The newest tech trend in restaurants? Going cashless.
You read that right. If you think a business going cashless is crazy, you’re not alone. After all, how could the oldest form of currency not be accepted as payment?
While phasing out paper money entirely would be a huge undertaking, some restaurants have stopped accepting bills or coins. Some restaurant chain owners see the transition as a step toward the future, largely because restaurant point-of-sale systems make it so easy. Others tout the benefits of increased safety and cleanliness (more on that below).
The conversation on restaurants going cashless is new and growing. Below we identify the most notable arguments in favor of running a plastic-only restaurant.
- Not accepting cash eliminates the risk of thefts and reduces crime rates in general
The fifth time the Park Café & Coffee Bar in Baltimore, Maryland, was held up at gunpoint, the owner decided to remove the cause: cash. Taped to the café’s door the next day was a note that read, “Due to the recent robberies and continued crime in the neighborhood, we are no longer accepting cash.”
The move was intended to be temporary, but owner David Hart might not return to the old payment practice. As Hart explained to the Baltimore Sun, “Going cashless for me was something that I felt forced into, and yet now that I’ve made that decision, the feedback from the community has been very positive.”
Although Hart admits that several customers were annoyed at first when their cash was not accepted, they seemed to understand once the reason was explained. While 20% to 25% of Park Café’s sales were paid for in cash before the switch, Hart estimates that just 5% or 10% of customers paying in cash didn’t have a card. Other restaurants undergoing cashless transitions claim that business won’t be hurt since upwards of 90% of their sales are paid for with cards anyway.
Hart is considering ways to accommodate customers without credit or debit cards.
In the early ’90s, the government stopped paying out welfare in checks that could be cashed out, opting for electronic transfers that distributed debit cards to recipients instead. Over the next 11 years (1990-2011), the University of Missouri monitored crime rates in Missouri. The research team’s conclusion was that going cashless reduced crime statewide by 9.2%.
In other parts of the world, South Korea, Denmark, Norway, and Sweden have encouraged digital payment methods over cash. To reduce money laundering and crime, the European Union has plans to phase out the 500-Euro note by 2020.
In cases like Park Café, where crime is a constant threat, going cashless adds a new level of security.
- Going cashless is the future of business transactions
Fast-casual restaurant Sweetgreen, part of the sustainable food movement, will be going cashless in all 64 locations nationwide (excluding Massachusetts, where it’s illegal not to accept cash). Cofounders Jonathan Neman and Nicolas Jammet list crime prevention as a supporting argument for going cashless, but their real motivation is innovation. In an interview with Fast Company, Neman expressed confidence in a future that’s cash-free. “We believe the future is hyper-experiential and hyper-convenient. The middle is going to get squeezed out.”
Sweetgreen caters to a crowd that wants to eat something fast and healthy for lunch. The duo argues that by accepting debit and credit cards only, locations increase their meal output. The pair claims that card-only payment will not only improve efficiency, but this will make the experience more personal overall.
Considering that most people pay for fast food with cash, going cashless would seem counterintuitive. But after testing the cash-free payment model in select locations, the Sweetgreen founders are confident that it’s the right move. “Cash has become such a smaller piece of our tender,” Jammet explained to Fast Company. “When we opened nine years ago, it was 40%. Now, all stores are between 10% and 15%.”