Are You Still Accepting Cash at Your Business?

Gene Marks

If you want a taco at the 13-location Mexican food chain Dos Toros in New York City, you better bring your credit card. The same goes for the Dig Inn — a chain of locally farm sourced restaurants. And for salad eatery Sweetgreen, lunch-spot Two Forks, and coffee shop Bluestone Lane. As reported by The New York Times, these small businesses — and many others in town — don’t accept cash anymore.

In today’s world of PayPal, bitcoin, credit cards, and mobile payments, cash is slowly but surely becoming a questionable substance. “If you have exact change, we’ll take it,” an employee at a Greenwich Village restaurant said in the article. “We give it to the manager and he puts it in a safe. Because we don’t have a register.”

Should You Accept Cash or Credit Cards? Or Both?

The reasons are simple: Cash transactions take longer than a quick credit card swipe or a mobile phone tap. Credit and debit card data is better analyzed for margins, sales trends, and marketing, once gathered. Cash accounting takes management away from watching operations. With less cash floating around, the safety and security for employees is improved. But most of all — customers are driving the demand for it.

I often walk around with no bills at all because paying with a credit card is so much easier and faster.

In fact, I avoid stores and restaurants that stick to their old-school ways and only accept cash. This type of practice is becoming a thing of the past. Customers don’t like having to be the ones to make the extra effort to get cash (or paying fees at the ATM that is conveniently located in the store). We don’t buy into the “avoiding credit card fees” argument (are we really seeing that reflected in lower prices?). We sometimes wonder whether all that cash is being reported to the IRS and what exactly that tells us about the ethics of the proprietor.

So is cash in or out? Should you only accept credit cards or only accept cash? What’s the answer?

Cash or Credit? The Answer Comes Down to What Your Customers Prefer

If your research tells you that a significant number of them prefer using cash, then don’t be a dummy and don’t make life more difficult for them. If, like all these places in New York City, you’re finding that more and more of your customers are eschewing cash for some other type of payment, then it’s your job to make sure they have the easiest way possible to pay for your products and services.

Don’t want to pay the additional credit card fees? Then bake in the costs. Trust me — assuming a 2.5% transaction fee, your customers will still buy your delicious chicken marsala for $28.70 instead of $28.00. Concerned about the disruption of the new equipment? Don’t be — modern point-of-sale systems are easy to set up, relatively inexpensive, mostly secure, and essential to making transactions fast. Prefer to hide your revenues from the IRS? Well, I’m not going to help you out on that one.

So, maybe it’s not time for you to stop accepting cash altogether, but it is time to recognize that today’s payment landscape is rapidly changing and you have to change with it. Gone are the days of only accepting cash. Now, the trend has turned 180 degrees. Don’t fight this change — embrace it. Your customers won’t just be appreciative. They’ll expect it of you.

Gene Marks is small business owner. He has authored multiple books for small business owners, and is a featured small business columnist in many national online publications. He is co-host of the Small Biz Ahead Podcast

29 Responses to "Are You Still Accepting Cash at Your Business?"

    • Deward | April 19, 2018 at 12:36 am

      The sad thing about this is when the credit card companies, all those many years ago, first rolled out c/c they would pay the merchants a certain % to accept them. Then the c/c/c slowly started to decline the amounts given till it went to 0. Now the merchants have to pay the c/c/c to accept their cards. Yes they are making a tremendous amount of $ by their sly and clever tactics and we as a society have gone down that path. Do I use cc? yes however I still use cash and it feels good.

    • Nic an Fhleisdeir | April 20, 2018 at 1:44 pm

      How quaint? How condescending.

      Merchants are charged to accept cards for payment, so their costs go up. Because their costs go up, the prices must go up. Merchant is making less profit, customer is paying more and the banks…get paid for getting in the middle because of ‘convenience’.

      Every month the bank gets enough fees from me (my fees are extremely low) that I could have hired a part time employee. So, money to a bank *or* money to feed and house a person. Hmmm, how ‘quaint’ of a choice I must make.

      This article’s tone serves to shame businesses who accept cash, and assume that you are some sort of finance experts. That makes me want to find a new insurance company. Hubris is an ugly thing.

    • Eric D Kuritzky | April 25, 2018 at 10:35 pm

      Cash has no trail, no tracing, no record. Cash only loses value through inflation. Cash doesn’t charge you interest for being late making a payment. Cash can’t change the rules of use. Cash can’t be hacked. Cash is backed by the United States government. Credit cards are not guaranteed by anyone. If someone steal cash, you only lost the face value. Cash doesn’t require the internet or electricity. Cash is what drives the economic lives of people who can’t get a credit card.

      There is a place for cash. Cash ultimately backs the true value of all the credit cards.

    • DrHash | April 25, 2018 at 11:58 pm

      it sounds like the adviser that wrote this original post is in bed with the credit card company and The IRS , there is a-lot more uses for cash in the restaurant business other than hiding it form the IRS , if this is about ethics please tel me you don’t think that the IRS is Ethical in collecting more than their share and not putting people out of business ,we will always accept cash and will not celebrate the cc revolution .the fees are ridiculous and very unfair to be paid by the merchants at the least they should be split , sure its .70 difference in a meal is not much ,for a convenience ,but at the end of the month it adds up to 800.00 or double that .and the cost to take cash is not that costly and i get better deals from my vendors with cash to surpass these so called savings you are talking about . every dollar counts if the credit card company would stop enticing members of rewards that we pay for at the end we could save a lot and cash can stay the king , this is all what the IRS needs full control of what you spend money and how much you make , i am not going to give in to this BS for as long as it will take . i have a few different businesses and one of them has a high ticket items aprx. 4 to 5 k each sale , my cc fees at the end of the month is over $6500.00 really ? i can see if you have a lot of theft form the cash register how this will be better for a chain business , but it comes at a cost.

      • Elizabeth Larkin | April 26, 2018 at 9:24 am

        The author agrees with you. He says:

        “The answer comes down to what your customers prefer.

        If your research tells you that a significant number of them prefer using cash, then don’t make life more difficult for them. If, like all these places in New York City, you’re finding that more and more of your customers are eschewing cash for some other type of payment, then it’s your job to make sure they have the easiest way possible to pay for your products and services.”

    • Michael O'Shea | April 25, 2018 at 11:58 pm

      I regularly carry over $100 in cash.
      This might include $2 bills (Jefferson) and Sacajawea dollar coins.
      You got something against Native American women ?
      Cash is “Legal tender for all debts, public and private.”
      That makes not accepting cash unlawful .

    • Michael O'Shea | April 26, 2018 at 12:02 am

      I regularly carry over $100 cash.
      This might include $2 bills (Jefferson) and Sacajawea dollar coins.
      You got something against Native American women?
      Cash is “Legal tender for all debts, public and private.”
      That makes not accepting cash unlawful

    • Joanne Byrd | April 26, 2018 at 12:05 am

      You forget the cost of the fees banks charge to handle cash. You make cash deposits? The Bank takes a percentage. So does it really matter when the banks charge you for cash deposits? or the c/c/c? And look at your analysis statement closely, some banks charge for any deposit transaction, cash or check.

      Personally I prefer my debit card. While “Quaint” is a bit condescending, it does point out the issue. I only frequent cash only stores when there is something I specifically want that I can’t get elsewhere. Even my nearby Laundromat eschews cash now!

    • Bob Joyce | April 26, 2018 at 12:40 am

      I agree 100% with Nic an Fhleisdeir, your “How Quaint” position is not only condescending to fiscally responsible, cash carrying, pay as you go, customers, it plays directly into our ever devolving system of Not-So-Free Enterprise. Paying with plastic, debit or credit, costs everybody except the bank issuing the card because either the customer or the merchant (more likely, both) are going to absorb the fees the bank levies. It also plays into the hands of taxation at every single move and a society that knows our whereabouts via every single transaction. That The Hartford takes such a position in the world of Retail is an evident heads-up whose interests you most value.

    • CashPreferred | April 26, 2018 at 2:42 am

      Cash is legal tender of the United States. If your piddly company decides not to accept cash, then so long, farewell, Auf Wiedersehen, adieu … to you.

    • Danielle Kosikowski | April 26, 2018 at 3:27 am

      Cash is king.

    • Don Berger | April 26, 2018 at 5:16 am

      Besides the law in the US that currency is supposed to be good for all debts, public and private, steering people away from cash is steering them away from privacy and surrendering them to government or large corporate control. Sometimes convenience is not the best policy when it begins to chip away at people’s rights and freedoms

    • Rachel | April 26, 2018 at 7:42 am

      Very slanted article and irritating undertone. Feel like getting rid of my credit card in response.

    • Sam Kindred Jr | April 26, 2018 at 8:04 am

      So what about the constitutional issue? Isn’t American money still legal tender?

    • Shauna | April 26, 2018 at 8:12 am

      This article reads like it was written by a Merchant Services mole. So a handful of small business restaurants in NYC don’t take cash because it’s too hard? To what? Count?

      I’ll take whatever legal tender a customer wishes to use, but I encourage any form of payment that doesn’t involve me having to share a percentage with the already bloated bank.

      • Elizabeth Larkin | April 26, 2018 at 9:22 am

        The author agrees with you. He says:

        “The answer comes down to what your customers prefer.

        If your research tells you that a significant number of them prefer using cash, then don’t make life more difficult for them. If, like all these places in New York City, you’re finding that more and more of your customers are eschewing cash for some other type of payment, then it’s your job to make sure they have the easiest way possible to pay for your products and services.”

    • Jason Max | April 26, 2018 at 8:25 am

      As a business owner with multiple business locations providing a variety of services, if I were to be involved with anyone that spoke about cash in such a manner, I would question the knowledge of the person because that is absolutely wrong. Not accepting cash is a business decision that if it works for that business, good for them, but for the majority of business people I associate with, not accepting cash would be backwards. I find it interesting that I work with organizations that actually do not accept credit cards and only accept cash. They are thriving because many people have debt issues and a common habit to break when resolving debt problems is actually converting to a cash only (as best possible) lifestyle.

      • Elizabeth Larkin | April 26, 2018 at 9:22 am

        The author agrees with you. He says:

        “The answer comes down to what your customers prefer.

        If your research tells you that a significant number of them prefer using cash, then don’t make life more difficult for them. If, like all these places in New York City, you’re finding that more and more of your customers are eschewing cash for some other type of payment, then it’s your job to make sure they have the easiest way possible to pay for your products and services.”

    • robin glasgow | April 26, 2018 at 9:03 am

      the more payment options you have, the more business you will have.
      some people refuse to use credit cards.
      I refuse to dictate how my customers choose to pay.

      it is called living in a free society.
      I also refuse to patronize businesses who try to restrict my options.

      • Elizabeth Larkin | April 26, 2018 at 9:20 am

        The author agrees with you. He says:

        “The answer comes down to what your customers prefer.

        If your research tells you that a significant number of them prefer using cash, then don’t make life more difficult for them. If, like all these places in New York City, you’re finding that more and more of your customers are eschewing cash for some other type of payment, then it’s your job to make sure they have the easiest way possible to pay for your products and services.”

      • Elizabeth Larkin | April 26, 2018 at 9:22 am

        The author agrees with you. He says:

        “The answer comes down to what your customers prefer. If your research tells you that a significant number of them prefer using cash, then don’t make life more difficult for them. If, like all these places in New York City, you’re finding that more and more of your customers are eschewing cash for some other type of payment, then it’s your job to make sure they have the easiest way possible to pay for your products and services.”

    • K | April 26, 2018 at 9:22 am

      How quaint? Agreed very condescending. I use cash all the time, merchants prefer it, it’s simple, easy and there are NO additional fees for them. WHY, WHY, WHY would costs going up be acceptable to a customer, I don’t even understand that statement. As a small business owner and knowing many small business owners I can’t believe Hartford believes this to be true. Mobile apps are not reliable, cryptocurrency is not as it was originally intended, that would be like using a stock certificate to pay for something. There are several small businesses I know that only accept cash. They have no issues and their customers have no issues with it. Most businesses accept all varieties of payments. And inferring that small business owners want to hide profits? Really, they are the backbone of the country. There are deceptive people everywhere but the majority of small business people work crazy long hours (60 hours a week is the norm), care about their customers, do everything by the law and morally and ethical high standard.

      • Elizabeth Larkin | April 26, 2018 at 9:23 am

        The author agrees with you. He says:

        “The answer comes down to what your customers prefer.

        If your research tells you that a significant number of them prefer using cash, then don’t make life more difficult for them. If, like all these places in New York City, you’re finding that more and more of your customers are eschewing cash for some other type of payment, then it’s your job to make sure they have the easiest way possible to pay for your products and services.”

    • Cheryl Ramos | April 26, 2018 at 9:49 am

      I’m sooooo glad to read all of these other remarks. Glad to know I’m not the only one that is tired of having this shoved down our throats.

    • Deborah K | April 26, 2018 at 2:23 pm

      I use cash and my debit card … but that’s MY choice.

      I agree with others that using cash is being a responsible person who only spends what they can afford … credit card use is out of control in this day and age … which leads to people too far in debt, buying without thinking or planning their budget … then defaulting on their bills which raises the credit card fees because credit card companies pass those losses on to the people who actually do pay their bills… a vicious cycle and the only ones “winning” are the credit card companies/ banks

      after reading this, I think I will start paying cash more often …
      ALSO … by paying cash, “big brother” doesn’t get to learn your spending habits, track your lifestyle ….

      question regarding Joanne Byrd’s comment about the banks charging for cash deposits ???? What bank do you use ???

    • Steven Smith | April 26, 2018 at 2:24 pm

      I think the info here is completely wrong in almost every situation. The only way I see credit cards as being faster is at Mc Donalds. Every other place bombards you with seemingly pointless questions. Do you swipe or insert the chip. Lowes still makes you swipe even with a chipped card which I always insert and have to cancel the transaction. Do you want Cash Back? Do you want an emailed Receipt? Most of the time it is totally unclear that the transaction is not finished until the clerk stares at you for a few seconds and you look down and see there is yet another question. Hmmm… which card should I use? Which PIN did I set up for this card. Should I use my business card or personal card. Should I use my credit card to increase the warrantee? You altimately know you will pay for using a credit card because those costs are passed down to the customer or the business cuts corners to make that back.
      Saying they charge 2.5% is BS. I have used several processors and they all charge closer to 4% also a 20 cent per transaction fee. First Data Charged my company $150 per year, $50 per month and 20 cents per transaction. These fees are paid every month even if we did no business at all that month. Square is much better but saying they only charge 2.5% could not be more incorrect.
      There are only 4 advantages to cards that I see.
      Building credit history and having access to random amounts of funds and the ability to dispute a transaction and having a statement of purchases.
      If you get robbed it is not going to be a safety issue. I would rather give them some cash then risk getting shot or stabbed because they think I am refusing to give them money. If you see something nice at a sale, there are pretty good odds a private seller will only accept cash. If you want to tip someone such as a valet, are you going to ask if they accept credit? I have never in my life had a person refuse to accept cash. Credit is an entirely different story. I know a lot of businesses who charge extra to run a card. Lots of them are 50cents. Some are much more. My friend’s business charges 5 dollars extra to make up for that one person who wants to dispute charges and get something for free and to make up the processors fees. It happens a lot. He fixes iPhone screens and you would be surprised how many people drop their phone again and want it fixed again for free.

    • Steven Smith | April 26, 2018 at 2:32 pm

      “You forget the cost of the fees banks charge to handle cash. You make cash deposits? The Bank takes a percentage.”

      You have the wrong bank my friend. I have never in my life been charged to deposit cash! If I were, it would be in my safe at home.

    • KO | April 26, 2018 at 4:47 pm

      The author obviously knows NOTHING about credit card processing, restaurant pricing or margins, or the personal ethics of the typical entrepreneur. If you prefer cash, you are probably a criminal, indeed. How insulting. I clicked on this newsletter link because after years of credit card nightmares, I wondered why anyone still accepts them over cash at all.

      Credit card processing companies are the last unregulated part of the banking industry, and as such, can do just about anything they want to their customers, and they do it regularly, and hard. Every aspect of dealing with them is an expensive, time-consuming nightmare. If you want to really help small businesses, instead of tossing off snarky, uninformed puff pieces like this, you might want to take a look at a single, typical monthly statement from a credit card processing company, then come back and edify us about the wonderful advantages of credit cards to merchants. If you can decipher and understand even 5% of the fees larding up the typical bill, I will return and worship at your feet.

    • Ken Bunch | April 26, 2018 at 6:26 pm

      At our small company we recently stopped accepting “plastic” as a form of payment. Plain and simple, the account fees have gotten out of hand. Not to mention the compliance requirements security.
      When we ran the numbers at the end of last year, the decision was easy. We now accept virtually all payments by (gasp!) paper checks. The remainder of payments are received in cash. I now have more time to focus on my business instead of dealing with POS hardware issues and compliance & infrastructure costs.
      But what about depositing the checks and the time involved there? No problem. I deposit via online mobile device banking and snap a photo of the back and front and I’m done. I have an absolute log of all deposits along with check images – no fees either!
      It always brought a sideways smirk to my face when our clients would whip out their card and happily proclaim, “Use this! I get airline miles!”
      Then a confused look would creep across their face as they were returning their card to their wallet as I I asked, “Who do you think pays for those miles? I do!”
      They actually never gave it much thought. Our clients are happy to help us keep costs down when informed.

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