Archive for the ‘Cash’ Category

Service of Cashless Restaurants

Monday, December 3rd, 2018

Photo: time.com

A recent Facebook conversation I followed was about coins. The writer said coins drove him nuts and suggested they should be canned. Most of the respondents disagreed for reasons ranging from saved coins helped pay for vacations to fondness for them. I pay for less and less with cash but am nevertheless on the side of saving coins if only for nostalgic reasons.

As I use my credit card a lot I’m fine with paying for food or anything else with mine. But plenty of folks are paid in cash or don’t have one for whatever reason. They also might not own a smartphone to access digital payment via Apple Pay for example.

Photo: infobarrel

Ritchie J. Torres, a New York City Council Member, says “the [cashless] business model is classist and racist,” according to Chris Fuhrmeister on eater.com. Torres said he sees the trend “as a way to gentrify the marketplace.”

Some 22 million Americans don’t have a bank account Furhmeister reported. An early adopter whose restaurant is now closed told him that if customers didn’t even have a debit card they most likely didn’t have a bank account and shouldn’t expect to eat in his [now defunct] restaurant.

Photo: shakeshack.com

Celebrity restaurateur Danny Meyer gave up the model in his Shake Shack burger chain because of customer complaints according to Fuhrmeister. His pricey Union Square Hospitality Group restaurants such as Union Square Café and Gramercy Tavern remain cash-free.

The impact goes beyond the poor. Furhmeister wrote: “Pittsburgh Post-Gazette reporter and critic, and former Eater NY editor, Melissa McCart made a salient point in her report on the topic earlier this year: ‘[I]n an era when an increasing number of restaurants no longer accept legal tender, it’s useful to think about who this system benefits most: the businesses and banks, at the expense of consumers.’ Do businesses and banks really need more power? It’s a question more local governments may want to consider.”

Photo: freecreditreport.com

There are other issues to consider, good and bad. A cashless retail business won’t be robbed. Also, many people pay the restaurant bill by credit card and leave tips in cash so that the right person gets the money. Would this continue or would the restaurant owner continue to control the tips? [Meyer, mentioned above, runs tipless restaurants as well.] The government must love the concept as there’s no revenue to hide from the tax man.

Do you pay for things mostly in cash, credit card or digitally? Do you like coins? Would you miss cash if it no longer existed? Do you agree with McCart that big time beneficiaries of the credit card/debit card only model are businesses and banks–Uncle Sam too–with consumers the losers? Will the cashless trend spread to other retail industries if it’s not stopped? Should the cashless retail model be outlawed?

Photo: freepik.com

Service of Cash or Credit

Monday, December 8th, 2014

Credit cards

I used to pay cash for most things when someone pointed out that the most accurate way to track monthly expenses is to pay with credit cards. It’s all on the bill: Food, gas, clothing or gifts. Spend cash and it’s too easy to forget small and scattered purchases.

I’ve only been sorry when a retail operation I frequented was hacked.

I never thought of cash vs. credit/debit cards from a businesses’ point of view and was fascinated to read **Vipal Monga’s story, “Reports of Cash’s Death Are Premature,” in The Wall Street Journal. **The online version of this story is credited to Bruno Mallart, but for the purposes of this article I will quote Monga as I read the newspaper version first.

What was amazing to me was how much it costs a business that deals with the public to get their money no matter how customers choose to pay.

control spendingMonga wrote that customers who prefer cash do so because of convenience, avoidance of cyber hackers and to control spending. I would add that some are paid under the table and would rather not alert the IRS by depositing cash in a bank.

Monga continued: “Paper bills and coins remain the No.1 choice for payments, used in 40% of all transactions in October 2012, according to the most recent study by Federal Reserve banks in Boston, Richmond and San Francisco. Debit cards were used in a quarter of all transactions and credit cards in 17%. Checks and all other electronic-payment techniques made up the rest.” If they spend more than $21–the average cash transaction–most opt to use checks or electronic payments.

CashIt costs $millions for a company to handle cash or credit. Where cash is concerned, costly challenges range “from transportation and storage to theft and loss.” According to a Tufts University 2013 study about companies, they “pay about $55 billion a year to manage currency….Most of it–$40 billion—was due to theft and loss.”

Some banks no longer maintain vaults for cash, wrote Monga, and they “outsource cash storage and use technology to count cash and credit their accounts.”

Pilot Flying JMore than half of the $2.5 billion the 500 Pilot Flying J truck stops pull in is in cash. It costs the company $20 million to manage the cash vs. $100 million for credit card fees that average 2 percent of each transaction. Costs to handle cash includes “the time employees spend reconciling accounts, depositing the money, and performing tasks such as getting change from the in-store safe. The company also pays fees to banks and armored-car companies,” wrote Monga.

Do you prefer to pay by credit or debit card, check or cash? Did you realize how expensive it is for a business to be paid for goods and services?

Pay cash

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