Are Restaurants Going Cashless?
Restaurant payment methods are improving with the times. As the world advances, transactions are becoming more and more digital. Some restaurants have pushed to make technologically-enabled transaction methods not just a new, futuristic trend but the normto the point where they won’t accept cash payments at all anymore.
Before you decide to eliminate cash transactions at your place of business, know that this trend does have some very strong opponents. There are restaurateurs pushing for card or mobile payment-only establishments, especially in QSRs where card-friendly technology like self-service, mobile ordering and QR codes are on the rise. However there are also outright bans on cash-free establishments in two U.S. states and one city, while other local governments are considering the change too. In Massachusetts, New Jersey and Philadelphia, cashless businesses just won’t fly.
Why is this such a contentious issue?
Pros of Cashless Restaurants
Especially in the time of COVID-19, there are benefits to having transaction methods that don’t require passing money between countless hands. It’s safer for employees to use cashless payment methods, especially if your restaurant is equipped with near-field communication technology or mobile ordering.
There are material benefits for customers, too. Table turn times increase when you don’t have to wait for employees to count out and give change, so lines are shorter and customers can get in and out more quickly. There’s also less risk of human error when you eliminate cash, so everyone always pays and gets change that’s the right amount. This also means that employees can spend less time and effort balancing drawers at the end of their shift, which lowers your labor cost and lets them focus on handling more important aspects of the job, like providing superior customer service.
Moving to cashless transactions and relying instead on an all-in-one Point of Sale that can handle everything from managerial decisions to various payment methods will reduce your overhead costs, save time and keep guests and staff members alike safer.
Cons of Cashless Restaurants
In the U.S. today, 8.4M households don’t have a bank account and 22% of the population doesn’t have a credit card, so if you take away cash transactions then they have no other avenue for payment. Much of the reason that some jurisdictions banned cashless restaurants is because it’s considered a discriminatory policy against lower-income individuals. Even in states where it’s legal, you still run the risk of alienating poorer customers when you institute cash-free policies.
It also affects your finances as a restaurant to eliminate cash payments. Credit card processing fees can be expensive, typically falling between 1-4%; if this is eating into your revenue, you might have to raise prices on the menu to pay the difference but this, too, could drive away loyal customers who dont appreciate fronting your operational costs. Card payments also take a long time and can be slower than paying in cash, so if it’s slowing down lines to have to wait for everybody’s payment to authorize then it might be time to bring back physical money.
There’s more than just tangible revenue at stake here. You risk your reputation when you turn away so much of your potential audience. These days there are more and more conscientious consumersthose who prefer to frequent businesses that share their same values. They might not support a restaurant that seems exclusionary or classist against lower-income households who can’t afford to pay without cash.
Should Restaurants Make the Change?
There’s no right or wrong answer about whether your business should go cashless. It depends on the individual restaurant, who you have as a customer base and what you value as a business owner. When you’re considering the switch, think about:
Where you are. Credit cards are more ubiquitous in urban areas than rural ones, so it doesn’t make as much sense, if you’re in a more rural area, to eliminate the more common tender.
What type of venue you are. QSRs rely on speed while FSRs focus on quality of service and less on turn times. However, since card authorization can also be a slow process, you should consider how fast your guests want to get in and out of your restaurant when debating what transaction methods to allow.
Cost effectiveness. Card and cash processing fees can both cost a lot, so the best option depends on what will be the most profitable for your individual business. Some places choose to require a minimum spending amount for credit card transactions so as to offset some of the processing fees if they’re losing a lot of revenue there.
There’s no one size fits all answer to whether your restaurant should go cashless or not. It depends on the laws in your stat, your customer base and all these other considerations too.
Whatever you choose, advanced technology will still greatly improve the efficiency of your business. Whether working alongside or in place of cash transactions, eatOS makes restaurant management easy and improves the efficiency and profitability of your restaurant. Schedule a demo today and we’ll show you how we can help streamline your restaurant’s operationswhether you decide to give up on cash altogether or integrate cash-free transaction methods along with the more traditional form of payment. The future of food service is here.