Notice more and more restaurants taking cash only

[SHELLY]

Those "cash back" cards are crapola, and the only money you are getting back is that which you and everyone else paid in the way of higher purchase prices as retailers have to increase prices to cover the costs of the cc services.

...not exactly, if the retailer isn't offering a discount for paying cash--others are paying higher purchase prices if they're not using a cash-back, no annual fee, credit card; I'm paying the same purchase price for the goods and services that they are, but claiming some cash back a couple times a year. I don't carry a balance on my cards, so it's all good.

.

 

[GoodWitch58]

My Visa/MC/Discover fees went from about 2% last year to as high as 4.8% recently and it is killing us on the CC sales. I don't want to go all cash as this makes it difficult for some patrons, but I am considering charging a $.50 to $1.00 fee to cover my added cost, if a customer chooses to use a CC. Do you think customers will gripe about this? Our small restaurant can't keep eating the cost. Opinions wanted?

Shea at Flip Flops.

I noticed that a restaurant over in Pier Park does the opposite: they reward the cash paying customer with a discount! According to the waitress, it works almost everytime and the customers are happy with it.

 

[30abob]

As a recovering food service business owner I know this dilemma all to well.

Merchant agreements with credit card processors have pretty strict requirements in almost all cases. It's a violation of the agreement to charge more for credit purchases, discount for cash purchases (everyone older than 34 remembers when gas stations did this), or require a minimum purchase amount for credit. If you see one of these practices it has probably NOT been approved unless you're dealing with a government entity. That doesn't mean it doesn't happen on a regular basis and the only real penalty to the vendor is possible loss of privileges with the card companies.

As for the potential tax issues I can only offer my own experience. I had a mix of about 75% cash sales vs. 25% credit sales. I paid "sales and use" taxes on every cent that ran through the register or card machine, there were never any profits to tax so I skated by on that one... unfortunately! During frequent conversations with other small business owners they remarked about the nature of my cash business and the inherent tax "benefits" stating that cash in their businesses never saw the bank - this audacity often surprised me. However, I'm not naive enough to believe everyone is as straight-laced as me or jaded enough to believe that everyone is on the take. As we move in in the direction of a "cashless" society these types of decisions may be made for us in the future.

 

[rheffron]

As a recovering food service business owner I know this dilemma all to well.

Merchant agreements with credit card processors have pretty strict requirements in almost all cases. It's a violation of the agreement to charge more for credit purchases, discount for cash purchases (everyone older than 34 remembers when gas stations did this), or require a minimum purchase amount for credit. If you see one of these practices it has probably NOT been approved unless you're dealing with a government entity. That doesn't mean it doesn't happen on a regular basis and the only real penalty to the vendor is possible loss of privileges with the card companies.

As for the potential tax issues I can only offer my own experience. I had a mix of about 75% cash sales vs. 25% credit sales. I paid "sales and use" taxes on every cent that ran through the register or card machine, there were never any profits to tax so I skated by on that one... unfortunately! During frequent conversations with other small business owners they remarked about the nature of my cash business and the inherent tax "benefits" stating that cash in their businesses never saw the bank - this audacity often surprised me. However, I'm not naive enough to believe everyone is as straight-laced as me or jaded enough to believe that everyone is on the take. As we move in in the direction of a "cashless" society these types of decisions may be made for us in the future.

I used to be in the business and still get some residuals. Everything you say in your first paragraph is correct. Check cards and Debit cards cost most Merchants about 45 cents depending on the Ticket amount. Rates on Credit Cards average around 2-2.5% plus a transaction fee around 20-25cents. There are other fees the Merchant pays as well.

Most people now have a Check Card and they are convenient to use. The thing Merchants do not take in to account when not taking cards is that studies prove that customers spend more when using cards instead of cash and that Corporate customers only go where they can use the Company Card. Hard to quantify how much a Restaurant loses in those cases.

If I were an established Restaurant owner with a track record of ATM only, I would try out Credit Cards for one year and compare my sales especially my average ticket price.

Maybe I should start a consulting company?

 

[SHELLY]

Maybe I should start a consulting company?

So you've given up on the MLM?

.

 

[Geo]

Assuming,assuming......

Great reply, Oli...

When I have friends in town and we go to Red Bar they always ask, "Why do they only accept cash/check?"

My typical response is-
"Because they can"...