Here’s something you don’t hear about very often – a store that doesn’t accept cash. It’s pretty rare but it is beginning to happen more and more. Stores not taking cash looks like it may become a trend. If you don’t think so, ask yourself how many stores still take checks versus 20 years ago.
In fact, a recent MarketWatch article cited results from a Euromonitor International study that indicates 2016 will be the first year ever that consumers will buy more with credit/debit/electronic payments than they do with cash.
Despite it sounding odd there are actually some compelling reasons to stop taking the green stuff. The first umbrella reason is employee theft reduction. It’s hard for clerks to steal something that you don’t have. If all transactions are run through credit/debit/electronic payments then there is no cash on hand. The same reason is also good for preventing a lot of robberies. Robbers can take product but there will be no cash to take and that’s usually what they want.
The second umbrella reason to get rid of cash is operating efficiency and convenience. It’s no secret that a lot of employees aren’t so good at counting change. Training can mitigate some of that but mistakes still happen and it’s usually at your expense. Some stores put any drawer shortfalls back on the clerk but many stores have multiple employees working out of a cash drawer and don’t track transactions by clerk.
The other tedious operations task – counting the drawer at the end of the day – can also be eliminated. All transactions made via credit or debit leave a paper and electronic trail and totals can be had at the push of a single button. All the necessary numbers are right there from a single report and don’t require counting a drawer and then trying to figure out why things don’t add up.
Another nice feature of not taking cash is that someone doesn’t have to take the cash to the bank and make sure there is adequate change at the beginning of the day. Eliminating the inconvenience of a trip to the bank is a real plus.
These are all pretty compelling reasons to think through what it might mean to your business to eliminate accepting cash.
On the other hand, there are some significant downsides to eliminating cash. The most important reason is that some people will no longer be able to shop in your store because they only use cash. Their credit rating or other issues may stop them from obtaining a credit card. They have cash, they just don’t have credit.
Also, the lack of banks in certain areas creates another problem in that some people don’t have debit cards because they don’t have a bank account. Again, they have cash but no banking presence. In either case, you could be missing out on a significant amount of business, depending on your clientele.
When making the decision to accept only credit/debit/electronic payments businesses often point to transaction fees as a disincentive. But if you look at the downsides of cash that we listed, the fees are offset by increases in operation efficiency, loss prevention and freeing up your time to focus on your store.
In the end, this is a decision you have to make based on your business and its specific parameters. But this will probably become a trend in the future because of the benefits it offers for those businesses where it makes sense.
