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The Almighty Buck Businesses

What Happens When Restaurants Go Cashless (usatoday.com) 471

There's a new trend starting: restaurants that won't accept cash. USA Today reports: Restaurant owners say ordering is faster from customers who slap down plastic instead of dollars, cutting a few seconds out of the process. But most of the benefits appear to accrue to the restaurants: less time taken counting bills, reduced pilferage, no armored-car fees or fear of stickups. It's a risky strategy. For starters, upscale Millennials -- among the most coveted of diners because of their youth and affluence -- prefer to pay in cash, according to Bankrate.com data. Also, more than a third of Americans between the ages of 18 and 37 do not have a credit card. For customers, patronizing restaurants that don't take cash means one less payment option when they need a quick meal during an all-too-short lunch hour. Plus, it raises questions about whether it discriminates against cardless teens and the poor... A committee in Chicago is weighing Alderman Edward Burke's proposed requirement that merchants accept cash. Massachusetts has had a Discrimination Against Cash Buyers rule on the books since 1978... Lana Swartz, co-editor of the book Paid: Tales of Dongles, Checks, and Other Money Stuff, says "One of the cornerstones of American capitalism is everyone's money is equal."
Meanwhile, the Associated Press reports: Many business owners would rather be cashless. Cash actually costs money -- banks charge fees for cash deposits and to handle coins... And counting and checking cash and preparing it for deposit takes up time a manager could spend with staff or customers... Millions of consumers use little or no cash. In a survey released last month by the financial services company Capital One, only 21 percent of 2,000 people questioned said cash was their most common way to pay for things. But going cashless isn't a slam-dunk. Some customers who want to use cash point to a statement on paper money: "This note is legal tender for all debts public and private." However, the Federal Reserve says on its website that private companies can make their own policies about cash unless there is a state law saying otherwise.
One Houston restauranteur changed his mind about going cashless, saying "You can't compete if you think you're going to create a whole set of rules and expect people to follow them." One Chicago restauranteur admits that "it has generated the most negative pushback of anything we've ever done," estimating revenue fell 2% just from angry cash customers who never returned.

But he persisted because his eight restaurants had experienced six burglaries, break-ins or armed robberies over the last eight years -- and got "dozens and dozens" of counterfeit bills from customers -- while by going cashless, he no longer has to pay for bank fees and armored car pickups.
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What Happens When Restaurants Go Cashless

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  • Lower prices right? (Score:5, Interesting)

    by svendsen ( 1029716 ) on Saturday April 21, 2018 @06:38PM (#56480199)
    So the cashless restaurants are going to have lower prices and not charge like 12 bucks for a mixed drink?
    • not as long as there are dummies willing to pay that much for a shot of cheap liquor and a cup of fruit juice

    • by ShanghaiBill ( 739463 ) on Saturday April 21, 2018 @08:35PM (#56480833)

      So the cashless restaurants are going to have lower prices

      Restaurants are in a very competitive business, with a high failure rate. So cost savings are very likely to be reflected in prices.

      not charge like 12 bucks for a mixed drink?

      More likely they will cut food prices instead. Drinks are less price sensitive. Especially after the first few rounds.

  • Cashless = No tips (Score:4, Interesting)

    by Anonymous Coward on Saturday April 21, 2018 @06:40PM (#56480205)

    Seriously, when I don't pay cash, I literally never leave a tip. When the machine ask if I want to leave a tip, I just press Ok on 0.00$ to skip that and go quicker.
    So pay your employees a living wage instead a relying on tips.

    • by ArchieBunker ( 132337 ) on Saturday April 21, 2018 @06:54PM (#56480261)

      You must not eat in the same restaurant twice. I can only imagine what's happened to your food...

      • by Bert64 ( 520050 ) <.moc.eeznerif.todhsals. .ta. .treb.> on Saturday April 21, 2018 @09:29PM (#56481101) Homepage

        You tip *after* you've had the food, so long as you don't return to the same restaurant again you'll be fine.

        That said, the whole idea of expected tipping is quite ridiculous and causes all manner of problems.

        I travel often for business, i need receipts for my food and i get reimbursed, if you give me a receipt which includes the total amount including the tip i can claim back the tip which means i'm likely to be more generous with it. If i'm paying the tip out of my own pocket i'm going to be more stingy not least of all because i'm not eating out by choice - i'm away from home on business and can't prepare food at home like i normally would.

        Not only that but if your working in a restaurant, the restaurant should pay a reasonable wage, not expect you to pay 15% more than the advertised price to pay for the staff. If you need to charge more to pay for the staff then raise prices so the cost is up front, or add a service charge thats displayed on the menu. If you're advertising a price then i'll expect to pay the advertised price.

        You shouldn't be tipping staff simply for doing their job, you should tip them for going above and beyond. If they're simply doing their job to the expected standard then you've already covered the cost in the bill. It's even worse when you actually receive poor service and they still expect a tip!

        Another thing that annoys me is you're expected to tip the waiters, but what about the chef? If you hd a really good meal, wouldn't you rather reward the chef who cooked it? The guy who slaved away over a hot stove to produce a delicious meal, or should you reward the guy who relayed your order to the chef and then carried the order to you? Some restaurants actually replace the ordering part with a tablet located on the table, so the waiter only has to carry your order to you, i wouldn't be surprised to see that automated by a robot at some point too.

    • by rtb61 ( 674572 ) on Saturday April 21, 2018 @08:08PM (#56480693) Homepage

      For me, I simply limit credit card purchases. Never ever buy consumables with a credit card, makes it a whole lot easier to track shonky transactions. So go to cash machine and get cash for all consumable purchases. Credit card or more accurately debit card, just to pay bills to produce an independent record of payment and tech gear or stuff ordered online to enable payments to be contested should they fail to meet required expectations. Out and about, always cash, maintains a level of privacy, less purchases from often somewhat less reliable billers and far fewer transactions to track.

      Never pay a tip, seems pretty tacky, denigrating must be because where I live, they get a living wage and not just fucked over.

    • by EvilSS ( 557649 )

      So pay your employees a living wage instead a relying on tips.

      Agreed. Restaurants just need to bite the bullet and raise prices by 30% and pass it on to the waitstaff already.

  • by SmaryJerry ( 2759091 ) on Saturday April 21, 2018 @06:45PM (#56480219)
    Cash costs money but credit cards take a lot more depending on the size of the purchase.
    • cards take less than 5%

      cash you need to pay people to count it, pick it up, do the bookkeeping, account for theft and pay the bank to accept your deposit

    • by Kjella ( 173770 ) on Saturday April 21, 2018 @07:25PM (#56480423) Homepage

      Cash costs money but credit cards take a lot more depending on the size of the purchase.

      Indeed, because they add a lot of services into that "credit" side of it like for example travel insurance and kickbacks where customers appear to be "saving" money. In Europe there's actually a lot of alternative debit card systems run by the banks, like here in Norway there's "BankAxept". In Germany they have "Girocard". Without all the bells and whistles here in Norway at least they pay roughly $0.02/transaction, which is way below the cost of actually handling cash. So honestly, the only reason businesses accept cash here is because they must. The moment the law changes and they're not required to I imagine very many businesses will go cashless. So if you're thinking cashless won't happen because companies won't accept it, well you're wrong. Really the only compelling argument is that in a real emergency society would collapse if people couldn't pay for basic necessities, so everyone should have a cash reserve. But it's like fire insurance on your house, hopefully you'll never ever need it.

      • This is not far-fetched in the US at all. See also, widespread blackouts and telecomm outages in 2012 after Hurricane Sandy. 2003 Northeast blackout. And that's just one decade, in one part of the country.
  • The real question (Score:4, Insightful)

    by king neckbeard ( 1801738 ) on Saturday April 21, 2018 @06:47PM (#56480231)
    The real question was never whether or not dealing with cash costs money and causes hassles. It's how those costs compare to merchant fees and securing your POS, and how much leverage is created by a process not dictated by Visa and Mastercard. It's a complex and fragile equation that, in practice, ultimately boils down to accepting any form of payment that still has a decent enough market share ot be worth accepting.
  • by Sigma 7 ( 266129 ) on Saturday April 21, 2018 @06:49PM (#56480239)

    I've seen enough stories where the restaurant has a fault with their credit card system, and thus has an extremely long delay in processing them (assuming that they still get processed.)

    If there's any major failure, which will happen when an ice storm causes scattered outages across the city, the restaurant has no way to receive income. Either they accept cash, or they don't get the day's income.

    I've also went into a fast food restaurant which also had a cash register failure. They still did business using pen-and-paper, taking payments in cash, and thus didn't have to close down. Even if slightly slower or less reliable, it's as if the cashiers knew how to handle the situation.

    • by mentil ( 1748130 )

      They can use something like Square as a stopgap for those situations. There are dedicated cellular modems you can plug into your network to provide redundancy, as well.

      • That's assuming the towers are operational.
      • by Sigma 7 ( 266129 )

        Yes, you could also try Google Wallet, Apple Pay, Bitcoin, or any other system. No number of alternative electronic systems protect against major outages. If Visa goes down for an entire country (which did happen), things like Square also stop working. If you have a disaster that destroys all electronic infrastructure as it happened with Puerto Rico, nothing electronic functions as a suitable backup.

        You never want your business to fail from just one point of failure, and in this case, it's the electronic p

        • by mentil ( 1748130 )

          The point is that these outages are rare enough in certain places that it's cheaper overall to go cashless. Sure, if you live in a country where the electric grid is down 18 hours a day, cashless might not be for you (although if it's completely cellular-based, it might yet be). Where I live, I haven't lost electricity in a few years, and it was only for a few minutes when I did. Remember also that if you have a robbery, that might interrupt service, require you to count new tills before you can take anyone

    • by guruevi ( 827432 ) on Saturday April 21, 2018 @07:26PM (#56480439)

      Even though that has been stated many times, VISA and MC both have clear requirements for merchants during outages and downtime. You should be able to take the card as long as your POS system has power - the transaction will process later, you can call their call-centers by phone to process a purchase, you can write the card number on a special form and then process it later (or remember back when they had those slide-things, they still have those for embossed cards).

      The problem is obviously your volume/throughput will suffer if you end up doing that and your employees need training. It's either that or you let your customers walk through with stuff unpaid, if there is a VISA/MC sticker and they don't WANT to process the card, VISA/MC says their customers have the right to treat it just like you wouldn't accept cash and the customers can actually complain to their CC company and they'll get a fine too.

  • Depends... (Score:4, Insightful)

    by b0s0z0ku ( 752509 ) on Saturday April 21, 2018 @06:52PM (#56480251)

    If they make that clear before the fact, I walk out.
    If they only make that clear when I'm ready to pay, I tip a penny. In cash.

    Screw businesses that don't care about customers' privacy and anonymity.

    • I don't think big brother cares how many times you eat at Burger King and Chipotle. Do you also wear a disguise in public?

      • Re:Depends... (Score:5, Insightful)

        by b0s0z0ku ( 752509 ) on Saturday April 21, 2018 @06:59PM (#56480293)

        I don't want to live in a society where our location is tracked 24/7/365 whenever we buy food, gas, or other necessities. Cash = the ability for people to go off the grid and maintain their privacy.

        I don't want to do business with anyone who's doing their part to erode that ability. Thus, I'll vote with my cash and pay cash.

        It's not that I personally care about it, but I want to live in a world where people can run away and drop out of sight. It's an important safety valve against authoritarianism.

        • Says the person with a registered account on Slashdot.
          • My choice to set up or delete the account. It's not required to live, unlike food or groceries.
        • I honestly stopped caring years ago. The folks who want to oppress me have much, much better ways to do it than keep track of where I buy gas & food (and no, they don't know what you're buying, that much data isn't collected by the businesses).

          Everytime I hear about privacy I think if this xkcd comic [xkcd.com]. I'm not saying we shouldn't work to stop oppression, I'm saying there's better places to spend your time and effort. For example, show up to your primary so you can get some candidates that aren't corp
      • Only the State obtains its revenue by coercion. - Murray Rothbard

        Murray doesn't know many loan sharks.

      • As far as "Big Brother" caring, what if hellth insurance companies (misspelling deliberate) start buying purchase data from credit card companies and restaurants? Eat at Burger King more than 2x last month? Cha-ching! Cha-ching! "Unhealthy diet surcharge."

        Don't underestimate the ability of the corporatist state to control people's lives. Having all purchases tracked, tabulated, and stuck in a database increases that ability.

      • by mentil ( 1748130 )

        Actually, I'd like a Google Maps hack showing everyone nearby who has eaten at Chipotle in the last 3 days (ok who am I kidding, 36 hours) so I can stay way the hell away.

        • You can easily find them by their smell, and sometimes by their frequency of hospital ER visits for e. coli infections.
      • by Falos ( 2905315 )

        I don't think big brother cares
        The device you sent that with is called a computer.

        It isn't limited by feelings.

    • by mentil ( 1748130 )

      Screw businesses that don't care about customers' privacy and anonymity.

      You can use only stolen credit cards. Problem solved.

  • Reasons... (Score:5, Interesting)

    by b0s0z0ku ( 752509 ) on Saturday April 21, 2018 @06:56PM (#56480277)
    Other reasons for this: (1) Classism. "We don't want poor or immigrant customers who don't have a credit card or check card. We cater to millennial hipsters only." Good to know. (2) Bribery. There was an article last year about a major credit card company paying businesses $10,000 to go cashless. Good on Chicago for thinking about regulating this and Massachusetts for actually regulating cashfree businesses out of existence. Nice to see that some jurisdictions actually stand up for their constituents' privacy.
    • I think you're making up sound bites. reality is that you can buy a major credit card companies gift card for $5 and up and it works like a credit card. oh look, poor people can go cashless too. guess you'll have to go back to twitter for more ideas on something to whine about

      • Why should you have to go through an additional fuckin step if you're poor or wish to maintain your privacy?
        • You seem to be the only person concerned about this. Was your aluminum foil purchased with cash as well?

          • Plenty of people are concerned about the long-term effects of a cashless society... Even the Swedes are getting "red pilled" about the issue.
      • Prepaid cards often have setup fees and other pitfalls accompanied with them. It's not exactly a 1:1 cash to card transfer, and those fees predominantly hit people who have less money to begin with.
    • by guruevi ( 827432 )

      It's the same thing as demanding a jacket/classy attire to enter certain restaurants. Yeah, they won't allow homeless people in.

      Also, poor people generally have EBT cards which they can use and if you cater to millennial hipsters, you generally aren't catering to the poor anyway, you're selling $35 rolls of sushi.

    • Other reasons for this: (1) Classism. "We don't want poor or immigrant customers who don't have a credit card or check card. We cater to millennial hipsters only."

      Except the data shows those "millennial hipsters" prefer paying in cash. I mean, it's right in the summary.

      "For starters, upscale Millennials -- among the most coveted of diners because of their youth and affluence -- prefer to pay in cash, according to Bankrate.com data. "

  • by RhettLivingston ( 544140 ) on Saturday April 21, 2018 @07:09PM (#56480335) Journal

    I hate it when I get cash because I don't have an easy way to get rid of it. I bank with an online bank and have no means of depositing it. I have no cash in my wallet or coins in my pocket and haven't in ages. If forced to take change for some reason, I just tell the cashier to apply it to the next person's bill.

    I've not seen a business that was cash only in years, but if one were, I wouldn't consider patronizing them.

  • by camperdave ( 969942 ) on Saturday April 21, 2018 @07:10PM (#56480339) Journal

    Restaurant owners say ordering is faster from customers who slap down plastic instead of dollars...

    I am Canadian. When I slap down money, it IS plastic.

  • So what's the plan (Score:5, Interesting)

    by nehumanuscrede ( 624750 ) on Saturday April 21, 2018 @07:12PM (#56480357)

    when dinner is finished, you hand your card to the wait staff and it's denied ?

    I'm sorry, I don't have another card. Do you take cash ?

    I prefer to use cash because every card compromise I've ever had ( including the latest chip cards ) have been wait staff at restaurants who simply copied what they needed from my card.

    ( They do it with gift cards too so use low denomination varieties so it gets used up in one go )

    I don't have these issues with cash.

    • Using my watch for payment has kind of changed how I look at small transactions with the credit card. No pesky need to sign anything. I just hope the US catches up on contactless/ApplePay ubiquity like the rest of the world.

      For businesses, just keep one cash drawer active rather than two or three. Good contingency.

  • I shouldn't have to go through a credit card company to make purchases.
  • when the system goes down you just bill the servers for the free food or do you lock in diners for hours waiting for the card system to go back up?

    • Probably go back to the old imprint-type credit card machines. Cha-chunk. Cha-chunk. Sign at the X. And you hope everyone's card turns out to be valid after the system comes back up.
      • by hjf ( 703092 )

        you can do offline transactions with handheld POS machines. you slide the card and do the transaction manually, then it prints the receipt with a longer blank area, place it above the card and rub something so the thermal paper picks up the embossed numbers.
        some debit cards, like most of the ones here in Argentina, don't have raised numbers. they very explicitly say, on the front of the card, ELECTRONIC USE ONLY. So if the system is down, it's done. You can't use the card.

        • Could you have a machine that captures a photo of the card or the magstripe data and phones/Internets it back to the company when the connection goes back up? Basically a modern equivalent of the old ka-chunkers.
  • by rsilvergun ( 571051 ) on Saturday April 21, 2018 @07:33PM (#56480489)
    by crooks. Lobby was Open 24 hours. I never did get robbed, but I knew people who had been. The owner of that restaurant? Started closing the lobby only after the police threatened to hold her criminally liable if anyone got hurt. They knew the robberies were happening, but they were sporadic enough that the profits from keeping the lobby open were > what was stolen.

    Being cashless is a big plus for the employees at 24 hour restaurants.
  • by DERoss ( 1919496 ) on Saturday April 21, 2018 @07:40PM (#56480537)

    When I eat in a restaurant, I usually pay for my meal with a credit card. However, I never charge a tip. Instead, I always leave a cash tip.

    Why? There are several reasons.

    Some restaurants divide charged tips, giving some of it to the non-service employees such as cooks and dishwashers. That way, the owner does not have to pay everyone the legal minimum wage. This practice was prohibited by the Obama administration but reinstated by Trump. I give a cash tip in an attempt to provide my server the full amount and also to force the owner to pay non-service employees properly.

    When a restaurant submits my charge to its bank, there is a fee deducted from what is credited to the restaurant. Some restaurants reduce charged tips proportionally. I want the server to get the full amount, not a discounted amount.

    If the total amount of a purchase is less than $10, I pay with cash, not a credit card. Whatever happened to "The customer is always right."? If they do not want my cash, I do not want their product or service.

  • by amiga3D ( 567632 ) on Saturday April 21, 2018 @08:23PM (#56480769)

    As long as they clearly indicate that they don't take cash it's not a problem. I just don't want any surprises. I use my card occasionally at restaurants if the bill is over 50 dollars or so. But mostly I prefer cash for small purchases, certainly any in the 20-30 dollar range. As long as I know their policy though I can avoid them. Not likely to be a problem for me in the near future as there are plenty of place to eat that don't treat their customers like shit.

  • How is the /. business model going to do with out tips?
  • Waitstaff. In the US IRS rules assume you make 10% of your sales in tips. You are requires to report the actual amount, but that's the minimum the IRS will accept. Needless to say, most tips go under-reported. With credit cards, however, when the tip is left on the card it goes into the resturant's POS system and your actual charged tips get reported.

    Of course the IRS loves the idea I'm sure.
    • Of course, you can tip exactly 10% on a card, then slip the waiter/ress another 8-10% as cash so they can pocket it.
    • Most tipped positions fall under IRS exemptions for reporting actual tips. If you have worked for tips at multiple places and are unaware of this, it is probably because your State has laws incompatible with IRS methodology on the matter.

      The IRS has multiple ways to get this exemption, but perhaps the most common is TRDA (as the employer knows it) aka TEPA (as the employee will know it.) Under TEPA the IRS has a low-balled estimate of your tipped income and taxes you on that estimate regardless of how muc
  • This note is legal tender for all debts public and private.

    So, if I order a meal, sit down eat it, and then go to pay in cash... what does the restaurant do? If I hand them cash that covers the bill, haven't I paid my 'debt'?

  • by waspleg ( 316038 ) on Saturday April 21, 2018 @08:59PM (#56480955) Journal

    I've never seen a place that won't take cash. But I know several cash only businesses.

    Why? Because the CC companies charge fees in the form of percentages of your purchase. I know several others who will charge you more for using a card too.

    The online equivalent, I've seen places put the charge for using something like Paypal back on your bill too.

    Usually the cash only places are awesome too, small businesses with no equivalent elsewhere, like a German meat market owned by an immigrant master meat maker.

  • by Bert64 ( 520050 ) <.moc.eeznerif.todhsals. .ta. .treb.> on Saturday April 21, 2018 @09:14PM (#56481035) Homepage

    It's not discriminatory providing cards are available to everyone without having to pay fees... Providing there are prepaid cards widely available, anyone can go to a convenience store and exchange their cash for a prepaid card.

    However, by using cards we're handing too much power to the card issuers.. Cash is issued by the government, but cards are entirely commercial so the companies wouldnt think twice about cranking up the costs once you're locked in and cashless becomes the norm.

    There's also the issue of standardisation... Visa and Mastercard are pretty universal and work almost anywhere, but there's also various local payment schemes. Many customers of restaurants are tourists, so if they're accepting a payment method that's only open to local residents you're cutting out these foreign tourists.

  • by ffejie ( 779512 ) on Saturday April 21, 2018 @09:34PM (#56481129)
    "For starters, upscale Millennials -- among the most coveted of diners because of their youth and affluence -- prefer to pay in cash, according to Bankrate.com data."

    I'm sorry, what? I'd love to meet these people. I'm in this demographic and there's 0 people I know who prefer cash. It seems like every time we go out, everyone is trying to throw down a card, occasionally there's a flurry of Venmo payments, but it's almost never cash. Upscale millennials are not unbanked, nor are they without access to technology or credit cards. Why would any one of them prefer cash?
  • Funny story (Score:5, Interesting)

    by cyn1c77 ( 928549 ) on Sunday April 22, 2018 @12:52AM (#56481869)

    Last time I was at a cash only restaurant, I only had 3 bills in the denominations of $5, $50, and $100 dollars. My bill was $15.

    So I try to pay (at the register) with my credit card and they say "cash only". At that point I am excited, because I actually have cash, which I rarely bother to carry. So I pull out the $50 and they would not take it because of fear of counterfeit dollars. They said they won't take any bill higher than $20.

    I was like "uh, your sign says 'cash only', it doesn't say 'cash only in bills less than $50'. If you don't take credit cards, you actually have to accept the cash".

    Long story short, they let me have my meal for free because they were afraid to lose money by making change with a possible counterfeit $50. I eventually went back later and repaid them because I felt bad, but it highlights the issues that they're facing: Afraid to take cash, afraid to pay the credit card fees.

    It also highlights how fucked up the money situation has become in the US. Some places won't take ANY cash. Some places won't take bills over a certain amount. Some places won't take credit cards. And if you are going somewhere new YOU NEVER KNOW WHAT THEY WILL TAKE! You used to be able to just leave the house with a $50 bill and be good to go. Now you have to have a bunch of $20s, your credit card, your ID (in case they check), and maybe your phone to pay with that. Things seem to be getting harder, not easier.

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