Inaccuracy of EEG electrode coordinates forms an error term in forward model generation and ultimate source reconstruction performance. This error arises from the combination of both intrinsic measurement noise of the digitization apparatus and manual coregistration error when selecting corresponding points on anatomical MRI volumes. A common assumption is that such an error would lead only to displacement of localized sources. Here, we measured electrode positions on a 3D-printed full-scale replica head, using three different techniques: a fringe projection 3D scanner, a novel Flying Triangulation 3D sensor, and a traditional electromagnetic digitizer. Using highly accurate fringe projection data as ground truth, the Flying Triangulation sensor had a mean error of 1.5 mm while the electromagnetic digitizer had a mean error of 6.8 mm. Then, again using the fringe projection as ground truth, individual EEG simulations were generated, with source locations across the brain space and a range of sensor noise levels. The simulated datasets were then processed using a beamformer in conjunction with the electrode coordinates registered with the Flying Triangulation and electromagnetic digitizer methods. The beamformer’s output SNR was severely degraded with the digitizer-based positions but less severely with the Flying Triangulation coordinates. Therefore, the seemingly innocuous error in electrode registration may result in substantial degradation of beamformer performance, with output SNR penalties up to several decibels. In the case of low-SNR signals such as deeper brain structures or gamma band sources, this implies that sensor coregistration accuracy could make the difference between successful detection of such activity or complete failure to resolve the source.