Why You Should Say Goodbye to Cash Forever (and Possibly Save Thousands of Dollars)
Is cash dead? It may be the hospitality business conundrum to end all hospitality business conundrums. Since tap-and-go payments became a thing, carrying cash has become somewhat of a burden. It’s a security liability, dirty (especially in a pandemic!), messy and time consuming to count, balance, and physically deposit or exchange. Dare we also mention the temptations dodgy operators can give into, gaining a competitive and unfair advantage over business owners who want to do everything by the book.
Old-timers often give the same reasons (excuses?) for keeping cash: merchant fees are expensive, we’re over-reliant on technology (what if there’s a blackout?!), there’s a loss of privacy and people “don’t tip”.
Here at Cafe Bookkeepers, hospitality finances specialists, we’d like to argue a case for going cash free:
It’s faster and more efficient and secure than cash payments.
The use of Apple/Google/Samsung pay applications on phones and other smart devices is becoming more and more popular.
There are little to no mistakes with keying in the total when customers pay. Plus, it’s quicker than dealing with cash.
You can automatically reconcile with takings and breakdown tips.
Research suggests customers feel less like they are spending “real money” when they pay tap and go.
These benefits come at a cost of course, namely merchant fees – they can really add up.
There’s been a lot of debate about surcharging your customers for using EFTPOS, given the benefits it brings to the business. The idea of adding an “unexpected” fee at the point of sale is tricky for some business owners – others see it as a minor fee customers don’t mind paying in return for the convenience of tap and go. There’s also the idea merchant fees are simply a cost of business and should be absorbed into the margin. But how often is this really the case?
For restaurants and bars, where the average transaction value is higher, the fee can feel less significant. However, for cafes, where a typical sale might just be a takeaway coffee or two, the fear of upsetting customers with a fee just to pay with a card – in a competitive market – is fair and real.
Cafe Bookkeepers’ Tips:
Here at Cafe Bookkeepers, we believe, and know from client intel, a small charge relevant to the convenience of payment method is an understandable expense for most customers. It's an easier step to make than to increase prices to a funny-looking $4.16, for a takeaway coffee to cover that cost to you, on the menu.
Activating dynamic surcharging through software such as Tyro is also very effective in mitigating this “issue”. One of our clients, Dead Ringer in Surry Hills, Sydney, made an annual saving of just under $20,000 in merchant fee expenses, just by activating dynamic surcharging through their Tyro EFTPOS system.
To be an early adopter of these charges would have been a small risk, but in major cities this is now the norm. When big players like Merivale take the step, they essentially normalise it in their area.
Have you gone cash-free and integrated dynamic surcharging yet? Get to it NOW and start saving your business real money.
Need help with your hospitality business’s finances? We offer tax accounting, managed payroll, new-business set up and bookkeeping for hospo businesses.
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