The Cost of Being a “Cash-Only” Restaurant


It may be higher than you think.

A “cash-only” business model may seem like a guaranteed way to make sure you’re paid for services rendered, and to optimize your cash flow potential—but eliminating the option for customers to use other payment methods, including credit cards, may cost your business far more than you think. Here’s why:

Cash is no longer king. Regardless of your target audience’s age, data indicates that most consumers want the option to pay with a debit or credit card. Survey results from a poll reveal that plastic is becoming a more popular means of payment than cash—even for smaller purchases of less than $5, largely because of the rewards earning potential many cards offer, and the ease of use at the point of sale.

Your competition takes cards. If you accept cash only and your customers don’t have money in their wallet at the time they want to grab a bite to eat, you’re guaranteed to miss out on the sale, despite the quality of your food, your service, or the investment you’ve made marketing to customers. The fact is, more than 90 percent of full-service restaurants now accept credit cards, and 81 percent of the money spent at full-service restaurants in America takes place by debit, credit or pre-paid cards, notes the The Huffington Post. If you don’t accept credit cards, your customers can easily find a restaurant that does.

You limit your own order value potential. Consumers are more impulsive when using credit cards to pay, compared to cash. Citing a Dun & Bradstreet study, NerdWallet reports that consumers typically spend at least 12 percent more when using credit versus cash. (Supporting that data, McDonald’s reportedly has an average order of $7 when consumers pay with credit; their cash transactions have an average value of $4.50). Restaurants can utilize the decreased price sensitivity customers tend to have when paying with a credit card to upsell the most profitable menu items, including drinks, desserts, and appetizers.

Your staff’s tips (and satisfaction) suffer. Your reputation as a restaurant isn’t just about your food; it’s equally contingent on the level of service your staff provides to customers. In the foodservice industry, tips and gratuities can motivate wait staff to give service with a smile—and play a role in where they want to work, and for how long. When customers can only pay in cash, they may have to choose between paying their bill—and acknowledging the service they’ve received with a tip.

Your checkout processes are less than ideal. Studies indicate that consumers respond to the visual appearance of a line negatively—even if it’s moving quickly in reality. To add to that sense of impatience, a customer’s service expectations when dining out may be dictated by a finite amount of time he/she has at any given time in the day, including morning rush hours, afternoon lunch hours during the work week, and happy hour.

Regardless of how well-staffed your checkout line is, cash payments inherently involve time to give the customer the correct amount of change, and ensure that the change is correct. By contrast, a credit or debit card involves simply tapping or swiping a card—and may not even require that the customer sign for the purchase. If your restaurant offers mobile payment options that allow the customer to pay online, or while waiting in a take-out line to pick up food, you can expedite the checkout process even further to potentially eliminate physical wait times in line completely.

In 2015, Americans spent more at restaurants than they did on groceries for the first time in history. Forbes reports that the average American spends at least $1,000 a year at restaurants—and that’s just for lunch. Though the financial opportunities for restaurants is apparent, customers have more choices than ever. Attracting customers and gaining their loyalty requires that you offer the conveniences they’ve come to expect throughout their consumer experience—including the ability to pay with credit cards.  

The opinions of contributors are their own. Publication of their writing does not imply endorsement by FSR magazine or Journalistic Inc.

Kristen Gramigna

Kristen Gramigna is Chief Marketing Officer for BluePay, a credit card processing firm that provides its services to restaurants. She has more than 20 years of experience in the bankcard industry in direct sales, sales management, and marketing.


Written by someone who works for a credit card processing firm!

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