Cashless Restaurants

Why go cashless? Why some cities are banning cashless restaurants.

Sign for cashless restaurant

A small, but growing number of restaurants are going cashless. That means they no longer accept cash as a form of payment but instead require credit card, debit card or payment through an online app. While that may sound crazy to many, online delivery apps such as Postmates, Uber Eats and DoorDash are already cashless. No cash transfer takes place from order through delivery.

So, why go cashless? There appear to be three main reasons cited in support of cashless operations:

Efficiency - It is more efficient. Less time is spent counting out bills, providing change, having small notes on hand, going to and from the bank with deposits etc. Less time spent on this also means lower labor costs or more efficient use of employee time.

Safety - Being cashless eliminates the chance of being robbed at gunpoint in the store or on the way to and from the bank with deposits and change.

Loss Prevention - Cash transactions are one of the largest sources of employee theft in most businesses. They are hard to detect, and employees can fairly easily cheat petty cash reconciliations. Missing cash is usually difficult to trace and impossible to recoup.

According to some studies less than 20% of people pay with cash in restaurants with some chains putting that number at closer to 10%. Perhaps, not surprisingly, companies like Visa are encouraging restaurants to go cashless as well.

However, recently lawmakers have been pushing back on this cashless restaurant trend. In fact, New Jersey just enacted a law banning cashless stores claiming they are discriminatory. In terms of the legality, cashless restaurants have been legal in all states except Massachusetts where the law says refusing legal tender is discriminating against cash buyers. With the move by New Jersey and similar legislation being introduced in New York City, it seems the cashless restaurant trend may be running in to trouble.

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