[Dave Birch] I hate this. You wander off with a colleague to find a nice restaurant after a long day, you have a very nice meal and review the days events, then you ask for the bill and proffer your favourite payment card, only to be told that the restaurant is cash only. Thus I had no choice but to handle the filthy lucre and pass it over and I reject utterly the libel that I in any way opted to take part in this antiquated ritual.


It’s none of my business why any restaurant wants cash only — I generally assume that they are attempting some decentralised tax minimisation or are a mafia front — but they should be forced to display a prominent notice at the entrance if they are cash only. And if they are going to be cash-only, they might at least install an ATM, as the enterprising owner of “Friendly Toast” has done.

Many customers use the ATM machine to get more cash than they need to spend at the Friendly Toast and according to Melissa, stocking the machine isn’t difficult or time consuming. “We have to put about $10,000 in each week to keep it stocked, which has only made about a 20% dent in our overall credit card usage, but saving $12,000 a year or so in fees is a start”.

[From Commerce 3.0 – Restaurant Saves Money With Cash | PYMNTS.com]

Naturally, I started to wonder why, if this is so simple and saves so much money, they why don’t all retailers don’t just install an ATM next to the cash register and stop accepting cards. After all, in the example given, this would generate $60,000 additional profit per annum. It makes sense for retailers to transfer the cost of accepting payments away from themselves and on to customers in this way. And why would customers care, since there are no ATM fees, according to the article. In fact, surely customers would come in to use the free ATM instead of going to a bank ATM, and that might generate additional footfall. I would have thought, overall, that the disadvantages of cash (counting it, managing it, banking it, guarding it) are still substantial. And it’s also slower than paying with a quick swipe or a tap.

It turns out, Chipotle was rounding totals — both up and down depending on the price — in high traffic restaurants in New Jersey, New York, locations in Boston and elsewhere. The rationale: counting pennies takes time, and in restaurants that often have people lined up out the door, why not just round to speed the line along?

[From Chipotle Rounded Up on Purchases | Moneyland | TIME.com]

A much better option, of course, would be to stop taking cash altogether. And since almost all purchases would be under the “no signature” scheme exemption for online authorised transactions, either a quick swipe or a quick tap should suffice in almost all transactions. It’s time for action. Fifty years ago it made sense to presume that restaurants took cash and so they needed to put scheme logos on their windows to alert card holders that they were welcome. But this is the 21st century, and the presumption ought to be reversed. If food trucks can take cards, then for goodness sake restaurants have no excuse.

In the past, food trucks were cash-only operations. But today, they wield tablets and smartphones capable of accepting credit card payments and e-mailing receipts to customers at the point of sale.

“We figured that given our price point, we were going to have to accept credit cards from the beginning,” Doug Povich, co-owner and operator of the Red Hook Lobster Pound Truck says. “People really get excited when they come to the truck and see us using the latest technology. It’s not the typical POS that they see in a restaurant.”

[From Payment Industry Insights: Food Trucks: Where Mobile Payments Meet Mobile Food]

I think New York should set a lead, as Mayor Bloomberg has repeatedly demonstrated that he is prepared to legislate for the public good. I shall write to him about my poor restaurant experience there:

When I went to pay, I was told “we don’t take cards, cash only” and was directed to an ATM at the back of the restaurant. The check was almost exactly $100, so I drew $100 from the ATM, for which I was charged a $2.75 fee

[From Sign language]

And I’m not the only person who finds this odd. While googling for something else, I spotted this comment about New York restaurant payment habits on TripAdvisor.

Maybe I’m not used to NYC, but cash only in an upscale Manhattan restaurant? A serious pain in the butt for business travel and a forthcoming hassle with expenses. I should have left but was tired of looking.

[From Cash only! – Review of Sette Mezzo, New York City, NY – TripAdvisor]

As it happens, the restaurant that he’s talking about here is a very well-established and popular place that caters mainly to repeat customers and around 85% of the checks go on account and are settled monthly (thanks Quora!). Anyway, when I got annoyed about this last year, I said at the time that a prominent “cash only” sign on restaurant doors was the solution, but I’ve changed my mind.

Cash leaves much less of a paper trail. Waiters love cash, because it means they will be taxed based on seven percent of their sales, not the 15+ percent people usually tip. And that means more money

[From (223) Restaurants in New York City: Why are so many restaurants and stores in New York City cash-only? – Quora]

Aha. Isn’t this tax evasion? And, strictly speaking, illegal? Surely waitpersons are supposed to pay tax on tips?

I will tell Mayor Bloomberg that New York should become a beacon to the nations by enforcing a different payment paradigm. In order to obtain a licence to operate, a restaurant must by law accept debit cards without a surcharge and with no minimum spend. They should be free to surcharge for any and all other payment mechanisms, including cash, and they should be given some kind of tax break if more than 75% of their takings are non-cash (thus providing a compliance carrot, as is done in some other countries). This would be of great benefit to all law-abiding New Yorkers and their visitors from around the world.

These are personal opinions and should not be misunderstood as representing the opinions of 
Consult Hyperion or any of its clients or suppliers

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