The Price of Payment Methods

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The “cash-only” restaurant model once dominated the hospitality scene. Now, on the opposite end of the spectrum, the “card-only” model is taking rise. With the flexibility offered by mobile apps and payment methods, touting around bills is becoming a thing of the past. More people are carrying credit or debit cards rather than cash, and some eateries have wasted no time in adapting, leading the way for others to do the same.

The fast-casual salad chain Sweetgreen is one example, refusing cash payments since January of this year and accepting payment only by card or their app. With over 60 locations across the US, only the ones in states where it is mandated that they must accept cash are exempt from the policy. The restaurant Sunday in Brooklyn has been cashless since its opening last year, and many more are poised to follow suit.

Why should you consider making such a bold move? Here are a few reasons given by owners and operators themselves:

It’s faster - From tableside swiping to calculating tip share amongst staff, the entire payment process is automated. Rather than having a server make several trips between the register and the table, it gets boiled down to one streamlined transaction, saving time and clutter. For pay-at-the-register joints, having a card on hand is undoubtedly quicker than counting out change, allowing for more business during busy mealtimes. For crisis situations, you may want to keep a company credit card on hand for cash-carrying patrons.

It’s cleaner - Simply put, cash is dirty. The number of hands and places it passes through makes cash a breeding ground for germs. Needless to say, handling food at the same time is probably not the most sanitary move.

It’s safer - Unfortunately, restaurants are often targets for robberies. Whether it’s an employee on the inside or a midnight break-and-enter, avoid being burglarized by removing cash from the scene. If there’s nothing in the register, there is no reason to try to steal from it.

Focus on other things - With each card swiped and chip read, your system will record exactly what items were bought by that guest. Knowing that all transactions and sales are fully documented, you’ll be able to turn your attention to other matters - like your guests, employees, and operations.

This is not to say that paying with cash is obsolete. Yet. Going cashless is a big jump, and there are still many benefits to accepting payment in bills and coins.

Convenience - It may make more sense to pay for a cup of coffee with a few bucks than to charge it to a credit card. Most people still carry cash, and if it’s easier for them to pay that way, let them!

Include everyone - There are those who are not in a position to own a credit or debit card. Namely, the less affluent and children. If your fast-casual restaurant is across the street from a school, turning away cash payers may end your business.

Avoid fees - It is estimated that up to 5% of a restaurant’s revenue is spent to cover credit card fees. The number of card transactions in a given day can sway your profit margin over time - a few cents here and there on a sale may add up quickly for small local businesses and their customers.

No matter what you decide, let people know. Put it on the website, share it on social media, and post signs in the restaurant (not just on the cash register)! One of the worst feelings for customers is having to cancel an order because they don’t have an alternative payment type.

So when would it make sense to convert to a cashless system? Think about the circumstances surrounding your business and analyze the transaction trends. Who are your customers? What kind of area are you located in? Higher-end restaurants in more affluent neighborhoods will likely see the highest percentage of card usage. If over 80% of your transactions are done without cash, it may make sense to switch over.

Will there ever be a day when wallets won’t carry a few stray singles? It may be on the horizon.