First off, it's important to understand the difference between the two.
References are people who have agreed to be contacted by a recruiter or hiring manager in the future so they can verbally confirm your experience, skills, and talents. Recommendations are written testimonials that have already been drafted by people who were, or still are, in a position to endorse you (these used to always be in letter format, but now they're more often LinkedIn recommendations that you can show on your profile).
People who write recommendations for you may also agree to be a reference, but you need to ask - don't assume they will agree to be contacted.
1. You can ask anyone to be a reference but focus on people you reported to. For example, if you're a store manager, ask your previous district managers. If you're an assistant store manager, ask your old store managers. Peers and people who reported to you can be helpful as well, but previous leaders often provide more value to the hiring manager. If you only offer peers or subordinates as references, the recruiter will likely wonder why you can't get a past supervisor to endorse you. That may be a red flag.
2. Always ask the person in advance if they'll be a reference for you - don't wait until you've already provided their name to the recruiter. You need their permission first, and it would be pretty embarrassing (and unprofessional) if you submitted their name and then needed to contact the recruiter to explain why they can't contact that person.
3. Make a list of your references and have it available in case the recruiter asks for it (if they don't ask for it in the interview, offer it at the end). This list should contain 3-5 professional references and include their name, company, job title (or former job title if you're connected to them through a previous position), phone number, and/or email address.
4. Don't include reference information on your resume, especially contact information such as phone numbers or email addresses. Resumes are often distributed widely and you wouldn't want your personal contact information all over the place. Respect their confidentiality.
5. Don't write "References Available Upon Request" at the bottom of your resume (or anywhere on your resume). It's out-dated and will make you look out of touch. Besides, recruiters will ask for references whether you have that written on your resume or not.
6. Don't send your reference list with your resume and cover letter, unless requested. It's too soon for that - the recruiter or hiring manager hasn't even determined whether you're qualified for the position yet. Don't get ahead of yourself, but have the list ready and make sure you take it to every interview.
7. Written recommendations are extremely important in your job search because they come from an objective third party. Instead of you talking about how great you are, which means very little to the recruiter, recommendations allow other people (hopefully people in higher positions) to brag about your skills and accomplishments.
8. Get as many LinkedIn recommendations as you can so you can showcase them on your profile. In fact, if someone offers to write you a letter of recommendation, see if they'll provide a formal recommendation through LinkedIn instead. The reason LinkedIn recommendations are so valuable is because the recruiter can click through to see the background of the person providing the recommendation. It's transparent. Plus, recruiters can access these recommendations any time they want - you don't have to wait until they're asked for. (Nothing worse than having an amazing written recommendation and not being able to get it into the recruiter's hands.)
9. Since you should get as many LinkedIn recommendations as you can, don't limit yourself to just past supervisors. Yes, those are still the best, but you can also ask peers and subordinates as well. With references, you really only need 3-5 so you want to prioritize and pick the most persuasive people you can think of, but with recommendations you can have as many as you want, so feel free to ask anyone who would be appropriate (obviously they have to have some experience with you, don't start asking strangers).
10. If you have a really outstanding recommendation on your LinkedIn profile, you can integrate it into your resume to draw more attention to it. For example, if your last district manager said you were the best store manager she has ever worked with, do you really want to just "hope" the recruiter sees that in your profile? That needs to be front and center in your job search materials, and that means your resume and possibly your cover letter (I'd even include it in the summary of your LinkedIn profile). Another option is to say something like "10+ recommendations from past supervisors and peers on LinkedIn" and then follow that with a link to your profile.
Job searching is all about making the best possible impression on recruiters and other decision-makers, and that means having professional references standing by to vouch for you, and having written recommendations available for recruiters to read. Remember, when you talk about you, it's subjective and taken with a grain of salt. When third parties talk about you, especially people in power, it's usually considered more objective and trustworthy.
Hope that helps!