Cash Only vs. All Payments

[WaveDomer]

I'm starting a small biz this summer and the refreshment being sold is pretty cheap. I'm looking at being only cash vs. taking all forms of payment. I've done enough research to know what the upsides and downsides are of each. I was just wondering if anyone here has personal experience with this and how it works for you.

This could even be from a consumer standpoint. Are you really pissed when a place only takes cash? or do you know it so you come prepared? Again, we're not talking about $25 and up transactions. We're talking $3 and up. Thanks in advance.

 

[ND NYC]

need to consider a large group showing up and buying in a large lump sum. what about large pick up orders? will you be delivering anything?
if it were me--i would always have the CC option--but just dont know enough about what your biz is all about.
if want to limit the CC's i would offer Visa at a minimum (to start at least)...then MC...then Amex...then Discover.

 

[Catholics_Rule]

I'm an independent salesmen. When dealing with large or
Medium sized clients I'm usually paid with a PO and paid with checks of course. Now dealing with individuals and smaller companies I take cash or
Check only! I could take payments with credit cards but they take away from my profit margin and in a down economy and companies spending the bare minimum I need to take what I can. Hope this helps?

 

[Ndaccountant]

I rarely go back to a business if it is cash only. I prefer credit transactions since:

1. I get good points/rewards
2. I can better track how I am spending my money.

I typically spend less than $20 of cash per month, so it really annoys me when I am forced to.

 

[greyhammer90]

I'm starting a small biz this summer and the refreshment being sold is pretty cheap. I'm looking at being only cash vs. taking all forms of payment. I've done enough research to know what the upsides and downsides are of each. I was just wondering if anyone here has personal experience with this and how it works for you.

This could even be from a consumer standpoint. Are you really pissed when a place only takes cash? or do you know it so you come prepared? Again, we're not talking about $25 and up transactions. We're talking $3 and up. Thanks in advance.

Depends on what you are, who your customers are, etc. If its at all something that you want people to come in off the street I'd say a CC option is necessary. I never carry cash unless I need it ahead of time, most people my age are the same way. (23).

 

[D-BOE34]

Only thing I can add really is we had a snow cone type place in town that did ok business as cash only. (Like $3 for largest size) They went with SQUARE and ran CC payments from an Ipad. I talked to the owner and he said business picked up right away but ended the season at triple in sales. Net profit wasn't triple due to the small fees but he was definitely happy with the change. The difference was customers could just drop by instead of planning it out. Not as many folks carry cash like you would think. Something at that price point can be an impulse buy without feeling guilty. If you don't have cash on you, you can't have that option anyway.

Not really sure this is exactly like what you will be doing but you get the point. Good luck!

 

[WaveDomer]

need to consider a large group showing up and buying in a large lump sum. what about large pick up orders? will you be delivering anything?
if it were me--i would always have the CC option--but just dont know enough about what your biz is all about.
if want to limit the CC's i would offer Visa at a minimum (to start at least)...then MC...then Amex...then Discover.

It's a walk up Italian Ice kiosk. No delivery. No large pick up orders. At some point we might package it. I also lean towards always having the CC option too. That's just the world we live in now, but for my biz it would be more expense and potential more hassle with charge backs etc. The minimum is an interesting idea. We spoke to a CC processing company and they said due to our potential volume etc. it probably wasn't worth it to go with them. They pushed us towards Square, which runs those little readers you see on iPhones etc.

 

[GoldenIsThyFame]

Never carry cash unless I know ahead of time. I have seen a lot of our farmers market vendors opt for the Square readers.

 

[bobbyok1]

I have a shaved ice building (we do "snow cones") that has both drive thru and walk up and we only take cash. I think it mostly depends on your location. We are in a small town (10k population) where there are still a few cash only businesses. It is pretty normal here for us to be cash only. We considered doing credit, but we have so few people who actually ask for credit transactions. Literally a handful last year. In a bigger market where there are fewer cash only businesses it might be worthwhile.

Would you expect regular repeat customers in your market? If so they would get to know your cash only policy and adjust accordingly. If not, I personally would look into a cheap credit transaction option like "square" card reader or something of that nature.

 

[goldandblue]

Take credit cards... What is cash???

 

[WaveDomer]

Never carry cash unless I know ahead of time. I have seen a lot of our farmers market vendors opt for the Square readers.

Yeah, this is pretty much where I'm leaning right now. I think the downside of CC (extra cost, charge backs etc) are outweighed by the benefits (convenience, people spending more because it's just swiping a card etc). Actually, Square has an entire set up that turns a tablet into a POS system with cash drawer and printer for receipts. Pretty slick. I appreciate the feedback. I knew I would get good and varied feedback here.

 

[bobbyok1]

Only thing I can add really is we had a snow cone type place in town that did ok business as cash only. (Like $3 for largest size) They went with SQUARE and ran CC payments from an Ipad. I talked to the owner and he said business picked up right away but ended the season at triple in sales. Net profit wasn't triple due to the small fees but he was definitely happy with the change. The difference was customers could just drop by instead of planning it out. Not as many folks carry cash like you would think. Something at that price point can be an impulse buy without feeling guilty. If you don't have cash on you, you can't have that option anyway.

Not really sure this is exactly like what you will be doing but you get the point. Good luck!

What size town are we talking about? I am in a similar situation with my business and have seriously considered doing a SQUARE reader (actually have had one for awhile now), but didn't know if it would be worth it.

 

[cody1smith]

my credit card processor hits me for around 3 percent a month. simple math 1000.00 on credit will cost around 30.00. if your average sale is 3 dollars and you make 50 percent on what your selling. you will have sell 30 to break even.

 

[D-BOE34]

What size town are we talking about? I am in a similar situation with my business and have seriously considered doing a SQUARE reader (actually have had one for awhile now), but didn't know if it would be worth it.

Springfield, MO

It's not a huge town but not the smallest either. Lots of college kids when school is in. Town dies during summer. Shaved Ice is actually what I was talking about just couldn't think of it at the time. Obviously, it depends on location and customers.

We had a guy downtown that would sell hotdogs and pizza for $5 cash only. He sat right in the middle of an alley way when bars let out. You had to pass him to get out of most the bars. He would do cash and move quick to sell as much as possible. That would be a reason I could see cash as the only advantage.

 

[BobD]

IMHO You should build the cost of taking cards into your product, hardly anyone I know carries cash anymore. Even if you live somewhere that cash is still common you should build your company prepared for the future. Also cards are a great safety and loss prevention tool. You'll probably never have employees steal credit card slips and cash invites hold ups.

 

[BobD]

Another thought on cash vs cards to maybe save yourself some sick days.

Dirty Money


MOODBOARD / CORBIS
All money, it turns out, could stand to be laundered: the stuff is filthy. Studies show that a solid majority of U.S. bills are contaminated by cocaine. Drug traffickers often use coke-sullied hands to move cash, and many users roll bills into sniffing straws; the brushes and rollers in ATMs may distribute the nose candy through the rest of the money supply.

Also found on bills: fecal matter. A 2002 report in the Southern Medical Journal showed found pathogens — including staphylococcus — on 94% of dollar bills tested. Paper money can reportedly carry more germs than a household toilet. And bills are a hospitable environment for gross microbes: viruses and bacteria can live on most surfaces for about 48 hours, but paper money can reportedly transport a live flu virus for up to 17 days. It's enough to make you switch to credit.



Read more: Dirty Money - Top 10 Things You Didn't Know About Money - TIME #ixzz2QaoU9RQA

 

[Bogtrotter07]

It's a walk up Italian Ice kiosk. No delivery. No large pick up orders. At some point we might package it. I also lean towards always having the CC option too. That's just the world we live in now, but for my biz it would be more expense and potential more hassle with charge backs etc. The minimum is an interesting idea. We spoke to a CC processing company and they said due to our potential volume etc. it probably wasn't worth it to go with them. They pushed us towards Square, which runs those little readers you see on iPhones etc.

Understood.

I just took the kids out for ice cream last night, I went to the place that takes plastic. I will ask them who they use and how much business is plastic versus cash. I am sure that there is a big difference in locations; but the business is similar. Behind hours of operation that is usually my biggest decision for a food vendor.

The other thing I haven't heard anyone talk about is fraudulent orders running through your store. I think the need for security for a small vendor my be a prohibitive cost. The place that has credit card options, has over eight locations around town.

In addition to the cost of processing, fraudulent charges come out of your pocket. Typically, when someone steals plastic, or a number, they try it where? At a gas station or a fast food joint. Just to see if it works. And second, one bad employee, or someone scanning an unsecured wi-fi network, can go to town on you. Story is a local small business had a manager that did a second scan of cards and kept the verification information. Blew up all over them and the small business for which they had worked.

I finished The Maltese Falcon a short while back. I have to agree with you, having taken a second look!

 

[JadeBrecks]

As a consumer I can tell you I don't normally carry cash. If you sell something someone else sells and they take debit cards and you don't I will go to them. If you sell something nobody else does you will get my business when I remember to get cash out. I don't know how many people are like me but that is how I work as a consumer.

 

[rikkitikki08]

In a small business i usually expect to have to use cash. As society we have really gotten away from using cash in itself but usually i carry atleast 20 dollars on me at all times. It wouldnt be a problem for me but i can say for most it would be

 

[TerryTate]

The lost sales will outweigh the interchange free from credit card companies.

It's worth it to accept all forms.

You can always slightly markup the products if they pay by credit card.

 

[Irish Houstonian]

People also buy more with credit than cash -- more than the 3% more per purchase you'd need to make it back.

Between that and the lost customers who walk away and/or don't come back, I can't imagine cash only being the better option.

 

[WaveDomer]

Understood.

I just took the kids out for ice cream last night, I went to the place that takes plastic. I will ask them who they use and how much business is plastic versus cash. I am sure that there is a big difference in locations; but the business is similar. Behind hours of operation that is usually my biggest decision for a food vendor.

The other thing I haven't heard anyone talk about is fraudulent orders running through your store. I think the need for security for a small vendor my be a prohibitive cost. The place that has credit card options, has over eight locations around town.

In addition to the cost of processing, fraudulent charges come out of your pocket. Typically, when someone steals plastic, or a number, they try it where? At a gas station or a fast food joint. Just to see if it works. And second, one bad employee, or someone scanning an unsecured wi-fi network, can go to town on you. Story is a local small business had a manager that did a second scan of cards and kept the verification information. Blew up all over them and the small business for which they had worked.

I finished The Maltese Falcon a short while back. I have to agree with you, having taken a second look!

I currently serve and close manage a relatively big Mom/Pop restaurant. Cash is a rarity. But the price is a lot higher than Italian Ice and Italian Sodas. There are some problems that come with CC: system goes offline, power goes out, people want to dispute charges, security fears etc. The other issue is that any tip left is included in the total that the CC takes percentage from. However, that isn't a big deal to me, I don't mind paying employees and having happy employees. I know some restaurants will make servers pay the CC fee out of their tips. I would never do that and never work for anyone who did.

But cash also has some problems beyond the inconvenience for some: target of theft and people passing off phony money. Maybe I should just accept Bitcoin.

I appreciate everyone's feedback though.

 

[Black Irish]

I'm old-fashioned, I like cash. It forces me to be more disciplined with my spending. From a business standpoint, don't discount speed of service. I spent a number of years doing high-volume bartending, and cash was king. There was nothing more annoying than having four people buy one drink each and hand you 4 credit cards. That service slowdown cost me and the business money.

As others have said, don't discount what fraud can do to you. One of the locations of the restaurant group I work for had their CC information hacked and someone sold a bunch of CC #s on the black market. It took a lot of time and work to get it all straightened out.

People may say that cash only can cost you business, but it doesn't seem to hurt casinos. You can't buy a rack of chips with plastic. Having ATMs all over helps. If you do go cash only, make sure you are near an ATM. Better yet, you can buy your own. I worked at a cash only bar and the owner had an ATM right inside. So he made $ off the transaction fee from the ATM and made $ again when people bought their drinks.

My feeling, for your type of business, it's probably a toss up. Go with what works best for you.

 

[phgreek]

I rarely go back to a business if it is cash only. I prefer credit transactions since:

1. I get good points/rewards
2. I can better track how I am spending my money.

I typically spend less than $20 of cash per month, so it really annoys me when I am forced to.

Ditto...

not going to bore you with solutions...but there are some out there that are fairly convenient, albeit maybe cost prohibitive.

 

[phgreek]

I'm old-fashioned, I like cash. It forces me to be more disciplined with my spending. From a business standpoint, don't discount speed of service. I spent a number of years doing high-volume bartending, and cash was king. There was nothing more annoying than having four people buy one drink each and hand you 4 credit cards. That service slowdown cost me and the business money.

As others have said, don't discount what fraud can do to you. One of the locations of the restaurant group I work for had their CC information hacked and someone sold a bunch of CC #s on the black market. It took a lot of time and work to get it all straightened out.

People may say that cash only can cost you business, but it doesn't seem to hurt casinos. You can't buy a rack of chips with plastic. Having ATMs all over helps. If you do go cash only, make sure you are near an ATM. Better yet, you can buy your own. I worked at a cash only bar and the owner had an ATM right inside. So he made $ off the transaction fee from the ATM and made $ again when people bought their drinks.
My feeling, for your type of business, it's probably a toss up. Go with what works best for you.

...I can choke that option down I guess...

 

[CHIDomer9]

Do you think threads with the exact same title on an Oregon or Auburn recruiting board would contain the same discussion? Me thinks not.

 

[Ndaccountant]

I'm old-fashioned, I like cash. It forces me to be more disciplined with my spending. From a business standpoint, don't discount speed of service. I spent a number of years doing high-volume bartending, and cash was king. There was nothing more annoying than having four people buy one drink each and hand you 4 credit cards. That service slowdown cost me and the business money.

As others have said, don't discount what fraud can do to you. One of the locations of the restaurant group I work for had their CC information hacked and someone sold a bunch of CC #s on the black market. It took a lot of time and work to get it all straightened out.

People may say that cash only can cost you business, but it doesn't seem to hurt casinos. You can't buy a rack of chips with plastic. Having ATMs all over helps. If you do go cash only, make sure you are near an ATM. Better yet, you can buy your own. I worked at a cash only bar and the owner had an ATM right inside. So he made $ off the transaction fee from the ATM and made $ again when people bought their drinks.

My feeling, for your type of business, it's probably a toss up. Go with what works best for you.

Most states have laws against accepting credit cards. I believe the same goes for most state lottos.

 

[WaveDomer]

Ditto...

not going to bore you with solutions...but there are some out there that are fairly convenient, albeit maybe cost prohibitive.

All the solutions are convenient, it's just a matter of weighing the benefits v. the cost. And actually, this is true for the consumer too because the convenience of CC and debit has certainly increased the cost of products. That's why many bizs offer discount for use of cash. Although, across the board prices have inflated due to use of CC's etc.

 

[bobbyok1]

Springfield, MO

It's not a huge town but not the smallest either. Lots of college kids when school is in. Town dies during summer. Shaved Ice is actually what I was talking about just couldn't think of it at the time. Obviously, it depends on location and customers.

We had a guy downtown that would sell hotdogs and pizza for $5 cash only. He sat right in the middle of an alley way when bars let out. You had to pass him to get out of most the bars. He would do cash and move quick to sell as much as possible. That would be a reason I could see cash as the only advantage.

I got ya. I'm only about two hours west of Springfield. I'm in Pryor, OK (45 mins NE of Tulsa). Springfield is a pretty nice city, been there many times. Home of the original and largest Bass Pro!

 

[Irish Insanity]

I picked my weed whip up from the local repair shop today. I paid with my debit/credit card. He had an app on his Ipad, thru Paypal, where he could just type in my card info and I sign just as I would at a regular store, and that completed the transaction. I asked him and he said he thought it was a bit more costly than the Square as it has a monthly fee.