Restaurants that don’t accept cash annoy some customers, but they benefit

The lunchtime queues at Dos Toros move faster these days — customers don’t look for bills or coins, and employees don’t take change. The Mexican grocery chain has been cashless since around the New Year.

“With the vast majority of customers, there is no reaction at all; They are already paying with their cards. And the vast majority of bar customers have no problem with it either,” says co-owner Leo Kremer, who runs 14 stores in New York and one in Chicago.

When people try to use cash, employees explain the reasons for the change – faster service for customers, time and money saved for the company.

The cashless trend among small and medium-sized businesses is fairly new. Many of the companies using this policy are restaurants, with menus and prices that are more upscale than fast-food chains, but with service that aims to be almost as fast as a McDonald’s or Subway. During a busy lunch hour with customers queuing at order stations and checkouts, not using cash means faster transactions.

Many business owners would rather go cashless. Cash actually costs money – banks charge fees for depositing cash and handling coins. If businesses are taking in enough cash to justify armored car pickups, that’s another cost, and since restaurants can be targets for muggings, they need those services. And counting and checking cash and preparing it for deposit takes time that a manager could spend with employees or customers.

“We believe a manager’s time is so valuable and it has been spent on just 10% of our revenue,” said Kremer, who also said revenue at Dos Toros was not impacted by the transition.

Millions of consumers use little or no cash. In a survey released last month by financial services firm Capital One, 21% of 2,000 respondents said cash was their most common way to pay for things.

But going cashless is not a bull’s eye. Some customers who want to use ATMs point to a paper money statement: “This note is legal tender for all debt, public and private.” However, the Federal Reserve says on its website that private companies have their own policies regarding cash unless there is a state law that requires otherwise. Massachusetts has such a law.

Thomas Nguyen went cashless at two of his restaurants – and then had a change of heart. Nguyen, which has three Peli Peli South African fine dining restaurants and one Peli Peli Kitchen fast casual in the Houston area, transitioned one restaurant in late 2016 and the other last August. Less than 7% of his earnings came from cash, and he believed customers would be broadly sympathetic to the change.

But last month, Nguyen heard from employees at both locations that they were receiving complaints on a daily basis. That, he said, goes against the idea of ​​running a hospitality business.

“It’s all too common for someone to be surprised or harassed every day,” says Nguyen.

He is aware that customers can find many other points of contact. “You can’t compete if you think you’re setting up a whole set of rules and you expect people to follow them,” he says.

One problem with cashless restaurants is that they exclude potential customers who don’t have a bank account or credit card. The Federal Deposit Insurance Corp. found in a 2015 survey that about 9 million US households were unbanked. Almost 60% of households without a bank account or card said they didn’t have enough money to open an account.

Customers will be more understanding when store associates explain why they are cashless and how it could benefit them, said Utpal Dholakia, a marketing professor in Rice University’s Jones Graduate School of Business.

“I think customers are very happy to trade their ability to use cash to get that service in return,” he said, noting the popularity of apps that people use to order and pay for groceries online or on their phones and the queue can bypass it on.

David Friedman received many complaints when he began testing a cashless policy at one of his eight Epic Burger locations in Chicago last June, before deciding to go permanently cashless at all stores.

“It triggered the most negative pushback of anything we’ve ever done,” says Friedman. He estimates his earnings are down about 2% as people who wanted to pay with cash left and never came back.

But Friedman does not turn back. Epic Burger locations have had one armed robbery, burglaries, and burglaries in eight years — a total of six incidents.

“I made the decision to put the safety of my customers and my employees first,” says Friedman, whose restaurants also received “dozens and dozens” of fake bills from customers.

Friedman’s lost income has been more than made up for by not paying bank fees and 30 armored car pickups a week.

As Tender Greens went cashless this year, other steps were taken to improve the customer experience, says Denyelle Bruno, president of the chain, which has 28 stores in California, New York and the Boston area.

Customers no longer have to sign billing slips under $25, and queues move faster because managers have more time to help. Tender Greens, whose menu includes salads, sandwiches, fish and chicken, doesn’t see customers getting frustrated as they stand in line and walk away, says Bruno.

Signs in the shops inform customers that cash is not allowed. But occasionally people are still surprised when it’s time to pay – and some don’t have another payment method with them.

“We give the guest the food [for free]“ in these cases, says Bruno. “Our goal is never to turn people away when they get to that point.”

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