Should Restaurants Go Cash-Free?


One of the hottest debates in the restaurant industry is whether or not restaurants should go “cashless.”

Cashless restaurants do not accept cash payments and instead require customers to use credit cards, debit cards, cash cards, or contactless payment systems.

So, should your restaurant go cash-free? We’ve done some research and rounded up the most common arguments for and against going cashless.

Danny Meyer, who has led the charge against going tip-free, has already gone cash-free at four of the restaurants in his Union Square Hospitality group, mega chains Sweetgreen, Dos Toros, and Tender Greens have banned cash at all of their locations, and Dig Inn has gone cashless at most of its locations.

 Sign at the register of Meyer’s Daily Provisions via FourSquare user Chris M. Sign at the register of Meyer’s Daily Provisions via FourSquare user Chris M.

There are some clear reasons that more and more restaurants have been ditching cash.

First, it’s safer for restaurants to not have large sums of cash on site. If you don’t have cash, you’re far less likely to be robbed. Park Cafe in Baltimore was robbed five times in just four months before it went cashless in 2017. Not only is it safer to not keep cash on-site, it’s also cheaper. When restaurants accept cash, they transfer it to banks in armored vehicles. Doing away with cash lets restaurants cut that cost.

Going cash-free makes things easier for restaurant employees as well. At most restaurants, employees spend time counting cash and also change out cash trays in between shifts. Without having to manage cash, employees will be able to devote more time to their other job duties.

Many restaurants believe that going cash-free is better for customers too. Salad chain Tender Greens, says that going cash-free has been popular with their customers who are often in a hurry. At cash-free restaurants, customers merely need to slap down a card instead of searching for the right amount of cash and waiting for change. If everybody at a fast-casual restaurant pays with a card, the line will move much faster.

 Tender Green on a busy day via Inc Tender Green on a busy day via Inc

Moreover, when customers always pay with cards, it is easier for restaurants to track their purchases. According to Toast:

[It’s difficult to understand an individual’s buying patterns or reward them for their loyalty when they always pay with cash. If they use the same card every time, your machines will remember them. The same is true if customers pay with their smartphone using an app like LevelUp, which also helps them accumulate rewards points (plus, mobile payments are forecasted to grow to $142 billion by 2019). You’ll gain a better understanding of your individual customers with this data, which will drive your business insights.]

Also, paying with cards is way more sanitary than paying with cash. TIME reported just how germy cash really is:

[In a 2017 study published in the journal PLOS ONE, researchers swabbed $1 bills from a bank in New York City to see what was living on paper currency. They found hundreds of species of microorganisms. The most abundant were ones that cause acne, as well as plenty of harmless skin bacteria. They also identified vaginal bacteria, microbes from mouths, DNA from pets and viruses.]

The report also noted that cash can carry E. coli, salmonella and Staphylococcus aureus, all of which can cause serious illness.

It’s pretty unnerving that the same people who handle and deliver customers’ food are also regularly handling cash, isn’t it?

A statement released by Dig Inn about why they chose to go cashless at most of their locations echoes many of the sentiments of other cash-free establishments and adds that most customers now pay with cards anyway:

[In some of our restaurants, we’ve chosen to eliminate cash, accepting only debit/credit cards and payment through the Dig Inn app. We made this change in restaurants where 8% or less of transactions were cash. We exhaustively debated the decision, considering it from all angles before finally opting to go cash-free.

At Dig Inn, we carefully examine how every business action aligns with our values of sourcing ingredients from as close to home as possible, investing in our chefs, and serving delicious, vegetable-forward food. Most of our chefs’ time is spent prepping and cooking fresh produce, coaching kitchen teams, creating innovative lunch and dinner specials, and getting to know guests. All of this contributes to their growth and development as culinary leaders. But a sizable chunk of each day was dedicated to cash management – two hours to be specific. While we’ve got amazing cashiers tending the registers, our chefs are also restaurant managers and responsible for counting the cash, writing deposit slips, making bank runs, and buying change. Since we’ve removed the burden of cash from our teams, they can now devote their time and energy to serving guests and cooking great food.

Investing in our chefs also means investing in their safety. Moving to card-and-app-only payments means our teams aren’t holding onto large amounts of cash at any time, making them less of a target for theft in the restaurants or on the way to the bank.

As for your experience as a guest, eliminating cash leads to a more efficient and faster checkout, meaning more time for you and your sweet potatoes.]

Going cash-free sounds like a no-brainer, right? Not exactly.

Although there are some pretty compelling arguments for going cash-free, there are also some hidden costs.

By not accepting cash, restaurants are inadvertently discriminating against people who don’t have debit or credit cards (including ⅓ of Americans ages 18-37).

According to Linnea Lassiter, a former analyst at the D.C. Fiscal Policy Institute, employment status, income, race, and immigration status are among the biggest factors influencing whether or not somebody has a bank account. For example, many low-income individuals don’t have bank accounts so that they can avoid fees if they fail to meet a minimum balance requirement.

Cash-free restaurants also discriminate against teenage diners who are old enough to visit restaurants without their parents but too young to have their own bank accounts.

Some argue that refusing to accept cash payments violates customers’ legal rights:

[State lawmakers, a civil rights group, the National Retail Federation and a company servicing ATMs are all pushing back against the trend, claiming that refusing the greenback—on which  the US Treasury writes “This note is legal tender for all debts, public and private”—is simply un-American.]

Two years ago, Massachusetts signed a bill barring cashless restaurants into law. Now, other cities and states are mulling over legislation of their own.

On June 26th, D.C. city council member David Grosso introduced a bill that would prevent local restaurants from going cashless. The bill would make it illegal to discriminate against cash as a form of payment, post signs that cash is not accepted, and charge different prices for customers who pay with cash as opposed to a card.

Many restaurant owners also stand against the cash-free movement.

In an email to the Washington Post, Amsterdam Falafelshop owner Arianne Bennett wrote:

[Not everybody is able to buy a smartphone. Not everybody is in a position where they can get a credit card. Not everybody is even in a position where they have a stable bank account to be able to use the debit card. But they are hungry too and have $10 in their pockets and they would like to spend their legal American form of tender, known as cash, with you.]

So, should your customers put their cash away? As you can see, there a number of factors that you need to consider before deciding if going cash-free is right for your restaurant.

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