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Cash only?

What are people's thoughts on a restaurant's cash-only policy? We're talking sit-down, waiter service restaurants here, not delis or fast food, where the average check is at least $20.

I think it's poor service, in 2008, to impose a specific form of payment on diners when many diners reasonably expect--and would prefer--to use a credit card; the fees for accepting credit cards aren't terrible for transactions of that size, and 90%+ of restaurants (as well as grocery stores, which have much tighter margins) accept them with no problems--in some ways, handling cash is also somewhat expensive, though the costs are less and hidden.

The ones with ATMs inside the restaurant (with a $3 transaction fee or whatnot) deserve special scorn for what amounts to profiteering.


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  1. >>in some ways, handling cash is also somewhat expensive, though the costs are less and hidden.<<

    In one very, very big way it is less expensive by such a huge amount that it may make it all worth while for the restaurant to do this.

    8 Replies
    1. re: Servorg

      What might that be? Just curious.

      1. re: hsk

        The advantages of a "cash only" operation is that there are no chargebacks from the credit card company, no credit card fees, no bounced checks and the like. Also, if the owner wants to underreport his income to the state and federal tax authorities, it is much easier than if you do most of your business in credit cards. (Please don't say that this "never happens." I am a CPA and I have encountered this on several occasions over the years and I don't take clients like that.)

        The disadvantages of a cash operation include the fact that you have a lot of cash to deposit and either have to hire an armored car service or run the risk of getting robbed on the way to the bank. (Happened to my uncle once - he handed them the bad with the eggplants and they ran off with that.) Also, cash is much more likely to be stolen by employees. Also, as noted above, the IRS and local tax authorities audit cash businesses more carefully.

        1. re: hsk

          Oh one more disadvantage of "cash only". I don't carry cash so I won't come into your place.

          By the way, does anyone in New England accept credit cards because 90% of the cash only operations that I have encountered have been in New York and New England. (and I rarely travel in that direction).

          1. re: jlawrence01

            'Cash only' to me always smacks of reporting less to the government than those that take credit cards. They're not high on my list of repeat favorites.

            One of my favorite places (closed, sadly) places did not take credit cards but did take checks. I would have washed dishes to continue eating in that restaurant.

            1. re: dolores

              Assuming that cash-only automatically makes the management tax cheats is no more valid than saying that a restaurant that accepts credit cards must be completely above board. Any restaurant with a decent volume of business that takes credit cards will also take in a fair amount of cash--there are plenty of people out there (including contributors to this thread) who prefer to pay by cash even when the restaurant takes CCs.

              Accepting credit cards can actually make it easier to shield you from the authorities by creating two sets of books--one for credit card, one for cash. I can assure you that there are just as many restaurants accepting credit cards that don't share the cash books at all as there are cash-only operations that under-report.

              The biggest restaurant tax cheat in my area in recent years was an owner who managed to skim $2 million in collected sales taxes, and all his restaurants accepted credit cards.


              1. re: tubman

                That is all absolutely true. However, if you are an all cash restaurant and you don't go crazy with under reporting your sales then it is virtually impossible for the Government to catch you at it, (unlike your linked example above).

                1. re: tubman

                  I am not assuming that ALL cash operations are tax cheats, However, having said that the Internal Revenue Service and many of the state tax authorities have identified cash operations as having a greater risk of underreporting in their letters to tax professionals.

                  I can tell you that it is a whole lot easier for tax auditors to identify fraudulent underreporting when 80% of your revenues are coming through a credit card service.

                  Who is more likely to understate wage income on a personal return? The guy who gets a paycheck each month and who received a W-2 from an employer or a guy running a cash landscaping business? That is why you will see the latter audited more often.

                  1. re: jlawrence01

                    Largely agree, and the increased risk of audit is something that restaurant management needs to weigh before deciding to go cash-only. Point remains that truly dishonest operators will find a way to cheat the taxman, whether they're collecting payment in cash, credit card, puka shells, huge stones, whatever.

                    The bulk of the cash-only cuisines in my area reflect the ethnicity of their clientele, many of whom are largely on a cash-only basis for other aspects of their daily lives. It doesn't make a lot of economic sense to set up a CC account to accomodate 5% of your patronage used to paying by CC when that 5% would still visit anyway if you were cash-only.

                    There are some great meals not to be missed in many of these, and it would be a shame to miss them because of a self-imposed boycott rooted in blind speculation about the owners' honesty.

                    FWIW, the guy who's most likely to understate income (and get away with it) on a personal return is the one you don't mention--the one who gets a W-2 from an employer AND runs a cash business on the side. Plenty of those out there.

        2. I suppose it doesn't really bother me that much as long as the prices are reasonable. I like cash better than credit cards anyway. But it also depends on where the restaurant is and the availability of ATMs. While a restaurant is popular enough that it won't take reservations, it can get away with a cash-only policy. Less hassle, less chance of refused payment after the fact, less chance of mistakes, etc. Cash is cash, and once they have it, it's theirs. Waiters prefer cash tips, etc.

          As with any cash-only business though, it raises the possibility of sketchy dealing.

          5 Replies
          1. re: egit

            For $20/person type of restaurant -- I have no problem paying cash. If it was something more like $50/person, I think a restaurant should probably accept credit cards. Not everybody carries that type of money with them. I did have a problem when we had to pay cash for a banquet we held at a restaurant. There were over 70 people at the banquet. We had to bring a ton of cash. I'm definitely sure they're doing this to avoid paying taxes on it.

            1. re: Miss Needle

              Caterers frequently ask for cash/certified check because they don't want to get stiffed with a bad cc or a chargeback because the customer dissatisfied the next day. They also don't want to wait 30-60 days for the bank to settle with them, many don't have credit arrangements with suppliers so they need the money now. Wehn I ran a resto I had a large party that when it came time to settle the bill the card wouldn't cover it, I eventually had to split it across 3 cards.

              I'm with you on the sub $100 per couple cash is no problem, beyond that though I expect to be able to pay with a card.

              1. re: Scrapironchef

                While it would be nice to give the restaurant the benefit of the doubt, the restaurant has had IRS trouble, and was in danger of being shut down on the day of the banquet. It wasn't our choice to hold it there.

                For other catering events, I've always been able to leave a deposit and pay the remainder by credit card.

                1. re: Miss Needle

                  They were probably worried about having their bank accounts frozen and / or sized, if that wasn't already the case at the time of your interaction with them.

                  1. re: Servorg

                    Well, they didn't close down and I had to go to another banquet there a year later. They only accepted cash payment at that point as well.

          2. As long as it's clearly posted at the door (and maybe on the menu), I have no issues with it. I wouldn't call it poor service, but poor marketing, I'd expect they would lose more business than they make up by saving the cost of the credit card machine and discount. Maybe it's an old established restaurant that never had a merchant account and it's busy enough that they don't feel they need one.

            1 Reply
            1. re: hsk

              hsk, you make a good point. We have a lunch restaurant here in town that takes only cash, no checks or plastic. Their food is great, though, and while we all fuss about having to bring cash, it hasn't stopped us from eating there. To your point, it's busy enough that I suppose they don't see the need to accept cards.

            2. If a resto doesn't take credit cards, I don't go there - no problem.

              For the Church Fish Fry I'll pay cash but otherwise, fuggedabotit

                1. actually the fees for taking plastic are terrible. Here's the norm for most small restaurants:

                  monthly fee to your processing company approx $40
                  monthly fee to Amex (separate from other processing company) $40
                  transaction fee per each swipe of card - $2
                  transaction fee for each card entered manually (phone in orders for eg) at least 50c more
                  percentage for each transaction - anywhere from 1.5 to 3% for MC or Visa
                  5% for Amex or Discover.
                  So on a $20 check using Visa it is costing the business approx $2.25 - 2.75 and for Amex $3. At least 12% and as much as 15% plus the monthly fees. I think this is a lot of money for a mom and pop store.

                  Chargebacks are also a big problem. Here's examples of what happened to me when I had a restaurant. People would call for a pizza, give CC # over the phone, come and pick up, scrawl a signature on pick up. A couple months later I would get a chargeback from the CC company that the customer is disputing check. I would spend ages pulling out the transaction, send a copy to Visa or whoever, the customer would say that is not my signature. End of story. No appeal system for the restaurant.
                  Scenario 2. Customer would eat in, sign the check, take the signed copy, server didn't notice till customer had left, couple months later CC company write disputing charge, go through files, find note on transaction which I or server wrote on saying customer took signed copy, too bad say CC company, chargeback successful, restaurant loses yet again.
                  i would say this happens a few times a year. There is no appeal system in place, and whilst it was impossible to keep customers credit card numbers on file and use them fraudulently they still managed to successfully charge back on quite a few occasions.

                  8 Replies
                  1. re: smartie

                    Are the fees different for restaurants compared to other businesses? Because those are the worst rates I've ever heard of. My monthly fee is $12 and my transaction fee is 22 cents. The percentage for each transaction sounds about right, though.

                    1. re: Miss Needle

                      Miss Needle I don't know, possibly, but these were my first year's rates.

                      1. re: smartie

                        I hope your rates have improved. My first year rates were similar to what I pay now. It really pays to do your research. What I find the most insane is the transaction fee. Unless you're in a business where your transactions are an average of several hundred dollars or more, the two bucks per transaction will kill you. I use merchantsource.net.

                      2. re: Miss Needle

                        The fees vary a lot by processing company and business volume. Low volume businesses pay substantially higher fees.
                        Charge backs can be a significant problem.
                        Those small businesses that get roped into non-cancelable equipment leases can also have a monthly lease from $35 to $150 added to their costs.

                        1. re: Miss Needle

                          Costco merchant account fees(for retail businesses) is 1.64% plus $0.20. (for a $20 tab, that's $0.52). People really should shop around.

                        2. re: smartie

                          And you should be aware that there are restaurants that pass all or part of the expense on to their waiters...or at least used to when I was waiting tables! This was about 10 years ago so things may have changed, but a very nice place in NY used to take 2% out of credit cards and 3% from Amex tabs before giving us the tips. ($100 check with a $20 tip...$120 total on Visa or MC, cost me $2.40 - when I got "my" tip I got $17.60 - of which I had to tip out runner/busser/bar.) Now that I think about this, was this even legal? Any waiters work at a place that still does this?

                          1. re: foodhypnosis

                            My friend recently worked in a restaurant in Portland that did that. I told her she should not accept credit cards in her station! But she just dealt with it until she got another job. I've heard it's not legal, but I'm not clear about it.

                          2. re: smartie

                            My husband asked me about this one night when we were going to a restaurant with a Mon. night special, They only took cash on these evenings. He was afraid that they only took cash to avoid paying taxes, etc. I ahd to explain to him they have to pay a percentage of sales to the cc company and therefore, when giving a really good deal it is not in they're best interest to take cc.

                          3. The owners of such a business weighted the advantage and disadvantage of cash only and have chosen the cash only option. It's your option to frequent such a business or not.

                            I have heard of a restaurant in DC I think which only accepts credit cards or ATM, but no cash.

                            1. jfood does not like the cash-only policy but it does not move the jfood meter one way or the other. The only request that jfood has is that the restaurant please tell him when he makes a reservation. Nothing worse that placing the card on the table with the check and have the server tell jfood, cash only. Then he looks into his pockets and he might not have enough for bill, tip and cab.

                              1 Reply
                              1. re: jfood

                                As usual on these sorts of questions, I read through the thread, find jfood's take and note my agreement. As long as the policy is disclosed either when I make my reservation or before I've ordered anything then I'm fine.

                              2. I'm an artist doing the seasonal festival thing for a living and I do only cash or check because in order to accept plastic I would have to raise prices by $1.50 per item on my "bread & butter" items. Those are the reliable sellers that provide the greatest source of my income. I don't want to do that to my customers. I don't sell enough big ticket items to cover or balance out the fees on the small stuff. Yes I could run my receipts in batches to cut down on the per transaction fees but doing the research and checking out about every option I could with the help of my bank there just wasn't the justification there for the fees. Note that I have a 3-4 month down time for the winter where I'd still be paying fees but having nothing coming in. I do understand why many restaurants operate on a cash and check only basis. Even batching the receipts which a couple of the restaurants here do doesn't cut down on the over all cost of running plastic much. That said I don't carry much cash on me and rarely my check book so it is annoying having to go to the atm when I want to go to one of these places but I do understand their dilemma. Ok, moving cash from the festivals to the bank is scarey I admit but you get good at it after awhile. I carry a visible weighted and locked dummy cash box to my vehicle and once there my secreted cash gets put in a locked hidden strongbox built in my truck.

                                2 Replies
                                1. re: morwen

                                  When I did shows I would turn the cash into a money order & send to my bank in a postage paid bank-by-mail envelope - much safer! One of the best things about shows are the great restaurant tips from customers & other artists. Finding hidden gems helped balance out the long, hot days!

                                  1. re: meatn3

                                    Went to a place last night that was cash only, and after I thought of this thread, I have to admit that I realized that I don't like the policy. There were 'weekend specials' and their prices were not low, imo.

                                2. My favorite restaurant anywhere--a small, family-owned BYOB--has turned away business nightly for years as cash-only (and it's not inexpensive--~$60/head at the end of the evening). And all of this is based simply on word-of-mouth--they have no plans to expand, and have never spent a nickel on advertising or promotions (including a listed telephone number).

                                  If you ran an operation like this, why would you voluntarily give up 3+% of your gross?

                                  13 Replies
                                  1. re: tubman

                                    I find this mostly at smaller places and all the places I visit that request cash also take personal checks. It's also clearly posted on the door. I like eating at those places and thus plan to have cash or check with me when I visit them. I'm sure some people are caught unawares and that's why they've installed ATM machines; the fees from which are set by the bank, not the restaurant. Some are breakfast places, some are dinner.

                                    I think that the fees charged for credit card usage by these small businesses are terrible and I don't blame them for not wanting to accept credit cards. I want to support them, so I give them my money.

                                    1. re: rockandroller1

                                      Much as I love credit cards, I, too, pay cash if it's a family-run business (accepting CCs) where I know the management and have the cash available. I have no problem putting down my credit card and reaping a 3% cashback reward if I'm at a TGIRubyTuesdays-type place.

                                      "the places I visit that request cash also take personal checks"--probably because you're a regular. Don't bet on it if you're a first-timer.

                                      1. re: tubman

                                        No, I'm not a "regular" at any of these places. They have signs posted and on the check that say they also accept personal checks.

                                        1. re: rockandroller1

                                          Sorry, I meant to say ones that list themselves as "cash only." Places that list themselves as cash-only will usually take checks from regulars.

                                          1. re: tubman

                                            I guess I don't know what you mean. Anyone who comes into the restaurants I frequent that are cash only can pay with a check.

                                            1. re: rockandroller1

                                              In my book at least, cash=currency.

                                              Restaurant with "Cash and Checks Only" sign on door or on the dinner check--will accept either currency or checks from anyone.

                                              Restaurant listed as "Cash Only"--will accept only currency from first-timers, but if you're a regular customer, they'll likely accept your check.

                                              If you're a first-time customer, it would seem odd that a restaurant that's cash-only would gladly accept your check given the risk involved.

                                              1. re: tubman

                                                Gotcha. Most of the places that I visit that ask for cash also state they'll accept personal checks, but sometimes only when asked/it's not written on the menu. This is for the general public though, not because I'm some kind of regular. I think the risk question is n/a because this is still a relatively small town. I mean, we're not small, but we're not Chicago either.

                                              2. re: rockandroller1

                                                paying an establishment by personal check today is the equivalent of paying by debit card. the check is swiped through a machine and deducts the money from your checking account. the cost involved to the establishment is a lot less than accepting credit cards.

                                                1. re: byrd

                                                  If you were a salesperson selling check scanning equipment to a mom-and-pop cash-only business, your premise is certainly valid when you tell the owner that accepting a check as payment for a $50 tab might only cost him 50¢ vs. $2.00 for accepting a credit card.

                                                  But what do you tell the owner when he counters with "that's 50¢ more than I'm currently paying to process payments"?

                                                  Until it's clear that cash-only status is costing a restaurant a substantial volume of business, they'll remain that way.

                                                  1. re: tubman

                                                    Ever notice that most restaurants (even fast-food restaurants) accept plastic? Most of the studies I have seen indicate that sales increase on average of 15-18% as there is less emotional attachment as compared to paying cash.

                                                    1. re: jlawrence01

                                                      You're right. I once attended a focus group on credit cards. As I get cash back on my CC, I try to use it whenever possible. However, I noticed that the majority of the people tried to use cash when they could because they said that they spend less that way. It really is prudent business to accept credit cards (except when the business trying to avoid paying taxes).

                                                      1. re: Miss Needle

                                                        That depends on location and type of restaurant. In my former restaurant when I started accepting CC/Debit, my business did not increase as I was told to expect by the merchant processing rep who convinced me to accept CC/Debit with many glowing promises.
                                                        The only thing that happened was existing customers began using plastic and my operating expenses went up.
                                                        No new business, no increased purchases.

                                                        Consider the type of restaurant -
                                                        Meal price includes rice and ban chan.
                                                        No deserts.
                                                        No alchoholic beverages.

                                                        Small town with no foot traffic to speak of.
                                                        Just off the "main drag" and so mostly out of sight.

                                                        I had to raise prices to cover the loss associated with accepting plastic.

                                                        And to everyone who makes tax assumptions about "cash only" - our initial "cash only" was not a tax dodge, so that statement isn't quite accurate either ;-)

                                          2. re: tubman

                                            right tubman, the 3% cashback or your airmiles or other rewards are being paid by the businesses that take your credit card, not the credit card companies. I refused to take the Discover card because they charged 5% to me.

                                            There were only a couple of times when people did not have another card or cash on them and I took a check instead. It was not worth my while to take Discover as it was presented so few times and one card a month was still 5% of that sales check plus the monthly processing fee of $45.

                                            There was an ATM about 20 steps from my restaurant but of course the customers did not want to be charged $1.50 to take out their cash. We did cash only on early birds but the customers were well aware of this before they sat down.

                                      2. I have no problem with restaurants that are cash only. Some of my favorite places are cash only(Katy's Dumplings, Amanacer Tapatio, Priscillas Soul Food).

                                        It is what it is.

                                        1. i worked as a bartender at several cash-only bars & nightclubs where tabs were not kept, cash transaction immediately for every purchase, no food, etc. i was really fast, could average $12/minute+ for the house pouring, serving, money exchange. if the place had taken cc it would have slowed me way, way down, and we'd have had to raise the prices on every drink probably fifty cents, minimum-- to cover the fees and equipment. at one bar we used the antique, huge brass push button cash registers with the mechanical prices that pop up under glass on the top and the hand operated crank on the side-- WAY faster than aloha or micros! doesn't make sense for many businesses that are high volume/low price to accept ccs, & their customers appreciate the lower prices. i agree that very expensive places should probably accept ccs, but it is the establishment's prerogative in any case, and as long as it's clearly stated on the door, ads, over the phone when ordering/reserving, the establishment certainly has the right to say "cash only."

                                          1. I used to hate cash-only, but I've been noticing a lot more places I frequent have a cash-only policy. These aren't expensive meals (10-15 max pp), so it's not too much of a hassle. I would be annoyed if more expensive restaurants had a cash only policy.
                                            It also depends on location - one of my favorite restaurants in Rabat told me that credit card companies typically charge twice as much for transactions in Africa (they had to pay something like 6%) - the cc companies apparently justified it by arguing that more cc fraud occurs in Africa than in places like Europe or the US

                                            1. I love cash-only places. I feel I'm probably supporting more of a small-time mom-and-pop place. I feel that the prices are probably very reasonable. I feel that all my money goes to them, and none skimmed to the rich credit-card companies. And I feel that they don't keep computer databases on their customers.

                                              1. I have a favorite place that only takes cash. It's a small, family-owned/operated place that we've been going to for 20 years and they're packed every Friday night. People who love their food just plan ahead.

                                                1. One of the most expensive restos in Berlin (and supposedly also one of the 5 best Italian restos in all of Germany) takes only cash. I can't exactly wrap my head around why this is the case, but you know about it, and you bring cash. Lots and lots of cash '-)

                                                  1. There are certain places that I think should still be cash only (fast food chains come to mind) But most restaurants that are nicer, not mom and pop per se, should take CCs.

                                                    There was a time when you knew you were going for a "nice" dinner because the restaurant took Dinner's Club. I was recently surprised to see the person ahead of me in line pay with a CC at a place I had been going for years and had been a cash only. place.

                                                    1 Reply
                                                    1. re: bubblet4me

                                                      after receiving my credit card printout for the year yesterday, I am tempted to take out cash and spend that rather than be tracked with every transaction I do. It feels very Big Brother-ish.

                                                    2. I'm sure there's a valid reason why some smaller restaurants only accept cash (additional surcharges for transactions below $20 for example), but I do take issue with places that don't make this policy clear before you sit down and order food. If you know you have to stop at the ATM before bothering to sit down and order your meal that's fine, just make sure you warn your customers first.

                                                      I experienced this recently, when visiting a boba tea shop. I wasted my time perusing their menu thoroughly before ordering, only to find out that their overpriced tea (we're talking $7-8 for 1 drink) could only be paid for with cash. Of course, there was no sign up illustrating this point. The service in general was so rude at this point I just cancelled my order and walked out. Luckily, the drinks hadn't been started yet.

                                                      1. As long as it's posted clearly (like on the door before I get seated and comfortable), I'm okay w/it. Usually I will look for the logos on the door anyway. I will assume they lose some business though - not a restaurant, but the other day I walked into a nail salon, found out they didn't take c/c, and had to leave.