management and planning:
- Use a Cloud POS – Cloud-based systems remove the need for on-site servers and make it easier to scale subscriptions as your business changes.
- Buy Select Hardware Upfront – Purchasing durable terminals and printers upfront saves on leasing fees over time. But lease tablets to more easily upgrade.
- Negotiate Contract Terms – Multi-year or annual pre-payments can lower monthly software and processing rates.
- Integrate Payments – An integrated POS payments solution helps consolidate fees and reporting.
- Analyze Support Needs – Don’t overpay for support you won’t use. But don’t sacrifice key uptime guarantees.
- Invest in Employee Training – Properly trained staff get more value from your POS system and require less ongoing support.
- Develop In-House Expertise – Having an in-house point person that handles maintenance, upgrades, and issues reduces vendor costs.
- Maintain Hardware – Following manufacturer-recommended maintenance helps avoid expensive repairs down the road.
- Review Costs Annually – Reassess needs and potentially renegotiate payment processing rates and POS fees as your business evolves.
With proper POS system management, restaurants can maximize value without overspending on unnecessary services and technologies. Prioritize essential components for smooth operations and growth.
Conclusion and Recommendations
Selecting and implementing the right POS system is a complex decision with long-term cost implications for restaurants. While upfront software and hardware costs are substantial, the ongoing fees and expenses over your system’s lifetime make up the total cost of ownership.
When evaluating different restaurant POS options, consider:
- Integrated payment processing can lower transaction fees but may increase monthly costs
- Ongoing costs for repairs, maintenance, training, etc. can add 10-20% annually
- Carefully vetting payment processing rates and fees can save thousands
The most cost-effective option balances robust functionality and hardware expandability with the lowest viable monthly fees for your needs. For most restaurants, an intuitive cloud-based POS with integrated payments and good vendor support offers an optimal and scalable solution.
Prioritizing critical components like order management, security, uptime, and customer support over unnecessary bells and whistles will provide the most return on investment.
Recommended Restaurant Point of Sale Systems
Q: What are the one-time vs. ongoing costs for a restaurant POS system?
A: One-time costs include hardware purchases, initial software licenses or setup fees, training, and installation. Ongoing costs are subscription fees, payment processing, credit card processing fees, upgrades, repairs, and support.
Q: Is it better to buy or lease POS hardware?
A: Buying provides more long-term flexibility and may cost less over time. Leasing means lower upfront costs but recurring fees. Lease tablets, buy fixed terminals.
Q: What is the average cost for a small restaurant POS system?
A: For a small restaurant with 1-2 terminals, expect ~$2,000 upfront for hardware and installation plus ~$100 per month for software and payment processing fees.
Q: Should I choose an integrated POS payment system?
A: Integrated payments simplify management and can lower costs by consolidating fees. But may have higher software fees, so compare carefully.
Q: How much should I budget annually for POS system expenses?
A: Plan for 10-15% of your hardware cost annually for repairs/upgrades, plus 5-10% of software fees for upgrades, training, etc.
Q: How can I negotiate better payment processing rates?
A: Highlight your sales volumes, growth, loyalty, equipment upgrades, and competitive offers to negotiate lower interchange fees and transaction costs.
- Processing Volume – The more total annual transactions/sales you process, the more leverage you have to negotiate better rates. Provide averages and growth trends.
- Average Ticket Size – Restaurants with higher average checks per transaction can qualify for lower rates.
- Length of Relationship – Loyalty and longevity with your processor can help secure better pricing.
- Competitor Offers – Having quotes from competitors gives you concrete rates to use for negotiating leverage.
- Equipment Upgrades – Updating terminals to support EMV chips, contactless payments, etc. can qualify for lower rates.
- PCI Compliance – Being PCI compliant shows you meet security standards for card acceptance.
- Chargebacks/Disputes – Lower dispute rates make you less of a risk and can mean better pricing.
- Contract Length – Committing to a longer-term (like 3 years) may mean bigger rate reductions.
- Price Increase Limits – Capping annual price hike percentages can provide more rate stability.
Bring concrete data on your volumes, compliance, equipment, and business growth. The more you can illustrate the benefit to the processor of retaining you as a profitable client, the better rates you can negotiate.