After my wife and daughter finished their delicious breakfast, they went to pay the tab only to learn that the restaurant didn’t accept plastic. Of course, that’s their right as there is no rule that they need to finance Visa and Mastercard, but it put them in an awkward position as they don’t carry much cash these days.
Fortunately, they were able to find enough to pay by scrounging for pennies at the bottom of a purse, but what would have happened had they not had the cash? No doubt regulars knew the rules, but there was no warning on the door or menu that only cash was accepted, so how would they know?
But the fact that some businesses have had enough of “plastics” glommng four percent off the top of their hard-earned revenues is the outlier. Many are going the opposite way, accepting cards but refusing cash. Can they even do that?
Though the U.S. Treasury notes on all bills, “This Note Is Legal Tender for All Debts, Public and Private,” there is no federal law mandating that all businesses accept cash. In the absence of an explicit law stating otherwise, merchants can decline any form of payment they like.
It might create a problem should a business call the cops if someone offers cash, the business refuses it, and the ex-patron walks out saying, “your choice.” But for businesses, cash is a headache. It requires employees to be able to make change, a skill no longer common amongst cashiers. It enables employee theft. And it presents problems when the bank teller asks you to fill out this form for the government. The government hates cash because it doesn’t know where people got it, can’t trace it, and might not be able to tax it.
But who really hates cash are credit card companies and internet payment apps.
Clearly a cash-free economy has its beneficiaries, foremost banks and credit card companies: Visa and Mastercard reap $138 billion from participating merchants in service fees a year. According to a recent report in The Economist, Visa and Mastercard are two of the most profitable companies in the world, with net margins of 51 percent and 46 percent last year.
You didn’t think these corporations did it for free, did you? But as it turns out, not everybody has plastic. In fact, a lot of people don’t.
But the most significant objection to a cashless system is whom it shuts out. Whereas cash enables everyone, no matter their age, credit history, immigration status or income, to pay directly for goods or services rather than use an intermediary, credit cards generally require a bank account. Not everyone — including 301,700 households, or almost one in 10 households in New York City — has one. And even those who do don’t necessarily want to add to their credit card debt. Regardless of whether they have a choice, teenagers and people earning less than $30,000 a year are more likely to use cash. This is also disproportionately true for minorities.
On top of those who can’t use plastic, there are people who prefer not to have credit card companies selling their every purchase or the government piece together their lifestyle from their statements. Cash is anonymous, and some people prefer privacy over shiny new cards with cool computer chips.
But as it stands, the choice is up to businesses unless a local law has been enacted as in New York City as to whether they are required to accept cash as well as plastic. And, as noted at Van Leeuwen’s odd yet expensive ice cream store, the law can still be ignored until the city does something about it.
Do we need a federal law requiring the acceptance of currency for all debts, public and private? Do we need a law requiring the acceptance of plastic just in case somebody relies on cards to transact business? If the point is for a business to be paid for its goods and services, should it be a minefield for consumers or should there be some reliable norm? But then, giving up four percent to Visa is quite a bite, though the government loves being able to access records of your every transaction. Where are we heading and where should we head?
*Tuesday Talk rules apply.
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If a business makes a choice not to accept cash/credit, knowing it will cost them customers, then that should suffice as far as what they are required to accept. The only caveat is that the business should be required to post a sign prominently so that customers know in advance and don’t find themselves in the situation of not having the “correct” method of payment.
Beyond that, what authority does government have to tell businesses how to operate?
This seems like a reasonable requirement that doesn’t infringe on any rights, business or customer. This should be common sense for a business, as it reduces unhappy customers and saves time by not having to explain the policy individually to each customer.
It is my worst nightmare to try to pay for something and be told “cash only” since I rarely have more than $5 in cash.
The airlines have been refusing cash for years. They may have been the first. But at most places, plastic is the presumption now. Businesses must save enough on pilferage and counterfeits to make up for the Merchant charge.
As the great Jean Sheperd observed years ago. “In God we trust: all others pay cash.”
This happened to my wife and myself at a seafood restaurant on the Santa Cruz (CA) Pier a few years ago. It was a celebration, we treated ourselves very well. Went to pay, no credit cards accepted! I was allowed to go to our car to search for change while my wife remained in the restaurant. Took almost every penny we had. (Pre-ATM days for me).
No sign on the entrance or on the menu that credit cards were not accepted. Must have been regular embarrassing scenes at the conclusion of expensive meals.
On the way home, I left my wallet on the roadside. (How I did this, no idea!) Luckily for us, the gas station accepted my wife’s card.
At least, Dave Matthews had been very good the previous day.
Ass, gas, or cash, no one rides for free.
A large amusement park near us went to 100% no cash this session. They had a lot of signage about the change. I also found it easy to deal with. Leave most of everything in the car, grab a card and go. That one card is not likely to fall out on the rides or get soaked when splashed no the water rides.
I’m sue the park found it a great idea since most of the employees are sessional and dealing in cash, closing out daily, providing starting change… all the issues with that go away. With all the food/drink, trinket and extras pay-points around the park, I’m sure it really is saving them a ton of time and effort.
do I like the idea that Big Brother has records of everything we buy? No. However, cards make so many things simpler.
Countries in The EU, such as France, now prohibit cash sales for more than 1000 euros. It is nearly impossible to live in France if you do not have a bank account, because you need one to pay all of your essential bills.
All to collect taxes and crack down on money laundering.
The problem for governments is that they benefit considerably from the seignorage for printing cash. Cash that is used by people in countries with bad financial systems or corruption. If the governments get rid of cash, all the people holding those $100 bills will need to spend them quickly. This happened in the EU when the euro took over from the national currencies.
I remember the first time I went to a fancy schmancy restaurant in Manhattan that ONLY took AmEx and here I was with MC & Visa and no way to pay> We did the same thing as Richard, with one person running out at a time to find money. While I waited, I chatted with the owners, who explained the rates and why they did this. The restaurant knew, that people like me would be put out, but their customers overwhelmingly had AmEx and so they didn’t care about our convenience. The preferable rates they received were viewed as more important than my pain and suffering at not having the ability to pay on the spot.
To quote my economics prof: People* respond to incentives. Maybe the answer is to incentivize stores to take more options for payment?
As a trustee at our local swim club, we never wanted to handle cash. Too many kids at seasonal jobs, meant that keeping track and preventing theft wasn’t worth the hassle, so checks only. The board was ancient and couldn’t handle the concept of digital, so until the board was turned over, it was old-school “chits”. Now, with younger members, we do credit cards, but still no cash. Our incentive structures changed so we changed too.
But what struck me most about what is taken & where, was when I saw a girl on the side of the road with a car that broke down. She was a driver for one of these insta-whatevers and her alternator went, stranding her. The insurance wanted to send the tow truck, but she had to provide a credit card (she didn’t have one) and everything was done through the “Cash App” on her phone.
I’d imagine in your line of work, you come across folks in that category at a far greater rate than I.
For me, it’s typically an inconvenience. For those without options (either because of bad/no credit) or wanting/needing to stay off the grid), it can prove to be impossible to navigate.
Perhaps the regulatory response (to the extent one exists) needs to take into account the need, as well. Emergencies can use any kind of payment, and restaurants are as posted?
* “corporations are people, my friend”
– Mitt
We went to visit the youngest son and his family and took them out to eat. The restaurant didn’t accept any cards but just happened to have an ATM in the lobby. Shrewd on their part, I thought.
20+ years ago the NYC Clerk refused my cash for a marriage license. Made me go to a bank and get a money order.
Not a corp, but the damn government.
And someplace in the back of my mind when the issue of cash/cards comes up, it still irks me. I hate to be irked.
(Just checked, and it hasn’t changed. )
I feel naked without a few hundred dollars in my wallet. Needing to pay money and not having it is a terrible feeling, even if it’s only at the grocery store and I just slink away without my groceries. Am I the only one who finds his credit card occasionally declined for no reason? I guess I could carry multiple cards, but I don’t like being in debt anyway. My first choice is paying with crypto, at the small (but increasing) number of places that accept it. Second choice is cash. Only as a last resort do I go into debt.
Where are we headed? CBDC. Our rulers love CBDC because it allows not only tracking but also control. Their attempts to destroy the crypto industry using agents like SBF (who will, Corzine-style, not be prosecuted) are based on their recognition that crypto is a better option and will win in the market. Where should we head? Crypto in a private wallet (not on the exchange where people like SBF can and will steal it).
No government lasts forever, and when it goes, it goes via a revolution or subversion. And revolutionaries prefer to pay their co-conspirators in cash for reasons that should be clear.
Up here in the Great White North we have Credit, Debit, Interac and most banks can transfer by email.
I was told that emailed bank tranfers are not available in the USA… pity.
Stores can easily setup a web site that accepts payments and presto… Pay online. Paypal!
The best solution is to look for a Visa/MC sticker in the window. If you don’t see one, ask them when you walk in. That avoids a lot of searching…
We have enough laws on the books, without needing new ones to enforce particular modes of payment.
Caveat Emptor!
If you come eat at Schwartz’s Deli, they only take cash… but there is an ATM in the store.
… and across the street, the Main Deli serves the same food, without lines and takes credit cards.
So many choices…
I know its not the anointed day of the week for personal comments but this personal experience so directly relates to your post that I could not help myself.
Son’s, 10, soccer team was celebrating the end of the season by gathering at a local pizza joint. My wife, whose staying at home, talks the place up, telling me how they have various beers and decent pizza. I head on over, find my kid in the scrum, and chat up the coach.
“Can I pay for something?” I ask.
“You’re welcome to buy a pitcher of beer, but you’ve got to use the QR code,” the coach said.
“What?”
“The QR code,” she said, pointing at a little red and white card glued to the table.
“Can I use any QR code?” I asked.
“No, it has to be specific to the table.”
I said OK, used my phone to take a picture of the QR code, and ordered some beer (for the parents).
Later, I get a text from my wife: Bring home pizza. Stupid me heads inside and stands in line at the counter. I notice signs everywhere saying “NO CASH” and imploring people to use the QR codes (which are also everywhere). But then I see a sign that says it’s OK to speak to a human (thanks). I also notice a POS device at the, um, “cash” register. That leads me to make a fatal error and assume that I can simply order to-go from the counter.
After about 5 minutes of the line not moving, a young person appears at the counter and gleefully shouts at everyone except for the person at the head of the line that if we want to order anything, we have to use the QR code. I sigh. Pull out my phone. Walk to the nearest QR code and begin to slog through an unnecessarily complicated menu. My son is getting impatient.
The “app” tells me that by ordering, I will automatically open a “tab” (even though all I want to do is get some food to go.) The app also warns me that if I fail to close the tab before leaving, it will automatically charge me a 20% “gratuity”. For what, I’m not sure, but I never asked to open a tab in the first place. The app offers no “to go” option, which fills my wallet with anxiety.
Although I’m only trying to order a large cheese pizza, minutes later the same cheerful elf who screamed at me earlier appears and asks if I’m having trouble with the app. “No,” I say, “I just want food to go.” She tells me to wait like everyone else and it will magically appear. I go back to the app to finish my order. Once I finally get to the “pay” screen, I notice it has given me three gratuity choices: 18%, 20%, or 25%. (I have no idea if that is on top of the 20% “gratuity” for failing to close out one’s tab after leaving with the to go order.) I mash some button, grab my pizza, and flee.
Cash is King; however, I will spare dear readers. I am a flea marketer and outdoor vendor..in the northeast for over thirty years. Twenty years ago, I took twenty-seven, or so, personal checks from all over the country at Brimfield, Mass.–one of our largest and most famous outdoor markets in the country. Not one bounced. I never asked for identification or anything like that. It was based on trust and simple faith in basic honesty.
Today, here on Capo Bacala, almost every show, someone asks if we take credit cards? Nobody has cash these days. Pathetic.! We point them ro the cash machine on site. Half the time, they fail to return, even after negotiating the sales price. These people are nuts. You come to a flea market and don’t have an Andrew Jackson in your pocket or pocketbook? How much did it cost you to get here and spend the nite/weekend/whatever?
We note in passing, the bear market/crash in “crypto currencies,” Do not think we did not warn ya! If it sounds too good to be true, it most likely is. More carnage is likely.
Furthermore my Dear Watson, RealEstate is the next shoe to drop. The problem with real estate is, it’s no longer real. It’s a paperwork game. How do I know that? Well, let me just say this about that? My landlord who raised the rent 45+% over the last four years is a “mortgage broker.” (He is not slouch when it comes to unearned incomes. We put $500,000 into his net worth by failing the inspection for three or four months. Go figure?!?)
Consequently, here at Billy Bob Headquarters, we’re predicting a bloodbath next year. Recession is on our doorstep, and none too soon. Liars, cheats and thieves, all of em, …trust it. Can you say tRump? Dow Jones Chow Mein makes a strong finish into year’s end, and then makes a double dip next spring. You herd it hear first!
We note in passing: Nancy passes the torch,… at the top of her game. She did what she had to do, and did it graciously and admirably. Luv ya Nancy.