Inspired by this thread.
Could you have a no-cash shop business? Either ‘We do not accept cash or cheques’ or a stiff cash surcharge. You’d accept payment by debit card or credit card. Obviously you’d get hit for fees, but at what point would the fees be cheaper than the cost of handling the cash? Think time saved, no losses through theft, etc.
This link from the US Treasury establishes that it would be legal to do so.
The question as stated “Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment,…” implies that some businesses have done so.
I don’t have an answer on the relative costs, though.
I hate carrying cash! That’d be a dream come true if everyone did that.
There’s businesses in Florida that only accept WIC so if they’re legal I don’t see why a more generic non-cash business wouldn’t be.
I dont have any numbers but I’d also like to know how much would be saved by totally eliminating cash. I’d think that you’d have to go all the way rather than create a cash-only surcharge as a lot of the costs would be up front (cash registers, and any fixed costs for transferring cash to and from banks, or would those be more of a variable cost?)
Sam’s Club gas stations don’t accept cash.
I don’t see how handling cash could cost you? Unless you’re robbed every day, and if you are you really have other issues to consider first.
Also you could never really measure the cost of sales you’re missing out of. Suppose you don’t take cash and you lose even a small amount like $10.00 a day in sales that would’ve paid cash (365 days X $10 = $3,650.00 in lost sales per year).
So if you get robbed once a year and lose $1,000 you’re still over $2,500 ahead by taking cash.
There really isn’t much involved in handling cash. What a trip to the bank? Big deal find a bank that has a branch in a grocery store. You go to the store anyway, so now you have no extra cost, 'cause you’re going to the store anyway.
The huge variable is you don’t know how much you’re missing. I suppose there could be certain cases where it is no longer viable to take cash. Like if you own pay phones or a candy machine and they keep getting broken into.
Renting a car with cash is quite difficult.
What I found strange was that Japan culture still clings to handling paper money.
I thought that was ironic since we consider them to be technologically savvy with the latest cellphones, TVs, etc.
Consider the time component. How long does it take a shop to cash up at the end of the day? How long does it take to take that cash to the bank? Say it’s half an hour for each. That’s 1 hour per day, 6 hours per week, 300 hours per year when your shop could be open and earning money instead. How much does an hour cost? Say $100 lost net income. So you’d save $30K by going cashless.
Obviously that $100 is a number pulled from thin air, so I’m interested in what that number actually needs to be.
Using the only place I’ve handled cash, as a bartender, I’m going to say that $100 is closer to $5.00, if that. It takes about twenty minutes to cash out, and we were getting paid minimum wage. If there was a manager doing it, they were on salary (including the trip to the bank). This might be a special case, but I can never, ever imagine a bar going cash free.
There is also loss due to employee theft and errors in calculating change. Also, I might not need a safe if I don’t keep cash on the premises. So there are very real costs associated with a cash business.
I doubt much employee theft comes from people stealing actual money. It’s mostly stealing merchandise and not charging people for things. Also, most cash businesses will fire anyone who calculates change incorrectly in either direction on a regular basis (+/- $3 or so).
But is that more costly that the fees credit card companies hit you with, and the lost business?
My income is roughly half through a card machine and half cash.
I like cash because there are no fees attached to taking it - I pay myself in cash and also a lot of bills in cash at the bank (It’s only 150 yards away) to avoid their fees for both depositing the money, and for writing cheques or transferring funds.
Daily cashing up takes maybe 10 minutes, and some of that is waiting for machines to print out Z receipt totals, etc. On slow days I can do this before I officially close.
I don’t bank every day but when I do, it’s maybe 15 minutes tops to prepare it and 5 minutes at the bank to deposit it.
It doesn’t take that long and saves the 2 - 3% I’d be charged if it were all card sales… (fees for depositing cash are much less)
Biggest monetary theft I’ve had is when I made change off a twenty by mistake instead of a ten - her eyes lit up as she saw what I’d done and she literally ran out the shop!
Some airlines have stopped taking cash for in-flight purchases. Credit/debit cards only.
Ed
If we could eliminate cards we would. We’d prefer the 3% and when the store is busy a card transaction usually takes longer than cash.
On a recent flight (American Airlines IIRC), they said duty free and/or alcohol purchases could be made in any convertible currency. There were obviously expecting Pounds, Euro or Dollars. I didn’t buy anything, but as I had currency from UAE, Qatar, Kazakhstan, Czech Republic, Switzerland, Jordan and New Zealand (all of which are convertible), it was tempting.
You’d be surprised. One of the most common techniques is to pretend to ring something up and pocket the cash for the sale. Since there’s no record of the sale, it looks like product went missing. This is one reason many businesses want prices that end in odd numbers of cents.
When I worked at my campus bookstore years ago, the first security cameras they installed were pointed at the registers. One of the particular issues they had was a large number of employees using each register. Even if you knew that it was $100 short, four or five people might have used it.
I mainly use cash to maintain spending limits and to limit identity theft. It’s also the fastest way through a checkout. Companies who don’t want my money wouldn’t get it.
Using cash is 7 cents per gallon cheaper at gas stations in Detroit suburbs.
IME as a small business owner this type of work is done one of two times. After your scheduled close anyway or during downtime/slow times during the day. Avoiding cash still does not free you from making deposits of checks.
In addition cash actually has some potential benefits to some businesses that may be appealing in hard times. We generally prefer that customers pay by check, easier to keep track of, don’t need to make change, don’t have to share with the CC processor.