Question:
Dear Advice Guy,
I run a juice bar/coffee shop in a gym. Many of my guests pay with cards, contactless payment such as Apple pay or charge to their accounts because they don’t have wallets with them. I was contemplating going completely cashless to cut out a step but then saw that it’s not legal to do that. Do you think that will be a trend that sticks around?
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Answer:
I have seen more restaurants going cashless over the past couple of years, most notably Sweetgreen, Bluestone Lane and, starting next week, 12 Blue Bottle stores. At the federal level and in most states and municipalities, it is perfectly legal for an establishment to accept payment in the form it desires, as long as the rules are clearly posted and consistent.
The advantages to operators of a cashless business are many:
- Quicker transaction time (despite the chips that are slower than a swipe).
- Reduced risk of employee theft (no temptation to pocket cash for an item not rung up or to intentionally give inaccurate change).
- Sanitation (cash is one of the dirtiest items in a restaurant).
- Easier bookkeeping in an integrated POS.
- Greater accuracy of revenue (how rare is it to have a cash drawer accurate to the penny?)
Of course, there are some obvious limitations:
- Merchant and swipe fees on every transaction.
- Cash flow.
- Excluding guests who do not have plastic, including children, the “unbanked,” some international visitors or those who simply prefer to pay in cash.
It is this last category of people who do not have access to plastic that has restaurants on the defensive. Cashless restaurants have been controversial, with cashless bans proposed in New York, Washington, D.C. and San Francisco, and one recently passed in Philadelphia, effective July 1. Many municipalities have proposed to ban cashless payment systems for fear it discriminates against guests who do not have access to another payment method.
I do anticipate more cities following suit. For now, if you want to implement a cashless system, I’d encourage you to focus on making the environment for payment as digitally friendly as possible, encouraging but not requiring plastic or contactless transactions. I think it will appeal to most of your clientele. Just have a Plan B ready to go in case you need to make alternate accommodations to keep up with changing legislation and to be accommodating to all guests.
There’s more on the debate over cashless systems here.