Is Cash Dead?

"According to the 2016 Federal Reserve Payments Study, noncash payments increased at an annual rate of 5.3 percent (3.4 percent in value), between 2012 and 2015. Debit, credit and ACH payments grew while check payments fell during this time period. A 2016 Gallup poll also found that far fewer Americans are using cash than five years previously. Only 10 percent reported using cash for all their purchases, down from 19 percent in 2011." (source)

Cash is undeniably in rapid decline, but the question remains: is it time for restaurants to finally wash their hands of it? 

87-store chain Sweetgreen CEO Jonathan Neman seems to say, in a word: yes. Neman told the New York Times that “at the six Sweetgreen locations where cash is not accepted, employees can perform 5 to 15 percent more transactions an hour.” And Philadelphia’s Bluestone Lane agrees, its CEO Nick Stone telling NPR: "We're talking about someone ordering and paying in roughly 40 seconds versus with cash, which is around a minute."

Airline foodservice is cashless, and many corporate dining facilities have opted to go both cashless and cashierless. Will restaurants at large embrace the trend? Here, a few questions to consider before making the jump...


1. How would a chashless policy play out chain-wide? 

If you decide to go cashless, you should plan to apply the policy to every single location. To build loyalty, restaurants aim to create a consistent brand experience. That means that customers should get treated the same way whether they walk into store 5 or store 75.

You don’t want to confuse expectations – especially when it’s a question of limiting, rather than adding options. Doing so chips away at guest confidence in your brand. Even if you pilot the strategy at a handful of locations, you’ll want to test with the intention of making a chain-wide decision.

Given the scope of the decision to go cashless, you’ll want to dig into your existing data…


2. How do your current customers pay?

What percentage of transactions in the last year were paid with cash across all your locations? Does the payment type breakdown vary from store to store? By time of day? Maybe your location near the retirement community tends to see more cash than your location near the university.

By mapping out existing consumer behavior and identifying anomalies, you should arrive at a good understanding of which customers pay by cash and why. With deeper insights into your customer base, you’ll be able to judge what kind of sacrifice you’d make by forgoing cash transactions.


3. What do you stand to gain by going cashless?

In general, eliminating cash means restaurants will see faster transaction times, greater efficiency (no bank runs), and less theft. But you’ll also have to hand over a cut of every transaction to your payment processor. You’ll want to establish a benchmark: how do your stores perform at rushes, and just how much volume constitutes a rush? Does the projected increase in efficiency outweigh the cost of credit card processing?

If lines form in front of a cashier, you’ve got more room for improvement than you might realize. When people decide what to have for lunch, as an example, they may see your line and judge the wait not worth it. Cutting down lines not only makes current customers happy, but it also entices future customers.


4. How do you tie a payment together with a rewards strategy?

It’s far easier (and less clunky) to tie a guest to their pattern of purchases when they pay by credit rather than cash. And of course, identifying an individual guest’s buying preferences is the lynchpin of most sophisticated rewards programs. If you have (or plan to have) a robust loyalty program, you may see significant benefits from customers paying only with credit. Cashless payments go exceedingly well with the digital technology restaurants are already adopting en masse.


5. Is going chashless the only way to accomplish your goals?

The benefits of dealing with less cash are clear. But -- cash is already becoming less popular without industries speeding its demise by banning it. What if you could gently push your guests to use credit without forcing “unbanked,” old-fashioned, or teenaged guests out? Pushing consumer behavior from 70% to 95% cashless would doubtless increase efficiency while continuing to please that small constituency of cash-users. The key is to incentivize the behavior you prefer: paying by card or by mobile.

An example: Self-Order Kiosks with credit card and mobile payments reward guests with improved speed-of-service. They can order and pay with one touchscreen, enjoying the gift of speed, control, and accuracy. When implemented correctly, most guests will want to pay at the kiosk. For the minority who do not: submit your order and then go to the counter to pay. The “wrong” behavior is allowed, while the “right” behavior is rewarded.


Ready to streamline operations?

Talk to us about how self-order can help you eliminate lines and improve speed-of-service at your restaurants.