Here are some pros and cons of turning your restaurant cash-only or cash-less to help you decide what works best for your business.
I have to admit, oftentimes when my friends and I are deciding on where to eat, if our choices are between a cash-only restaurant or one that accepts all forms of payment, it’s usually the latter that we end up at. It’s not because paying with a credit or debit card is easier or less of a hassle, there’s just usually at least one of us in the group (usually me) that doesn’t have cash on hand. Many restaurateurs, however, favor cash-only transactions, believing that it simplifies the process for both the customer and the business. Here are some pros and cons of turning your restaurant cash-only or cash-less to help you decide what works best for your business.
Like I said, simplicity is a major selling point for restaurants to rid the plastic. Only allowing customers to pay using cash means no expensive card processing equipment and no credit card fees (credit card companies charge the restaurant usually 2-4 percent for each transaction). Also, the owner as well as the servers can access their money (and tips!) immediately without having to wait several days before the funds are shown on the account.
On the other hand, Business.com warns that banning credit card payments will cause restaurateurs to lose some customers in the long run, especially if your current operation is card-friendly. Many customers may find the change inconvenient prompting them to stray away from visiting cash-only eateries because they do not always have cash in their pockets. Restaurants that get a lot of customers passing through on their lunch breaks or to have business meetings may suffer as well as most checks are paid using company credit cards. To avoid inconveniencing the customer, some restaurants add an ATM, which would still require users to pay an extra processing fee.
In an article from USAToday, some eateries are going a different route by only accepting credit and debit cards and contactless payments like Apple Pay. In doing this, many people believe that the process is much quicker eliminating additional time it takes counting bills rather than just handing over your credit card. Of course, the main benefit of a cash-less system is customers don’t have to worry about having cash on them, which automatically makes dining out much easier.
With every positive, there is a negative effect to the cash-less process. Aside from card readers and terminals being expensive to lease and maintain, there is also the risk of them breaking down. In a situation where guests are not required to bring cash along, in fact told that it won’t be accepted, systems breaking down would be a big headache for a business owner when credit cards are the only method of payment. What’s almost worse is when the customer’s card is declined, which unfortunately can happen by no fault of their own.
According to USAToday, millennials prefer to pay in cash over a credit card, as more than a third of Americans between the ages of 18 and 37 don’t have a credit card, so paying for their meal in cash is their only option. Some even go as far as to say it discriminates against teens and low-income families who do not have access to a credit card.
No matter which form of payment you decide is best for your business, loyal customers that appreciate your food will be more than willing to abide by any preferred payment method. Just make sure the pros outweigh the cons with whichever method you choose.
About the Author: Courtney Ciandella has been the sole Marketing liason for Bielat Santore & Company since 2013. She is also the conductor behind the Who’s Who in the Restaurant Industry and Restaurant Tip of the Month series.