By Hans Eisenbeis
What’s Happening
• An upscale restaurant in Greenwich Village has pulled the plug on its traditional cash register; it no longer accepts cash, only plastic. Ironically named Commerce, its owners took a cue from American Airlines, which earlier this year announced that it would no longer accept cash for in-flight beverage and snack service.
• Restaurant managers said 90 percent of their customers were already using credit or debit cards anyway, so it wasn’t that much of a stretch to simply forgo cash altogether.
• They also said it eliminates the headache of storing and depositing cash, while it pleases the IRS—cash transactions make it easy to hide significant amounts of revenue.
What This Means to Business
• From a consumer point of view, nothing is gained by eliminating one payments option from the menu. Businesses need to be careful when developing operating efficiencies that benefit them, but may not offer anything to their customers.
• It’s true that plastic is the preferred method of payment these days, with a slight advantage to debit over credit cards. But cash does have its upsides, including flexibility and privacy.
• Many small businesses have taken the opposite approach: accepting cash only, as a way to avoid network charges and pass the savings along to their clients.
Comments