Some Cafes Going Cashless

by Raymond Pucci 0

You can leave home without it—cash, that is. Some casual food shops are finding that not accepting cash payments speeds up their order fulfillment and wins approval from customers, as the following article reports.

General Manager Erica Ritchie smiled politely before breaking the news to the young woman with a $10 bill in her hand.

“We’re actually cashless,” said Ritchie inside Bluestone Lane, a bright cafe in the shadow of City Hall in downtown Philadelphia.

“Oh,” said the young woman, a bit sheepishly, before handing over a credit card to pay for her small coffee.

By now, Ritchie is used to the exchange, though it’s not terribly common anymore. Most of Bluestone’s customers are regulars who come because it’s close to work — and because they rarely carry cash. They like the reassurance in this food-crazed city that they won’t need it.

“I can’t remember the last time I got out cash. Probably like a few weeks ago – a month ago? Maybe something like that,” said Samuel Foote, a social worker in the office building above the cafe, as he waited for banana toast. “And it was like to give money to my father who doesn’t have Venmo.”

Bluestone, which now has 20 stores in the U.S., went cashless last October.

A big reason: Nearly 90 percent of customers were like Foote. They never paid in cash.

Another reason: The lines move faster when employees don’t have to make change.

“We’re talking about someone ordering and paying in roughly 40 seconds versus with cash, which is around a minute,” said Bluestone CEO Nick Stone.

Shaving that kind of time doesn’t make Bluestone more money. In fact, it’s more expensive to be cash-free because of the additional debit and credit card fees tacked on to each transaction.

Don’t expect cashless to become widespread in U.S. coffee shops and cafes in the foreseeable future. Despite consumer use of payment cards, and even as contactless payments are becoming more prevalent, many coffee shop customers find it convenient to use cash to pay. Nationwide chains will not turn away cash and practically all have loyalty based, card payment systems anyway. But there will still be some small chain cafes that will use cashless as a way to eliminate dealing with currency and coin handling. Could this be the beginning of the end for the veritable tip jar? Not likely.

Overview by Raymond Pucci, Associate Director, Research Service at Mercator Advisory Group

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