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Jun 1, 2007 03:34 PM

What the heck: Cash only restaurants??? [ Moved from Ontario ]

Am I the only one who's getting increasingly frustrated at how many of Toronto's less pricey establishments (and grocery stores) are cash only? I don't usually carry cash with me and I'd strongly prefer not to. In my neighbourhood alone, I'd say that at least 25% of the dining options within a ten minute walk from my house only accept cash. Hearing "cash only" usually just irritates me and makes me lose my desire to frequent a place.

I was going to go to Ghali Kitchen tonight, but on a whim I phoned them and asked, and yes, cash only. My nearest bank machine is a good 20 minute walk away, too: not worth the effort for dinner for one who doesn't have a car.

If people here think about it, when mentioning a restaurant that's cash only, I think that I and others would greatly appreciate if that fact could be mentioned so that we are not caught unaware. (At least, I know that I'd be very thankful!)

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  1. Bothers me too. I think the cash-only restaurants benefit from a lower rate of taxation.

    1 Reply
    1. re: BarnNB

      Leslie Jones in Lesliville has a $10k espresso machine on the counter but they can't afford the credit card service fees? Please.

    2. "Lower rate of taxation" - as in the owners might not report all the sales. All other methods create a paper trail.....

      1 Reply
      1. re: ghetto_scarlem

        with the recent rise in credit card fraud can you really blame the restaurant owners for going with cash only, at least with cash there are cheaper preventive tools that they can use to detect fake currency but how do you deal with the credit cards.

        I personally was a victim of credit card fraud not too long ago, mind you that i don't have to pay the bogus charges but the restaurant that this criminal dined in just lost $3200 because of the fraudulent use of my card. so who in their right mind would not go teh cash only route especially if you are a small business that can't afford to absorb the loss.

      2. While the "lower taxation/skimming" may be true, I'm thinking that you are underestimating the impact of credit card fees on small biz. Depending on the number of transactions a restaurant does, and the size of those transactions, they really add up. I was a small shop with maybe 20-50 transactions/day, and my CC fees were many thousands of dollars/year.

        I applaud any business that feels that they make it without taking CCs, and without paying the Visa/MC monopoly.

        But if they were smart- they'd get an ATM machine on premise.

        3 Replies
        1. re: cheesemonger

          I personally don't think it's a big deal... for a small business (in a notoriously difficult industry) CC and Interac fees are enough to make the difference between breaking even/making a small profit and losing money. If a small takeout place like the Ghali Kitchen needs to be cash only to survive then so be it. As long as the policy is well communicated then hopefully regulars and people in the 'hood will get the picture. Cash is still legal tender in this country last time I checked... credit cards/interac are a bonus for us consumers and are close to being universal but they are not mandated for all businesses (as much as the banks would love the idea).

          I do agree that a place like Leslie Jones really should accept credit cards though... seems a bit odd given their persona as a hip neighbourhood dining spot. Especially when they are likely interested in upselling as much wine/booze as possible.

          Also, more specific to the issue at hand... isn't there an ATM in the convenience store right at Greenwood & Queen, next door to Ghali Kitchen?

          1. re: Vise

            There may well be a bank machine there; note that I said "my bank machine". While this may make me sound cheap, I would very strongly not prefer to pay $3 in service fees in order to withdraw cash from a generic ATM (note that this is 15% on $20). I have no opposition to losing $3, but I'd rather not do so to the banks. Heck, I'd rather Ghali Kitchen just invest in Interac and then charge me a $3 service fee; at least then I'd be supporting a small business.

          2. re: cheesemonger

            There's a group of beach bar & grills by me that does just that- "We are cash or check only. There's an ATM down the hall if you need it." I've got no idea why they'll still take checks when they won't take plastic, but they've been solidly to hugely profitable for the past ten years, so it's not a matter of worrying about a 2% margin making or breaking it for the business.

            The no credit cards policy has even gotten mentioned as a quirky feature/adding to the Old Florida throwback feel of the restuarant when it got written up for a nationally circulated AP article.

          3. I agree that restaurants and others businesses are free to insist on cash payment, even though it is less convenient to the consummer. I also like the idea that the Bank is cut out of the picture that way.

            However, it is easy for small business owners to see the money they lose each month in credit card fees. It is more difficult to see the money lost when customers pass by the restuarant because they don't have cash on them and it is a hassle to walk to a bank machine. I suspect that, given the margins, they loose more money to the latter; they just don't see it.

            Also, the fact that they do not use credit cards does not mean they they are avoiding taxes. When they use a little calculator next to the cash register to calculate you bill, then that pretty much means they are avoiding taxes. One of my favourite restaurants does just that - they keep and plastic pill container in the front well of the till to prevent it from closing and use a calculator to calculate the bill. PLUS THEY CHARGE ME GST!!!! I'd report them, but the food is too good.

            1 Reply
            1. re: BarnNB

              There is another issue that you have not thought about.. in some cases maybe they could not get a credit card machine. I know of a place that took 2 months to get a credit card machine for a new location even though they have another location that does a huge volume of credit card transactions (thousands of dollars per day). No explaination from the bank they just said it would take that long..

              Also if they have been the victim of fraud or have no credit card history it is getting hard for them to get a machine. Some banks want a large deposit up front to insure any losses.

            2. I have no way of knowing the specifics of CC operations in Canada, but here in the US I can get half a dozen places to set me up with fees of under 2% and per transaction of way under a dollar. Most of these offers come with little of no restrictions/minimums, other than having a legitimate bank account, proper tax IDs, and no negatives in credit history. Some of the processors are quicker to place the funds into my account, but none of these have terms worse than any of my suppliers.

              The convenience to my customers is HUGE, it saves me a ton of time and hassle in dealing with checks and/or large sums of cash.

              As to the "cut" to my margins, I think that this is not an issue, as the number of folks that would otherwise just cut their spend based on what cash they had on hand/in the bank is far greater.

              I suspect lack of sophistication/familiarity with the various offerings is the biggest obstacle -- most medium sized banks that have a sales staff to recruit small businesses offer the WORST rates, but once you see how the system works you quickly find that there are specialists who love to process credit cards. If the small banks can't match their rates I just have to deal with another layer, but I don't know if Canada can force "bundled" service...

              1 Reply
              1. re: renov8r

                Add minimum sales volume to the restrictions. Below a certain volume the rates go up. When I was a small rest owner the rates & charges averaged out to $.03 on the dollar.
                Also location plays a very important roll.
                Accepting CC/debit did not increase sales volume for me (small town/limited customer base). All that happened was the regulars switched from cash to card, so prices went up to cover the cost to me.