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The No-Ring Fast Food

We have a local chain of fast-casual restaurants here in Lincoln. They are quite good and I hit them up about once a month since I moved to town.

I've noticed that when I buy and pay cash.. it's almost never rung into the register. The employee does a register open, inserts the money, makes my change but there's no receipt. When I pay with credit card I get a receipt. These are casual observations. I may be totally wrong and everything is being rung in- it just doesn't look that way to my untrained eye.

At first I thought it was employees stealing from the owner but it's so pervasive I'm wondering if it's not actually franchisee's doing the no-ring and therefore avoiding sales taxes?

If my suspicions are correct I wonder why this isn't a more widespread practice by small businesses? Top line revenue but reduced expenses? What's the check and balance? Obviously if you report very little income on your taxes but tons of expenses you'll raise some eyebrows but what if it's just a few hundred here/there to keep a little more in the owner's pocket and a little less in the hands of the always-hungry-for-more government?

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  1. We have a deli here in Blue Bell, PA where, every Sunday, the drawer is open all day and nothing is rung up by the owner. Interpretation: if I have to work on Sunday, that's my money. It gets stashed at home. Receipts are handwritten upon request but with a scowl.

    1 Reply
    1. re: Chefpaulo

      The deli where I worked in the 1980s (they are long out of business now, by choice, so I don't think it matters if I say): Really really busy breakfast and lunch. Never stopped. At 11 AM, when breakfast officially ended, we had to close out the register and give everything to the boss. All cash. They made plenty at lunch too so I doubt it looked bad on the books. We did ring it up but the cash register tape went with the money. Hey I could be wrong, who knows. That was just the way it was.

    2. Why then do some restaurants want the tip left in cash only?

      1 Reply
      1. re: PHREDDY

        Because credit card fees can be high (usually paid as a flat amount plus a percentage of the sale), especially for smaller operators.

      2. It's entirely done for the purposes of evading sales tax. It's illegal, which is why more small businesses don't do it. If you feel strongly about it, call your state tax inspector and get them out there.

        5 Replies
        1. re: travelmad478

          "It's entirely done for the purposes of evading sales tax."

          That's a pretty BROAD statement with NO proof to back it up.

          I am not condoning theft of sales tax, BUT the proprietor who doesn't ring up the sale is more likely NOT avoiding just sales tax, an amount less than 10% of the sales, BUT is hiding the entire amount of the sale to avoid tax on the profits.
          Why do this to save 6 cents on the dollar, when you could hide the entire dollar?

          BTW>>>>>>>>>>>>>>>>the proprietor has to record sales and taxes received. He does NOT have to retain cash register tapes in most jusrisdictions. In fact he doesn't have to have a cash register at all (with or without tape) he could use a cash drawer, a cash box, a cigar box or whatever he chooses.

          1. re: bagelman01

            BUT is hiding the entire amount of the sale to avoid tax on the profits.
            Why do this to save 6 cents on the dollar, when you could hide the entire dollar?

            ~~~~

            this.

            i used to live near a very famous pizza place that is cash only. one night the b/f and i were eating at the bar when he overheard one staffer say to another, "damn, the old man is here. now we have to ring in EVERYTHING." b/f had no idea what they were talking about til i explained they obviously stole the house blind when the owner wasn't around. he was shocked, i tell you. shocked, lol.

            however in many cases, not ringing stuff in to cook the books will shoot you in the foot when it comes time to get a loan or sell the business.

            1. re: hotoynoodle

              My father was in the reatil business and bought many stores over the years.
              Anytime an owner/seller, said the books say volume is X, but it actually is X PLUS what we took, my father replied, than you already profited from that, you can't sell waht you can't prove!

              Employee theft is a whole other matter than what the OP seems to be saying.

            2. re: bagelman01

              +1
              i used to work in a restaurant that only had a cash drawer: NO mechanized register whatsoever.
              obviously, the owner didn't take ANY charge cards.
              this was not a franchise operation.
              in the years i worked there i NEVER saw an employee steal a dime from the place despite all the unsolicited dire warnings about employee theft that the owner received.

              1. re: westsidegal

                One of my first jobs was working at a bar/restaurant where the register drawer was never closed. I ask how to use the register several times and was told not to worry about it. It was a very busy place and the staff was paid quite well, all under the table. I don't know of anyone that stole from the owners. Not saying it didn't happen but employees talk and I never heard anyone mention "taking a bit extra."

                At my next serving job, most of the employees stole regularly.

                I am an accountant and had the experience of working on an audit several months back. The state rep told me that tax evasion in the bar and restaurant industry has significantly declined solely due to the increased use of credit/debit cards. (computerized point of sale/inventory systems also helped) Owners simply cannot hide revenue like they could when most sales were cash.

          2. If the restaurant is a franchise, the store owner may also be doing this as a way to deprive the franchisor of licensing fees, which may be based on a percentage of revenue.

            1 Reply
            1. re: masha

              Or possibly trying to avoid rent. Many commercial rental properties charge a lease rate plus take a percentage of sales receipts.

              I work for a property management company...one of our agents did a stakeout on a Subway store that was a tenant of ours. Couldn't figure out why their receipts were always reported so low when the place was always hopping.

            2. I once heard that this is very common at Chinese restaurants and *have* noticed, when picking up takeout at various ones, that the cash sales are not rung up. How widespread the practice is, and whether or not it is more common in Chinese places than other restaurants, I have not the slightest idea.

              1 Reply
              1. re: greygarious

                In our area it is quite common that Chinese takeout places don't ring up the sale on the cash register. They run a tape on the printing calculator which gets stalled to each menu/order. The calculators do have memory capability and can store the day's volume. Generally only a family member takes money from customers.
                Growing up in the era before liberalized immigration there were only traditional full scale Cantonese restaurants. Traditionally they rang 0.00 when handling your bill. Each check then went on a spindle for safekeeping. They had cash registers to fit into American society but really did their math on an abacus and only made use of the till.