If you’ve considered operating as a cashless business, you wouldn’t be too far in left field from consumer trends. In fact, according to the Pew Research Center, 29% of Americans aren’t using cash for their weekly purchases and the trend is only growing.
With the availability and ease-of-use of digital payment methods, more and more Americans use cashless frequently. But does that mean that going 100% cashless is right for your business?
Here are some pros and cons of cash vs. cashless to help you make an informed decision.
The Benefits of Going Cashless
- Save time and money on cash management. Businesses spend a lot of time managing their daily cash flow, from handling transactions to accounting for each cent at the end of the day. While making money is a good thing, the side effects of cash management can prove costly when you start to examine how much time and money is spent on it every day.
- More efficient checkouts for customers. No one likes to wait in a line behind someone who is counting their coins to pay with exact change. It’s time-consuming and tedious for both customers and employees alike. Going cashless means that you can streamline the checkout process. This means you can perform more checkouts with accurate amounts, and increase your customers’ satisfaction by getting them in and out faster.
- Decrease your risk of cash robbery. Most of the time, the drawer being short is just a matter of benign human error, but sometimes employees are maliciously skimming off your profits. There’s also the more extreme risk of armed robbery. If you have no cash, there’s nothing to steal.
The Drawbacks of Going Cashless
- Credit card fees will start to add up. If you’re only accepting cash, all of your transactions will be credit or debit cards. That means that those transactions will be subject to fees. You’ll either be forced to raise your costs to accommodate, or you’ll have to take the loss head-on. Either way, someone’s going to be unhappy.
- Not all of your customers are cashless. A national survey by the U.S. Federal Deposit Insurance Corporation shows about 8.4 million households were unbanked in 2017, most of which is accounted for by the elderly or low-income families. Depending on your clientele, you may not want to ostracize customers by not providing cash options.
- You make yourself vulnerable in other ways. While cash is susceptible to physical robbery, digital funds are still vulnerable to hacks and fraud, which comes with its own set of hassles and losses. Digital systems also rely on electricity and internet connection. If these go down, you’ll have no way to accept payments for transactions.
- The law may not side with you. While it might be touted as the future by some companies, there’s still a certain stigma about becoming a cashless business. Some states, such as New Jersey and Massachusetts, have outright banned cashless retail stores. Major cities are also following suit, with Philadelphia becoming the first major city to ban it and New York City, Washington, San Francisco, and Chicago considering similar legislation as well. Becoming a cashless business might prove to be an uphill battle.
If you want to reap the benefits without the drawbacks, consider setting your business up to promote the use of digital payments. You can accomplish this by installing cashless kiosks that will speed up checkout times and save money on employees. You can also offer rewards or perks for customers who choose to use digital payment methods.
While cashless may one day be the norm, we still have a long way to go.Get Started Now