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Apr 16, 2014 01:16 PM

cash or credit?

Okay... I canceled all my reservations. We just want to have no schedule and don't mind waiting or being turned away. I feel like I have a great list of places and a lot of knowledge thanks to everyone, but I just don't want to feel like I have to get somewhere by a certain time.

So with that in mind, do most places for sitting and eating (even if it is a very casual place) take credit? I am guessing so. Whereas bars for just drinking, I imagine cash only?

Thanks very much :)

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  1. Most everywhere takes credit/debit, with a few notable exceptions (like Mosca's, Casamento's, and Mandina's).

    2 Replies
      1. re: sufficientlybuttered

        Both take credit and are both great fun.

    1. Places that only accept cash often have an ATM handy but -- as always -- be careful of the fees. Most places aren't bad but I've heard tell of $8 fees on Bourbon.

      What you will want to keep in mind is that although some places, e.g., Buffa's, takes credit the band likes to be tipped in cash, so a few tenners are handy to have at hand.

      1. Bacchanal is cash only, except in the wine store. They have an atm.

        28 Replies
        1. re: Blumie

          yeah it's my main crit. love the food, but c'mon -- get a Square cc reader. fixed 2.75% -- that's $2.75 out of every $100 bucks you make. cost of doing business...why should i pay $3-6 bucks in ATM fees?

          1. re: kibbles

            I am always suspicious that owners are trying to hide revenues from the IRS when they operate on a cash only basis. As you point out, it is easy enough to adjust pricing to cover the merchant fees on the plastic as part of the overhead.

            1. re: Gizmo56

              You say "... hide revenues from the IRS ..." like it's a bad thing. Having spent the last two months trying to hide my revenue from the IRS I can't imagine why.

              Anyhow, it's certainly better for the actual industry people to tip in cash.

              1. re: montuori

                I always do tip in cash, and like yourself I claim every tax deduction and credit to which i am entitled.

                But I don't appreciate the inconvenience of having to pay for restaurant food in cash, simply to enable the proprietors to cheat the rest of us taxpayers by skimming their revenue and keeping it off the books.

                1. re: Gizmo56

                  I'm not sure I'd be so quick to assume all restaurants that operate in cash only are trying to scam the IRS. Maybe they prefer the old-fashioned method of operating debt-free and no credit. Believe me, if they are operating in an unsavory business manner, the IRS will catch up with them sooner or later. I always resent having to pay more in price for the convenience of plastic, but I know that's old-school thinking in these days and times....

                  1. re: Christine

                    I didn't say that I "assume that all" are trying to keep revenue off the books, but instead that I am "always suspicious." I don't pretend to know, and a cash-only policy is not an automatic deal breaker for me.

                    Plastic may add another minor cost, but it is customer-friendly. And if I were the merchant, I'd prefer the automation of plastic payments over having to count and safely handle all my revenue in cash for bank deposits.

                    1. re: Gizmo56

                      Oh sure, I understand what you're saying, most people are ok with paying more for the convenience of plastic. I'm not saying I'm immune to the easiness of credit card usage myself in many situatons, but I certainly don't mind if a place is cash only, because usually my husband and I are prepared for that ahead of time. Having never run a business or owned a restaurant, I can't speak to which is the better method, but i'm sure in these times ithe credit way is easier to manage. But I figure if a place wants to operate on a cash only basis and be successful that way, that is their prerogative, and I am definitely not suspicious about it. I will give you a case in point: one of the many Mexican restaurants in our city gives a 10% discount on purchases if paid in cash; of course, they take credit cards, just don't get the discount. That is great with us because like i said, we are always prepared with cash, but I know we are out of the norm.

                      1. re: Christine

                        Now just why do you suppose they would extend a 10% discount, when the fee for running plastic adds less than 3% to their costs?

                        1. re: Gizmo56

                          I'm not sure...would you tell me what you think the reason is? I can hazard a guess, but since we always pay in cash, we enjoy the discount.

                          1. re: Christine

                            My suspicions about such practices have already been stated.

                            Why a restaurant would accept plastic, but give up an extra 7% of revenue for cash (thereby slashing their profit margin by a much larger percentage), implies that there is some huge mystery benefit of cash, which (as already discussed) is actually more labor-intensive to handle. In a competitive market, that is a huge hit for a restaurant to take for no apparent reason, other than possibly to skim revenue for purposes of tax evasion. They accept plastic, but offer a huge discount to motivate their regulars to bring cash, so the plastic-paying customers won't feel like they are being gouged. Why?

                            If they are working with hand-written tickets rather than POS software, that would be another red flag.

                            It costs something to keep soap and hand towels in restrooms, but I have not seen a restaurant offer discounts to customers who don't use the facilities. I think restaurants should offer routine basic conveniences to be customer-friendly, and I have no problem seeing the minor costs of doing so structured into the prices charged to all.

                            1. re: Gizmo56

                              I'm sure the fact it is a Mexican restaurant makes it doubly suspicious. I am confident if they are implementing this practice for the purpose of tax evasion, the IRS will eventually catch up with them, and then they will discontinue the practice and either pay fines, face jail time, and possibly close. Tax evasion is something you don't want to mess with!

                              1. re: Christine

                                but people do and get away with it all the time -- from cash-based restaurants to wait staff. theres no certainty that the IRS will eventually find you out -- cash is untraceable. thats why its popular and easy for cash-based businesses (and waitstaff) to under-report.

                                1. re: Christine

                                  No, the fact that it is a Mexican restaurant doesn't increase my suspicions one iota, and that comment is uncalled for. The lack of a credible alternate explanation is the main problem.

                                  There is no benefit of offering a cash discount, unless the discount is smaller than the transaction fee for plastic, and even then it will be offset by the inconvenience to the merchant of taking in, and accounting for, large sums of cash every day, having to reconcile the till, worrying about possible theft, etc. If a business person thinks they might come out ahead by giving you a 1 or 2% discount for paying in cash, that's one thing, but taking a 10% hit for cash is quite another.

                                  You have much more faith in the ability of the IRS to detect minor cheating in the underground economy than I do. And for a restaurant, it is less a question of the IRS than it is about the state and local sales and/or restaurant tax obligations they have on each and every ticket. Without a paper trail of credit card transactions through a proper POS system, it is very difficult for authorities to know about and prove the existence of unrecorded business activity.

                                  I'm sure some businesses are cash-only for reasons other than skimming cash off the top, but I haven't heard any such reasons yet in this thread.

                                  1. re: Gizmo56

                                    The Mexican restaurant comment is one heard when I tell others that this particular restaurant gives a discount when paying with cash. I hear all kinds of comments about illegals and whatnot, but I frankly couldn't care less why they choose to implement that policy...we appreciate the discount. Anyway, what I've been trying to get across is that we are not turned off by, or quit patronizing, restaurants that are cash only. We absolutely believe that is every restaurant's business decision. Even if they don't give a discount, we still go there and typically pay with cash. That's how we operate. We have happily and willingly gone to every restaurant named here that operates with cash only, and we have not been dissatisfied with that policy. Here's my reason: I don't believe Bacchanal, Casamento's, Mandina's, and Mosca's are adhering to their policy to skim cash off the top, do you?

                                    1. re: Christine

                                      Of course I am not going to accuse any specific cash business of under-reporting. Maybe the owners just love the smell of cash and the fun of counting out coins and small bills. And I don't want to prolong a semi-off-topic tangent in light of brucec's comment.

                                      But I will suggest that you Google an article entitled Cash Businesses and Tax Evasion that was published in Stanford Law and Policy Review. The paper is thoroughly researched and it details the enormous gap in tax compliance between cash-based businesses and mainstream businesses that do most of their sales in plastic. It also details the rarity of audits, and the almost complete lack of concern cash business owners have about getting caught. There is a huge amount of data out there about this problem.

                                      I am sure that you appreciate the discount and that you have not been dissatisfied with cash-only policies, and that's how you operate. I get all that. Again, cash-only is not a deal-breaker for me, but personally I deduct points from my overall estimation of any establishment if I have to arrive armed with a wallet full of cash. Nobody is arguing that it is anything but the restaurant's decision, although you still haven't offered a credible alternative explanation for why that is ever a sensible business decision for tax-compliant ownership to make.

                                      Maybe one day all restaurants will be cash only, and we will all have to drive around in a Brink's truck when we travel for business or vacations. For me, being able to use debit or credit when I choose is advantageous for me as a customer, and it is advantageous for any honest merchant with whom I am transacting business.

                                      1. re: Gizmo56

                                        Well said! All I can say is that we typically frequent establishments that accept credit cards, as most do, but when confronted with a cash only restaurant, we don't immediately suspect and wonder why they're doing so. And most, as you point out, don't offer a cash discount anyway. I use my credit card frequently when traveling or shopping, just not usually at restaurants. Of course, that personal policy changes with each individual situation. I envision a world someday when we will move beyond outmoded and archaic ways of doing business and there will be no more cash transactions and everything will take place invisibly via electronic transmissions. I sincerely and truly did not mean to ruffle any feathers with my opinion.

                                        1. re: Gizmo56

                                          I worked for an insurance company that wrote policies for bars and restaurants across the country. Once we handled a claim for a place, can't remember where it was, that had business interruption due to some type of loss. To calculate the loss we ask for tax records and the restaurant said that they had two sets of books, one for tax purposes and the other was the real numbers.
                                          The business income coverage they had was based on 90% of sales and they used the real books when getting the coverage through the agent.
                                          We had never seen anyone admit to two sets of books before. We used the books that had the true figures to calculate the loss

                                        2. re: Christine

                                          In the case of Bacchanal I suspect there's a time element involved: it's much faster to process cash than credit (especially the square; which, while handy, takes forever to conclude a transaction).

                                          The other three ... well, there's that pronounced vowel at the end of their names, right? (I kid. To be honest, I suspect some places -- including the three mentioned -- don't take credit simply because they never have and the change in tradition would make their regulars groan.)

                                          As for giving a meaningful cash discount ... maybe it's a better form of marketing than the hideous Groupon or whatever? Plus when you deal often enough with credit you're going to run into issues that are hard to handle: chargebacks and complaints and the rest of it. A few transactions are easy enough but it gets more complicated when there are dozens an hour.

                                          Regardless, I'm all for enjoying untraceable business transactions while they're still allowed.

                                          1. re: montuori

                                            Hear, hear! Thank you very much for your words...I was beginning to think I was fighting a lone battle in favor of dealing in cash, both as a patron and business owner, the former which I am, the latter not. Cash IS just easier, although that is anathema to most. Of course, we are adherents and proponents of the dreaded dave ramsey school of no credit and/or debt. Shocking indeed in these days and times, huh?....and apparently out of touch with reality LOL :-))

                                            1. re: Christine

                                              cash isnt simply easier. as mentioned, there are tills and employees and bank runs and earning reports to worry about, which are all work. using a simple yet powerful (and cheap) POS like Square or the like eliminates those. and provides better business intelligence for me as a merchant.

                                              still not following you on the credit/debit issue -- operating a POS reader incurs no debt. and on the customer side, my cc is a debit card, so again, no debt.

                                            2. re: montuori

                                              actually i must disagree on time w/ regard to Square. in my experience the standard cc experience is not any/much slower than handing a large bill and getting change. but where it is actually *faster* -- the Square "Wallet" functionality. this allows any smartphone users w/ the mobile app to automatically show up in the Square Register app (merchant's side), where it auto-deducts from your saved cc info. no need to even remove your wallet or phone. can still tip on your phone for up to 5-10 minutes afterward (after you sit down!). it's slick, and fast.

                                              1. re: kibbles

                                                Ah. My experience (being a non-phone type) is that the reader rarely works on the first (or second, or third) try and touching someone else's ipad or phone to "sign" is just gross.[*] I don't doubt that all that fancy stuff works great sometimes but never has for me.

                                                On the merchant side, we take it (the square) but because we accept both cash and credit it doesn't make anything any easier; in fact we end up having to manage two income streams.

                                                [*] Yeah, I know the ATM isn't any cleaner but somehow I'm reconciled to that.

                                                1. re: montuori

                                                  funny about the ATM handling!

                                                  the POS systems all allow for cash, so you can still utilize only one system of record. one set of transactions, managed till, etc. plus the added feature of analytics on all transactions -- thats the killer feature. what items sell the most? exactly how many, during which time frames? what items get paired w/ it? etc.. that stuff is awesome, and before now the barrier-to-entry used to be much higher. now you get yourself an ipad or even an ipod touch and youre in the game. amazing!

                                            3. re: Christine

                                              thing is, i dont so much care what their reason for wanting to go cash-only is (tho coming from the restaurant business, i also have my suspicions) -- it's flat-out inconvenient to me, as a customer, to have to take cash out of ATMs (often paying a fee) in order to help make their mystery intention easier.

                                              besides having to take out money in advance or facing pricey ATM fees (dont forget the double-dip between your bank and the ATM operator), there is the limiting factor -- when using cash, i am not free to purchase anything and everything i may wish. i must operate w/i the confines of the precious green bills in my wallet. say im at Adolfo's and spent a couple hundred on dinner and wine, but then friends walk in -- and we want another bottle of wine. er, cant, didnt have enough for drinks, dinner and wine, plus an added $60-bottle of wine.

                                              it limits whim-spending. surely the first bottle of additional whim-spending a month pays any perceived added costs of the cc service...

                                              1. re: kibbles

                                                Never have had to use an ATM out of town, thank goodness. Have just always come prepared with enough "mad money" I guess - haha! The rest goes on cc paid off at the next billing cycle. I applaud and commend you for utilizing a debit card. But some people actually believe they tend to spend more easily with cash like it's running through their fingers. I, like you, believe the cc makes it more easy to spend money. Guess it all boils down to the old adage: Diff'rent strokes for diff'rent folks. This has been a lively and stimulating conversation and I wish all a great weekend and happy Easter!

                              2. re: Christine

                                what does accepting credit cards have to do with operating debt-free? modern systems like Square readers require no up front costs ($0) nor monthly "merchant" bank accounts. just hooks up to a checking account.

                                further, it gives the business own great business intel -- accurate reports on gross, peak earnings, relational purchasing habits, etc... it's smart *and* convenient to customers.

                                1. re: kibbles

                                  Like I said, I've never been a business owner (i'm sure it shows), so I'll have to defer to those of you who have successfully run a business and/or restaurant in the past or are curently doing so now. My comments were not meant to insult, offend, or upset anyone...I was simply stating that we are not avoiding or turned off by restaurants which are cash only.

                                  1. re: Christine

                                    no offense taken (?) at all, just a friendly discussion on why not taking credit cards at non-popup restaurants is really inconvenient to customers and not operating smartly, imo. :)

                    2. seems the moderators've taken a day off----3 replies of 21 have to do w/ the question....the others, not so much

                      25 Replies
                      1. re: brucec

                        Yeah, I wondered that myself even as I've been posting.

                        1. re: brucec

                          heaven forbid we grown adults be left to have a conversation about something relevant to many diners, in particular to local restaurants such as Bacchanal's, Adolfo's, Killer Po-Boys, etc. instead, we should quietly hope our moderator overlords can come put an end to the discussion? something rubs me the wrong way about that. but, hey :)

                          1. re: kibbles

                            Agreed kibbles. This is certainly relevant to New Orleans visitors.

                            To add to the on-topic and relevance here's a tip: the Abbey's ATM (on lower Decatur) dispenses tenners. I find that handy.

                            1. re: montuori

                              The Whitney on Chartres also dispenses tens (and stamps!). I thought I was the only person who cared about such things!

                              1. re: uptownlibrarian

                                I report 100% of our sales and with a pos system and credit cards, it is hard not to. With cash only and no pos, there are so many ways to cheat the system. First off, as roro1831 mention, they can save tons on their insurance premiums, as well as paying their staff in cash and therefore paying less for the workman’s comp and employee federal taxes. And the obvious discount on their sales tax, income tax, liquor license, occupational license, etc. An unscrupulous restauranteur could lower their overhead by 10 or 20% in this manner. I often wonder why the IRS never audits any of these cash only businesses. It seems like the first place to start to crack down on cheaters.

                                1. re: shanefink

                                  These businesses can and do get audited, but at the end of the day there's not a lot at stake. The IRS is much better served dedicating its limited resources to bigger fish, where the rewards can be significantly greater. Not that the IRS wants to let anyone get away with cheating, but if it has to choose between auditing a mom-and-pop restaurant that might be pocketing a few thousand dollars extra, or a larger business where millions of dollars might be at stake, the choice is obvious.

                                  1. re: Blumie

                                    Wanted to let everyone know I checked with hubby and he believes the cash discount the Mexican restaurant in our town is giving is 5%, not 10% as I stated earlier. So for the poster who was concerned and worried that the restaurant might be defrauding on their taxes by offering this discount for customers paying with cash, looks like the margin is not as high, so if they are defrauding, it wouldn't be for that much extra profit. Whew, that's a relief ;-0

                                    1. re: Christine

                                      Christine, if you think that a 5% cash discount rules out the possibility that cash revenues are not being fully reported, you haven't really been following this thread.

                                      1. re: Gizmo56

                                        Since I was one of the prime instigators in this thread, I think I've been following it pretty well. I just wanted to let you know that this place would only be making a 2% profit instead of the whopping 7% you alleged earlier when I inaccurately reported they were giving a 10% cash discount. As I've stated before, i could give a flyin' flip whether they report nothing at all. It's not my business, and I'm not sure why any patron would care if they're screwin' uncle sam unless they work for the irs. I am merely a patron and i can "vote with my feet" when dining out. When a restaurant has been a successful one for half a century or more by operating cash only, they must be doing something right. How they achieve that success is frankly none of my only business is whether i choose to be a customer or not.

                                        1. re: Christine

                                          If they were reporting, it would not be a "2% profit," they would be taking a 2+% loss for taking your cash. And that's a loss on the overall ticket, so the percentage lost on their profit margin after labor, food costs and overhead would be even greater. And if you read shanefink's post and the Stanford study, you'd see there is a huge multiplier effect in how unreported cash business can shave away multiple tax, insurance, and license fee obligations.

                                          "I'm not sure why any patron would care if they're screwin' uncle sam unless they work for the irs." Umm, perhaps because "uncle sam" is you, and me, and every honest taxpayer, and we all end up bearing the costs of the cheaters' unpaid shares.

                                          1. re: Gizmo56

                                            Uncle sam is a federal symbol, and by your own admission, “for a restaurant, it is less a question of the IRS than it is about the state and local sales and/or restaurant tax obligations they have on each and every ticket.” So you actually believe there is such a rampant disregard for tax law among cash-only restaurants and those offering a cash discount that it is increasing taxpayers’ costs on a local and state tax basis? Wow, that is a travesty and one that needs to be investigated by someone in higher authority. I was unaware of this well-concealed problem, obviously one that needs to be exposed. I hope you are not losing too much sleep over these otherwise unknown restaurant scammers, unless you are involved in the collection of state and/or local taxes yourself. If you want to go after "cheaters", I'd say there are much bigger fish than restaurant owners to investigate. Additionally, if you think our hard-earned tax dollars are being utilized and spent wisely, then there’s not much more I can say…although I probably will ;-)

                                            1. re: Christine

                                              I don't lose sleep, and as I stated long ago I don't consider a cash-only policy to be an automatic deal-breaker when dining out. I simply prefer to patronize businesses that accept plastic both for the sake of convenience and because I can be confident that the business owner is not ripping off his or her fellow citizens.

                                              You've gone from expressing skepticism that cash-only businesses engage in tax evasion to saying that you don't "give a flyin' flip" when they do. I'd say my work here is done.

                                              1. re: Gizmo56

                                                You got me there, Giz. Your conscience is much more acute than mine. You win! Wheeee..... But apparently you do believe that restaurants operating on a cash only basis are raising your local, state and federal taxes, all three...but yet with no proof. With the lack of other responses backing up your claim, I'd guess others are neither suspicious, nor concerned, about it one way or the other.

                                                1. re: Christine

                                                  One doesn't need a conscience, plain selfishness will do. If someone cheats your insurance company, your premium will be higher than it would otherwise be. If three people rent a house and one person can't make the rent, the other two have to fork over more than they otherwise would. And if others are not reporting taxable revenue, the amounts collected from the honest taxpayers are higher than they would otherwise be. So we all share an interest in tax compliance.

                                                  Direct proof is found in roro1831's comment about his own experience, and in the Stanford research that I pointed you to, but which you obviously have not taken the time to review. The problem of under-reporting cash-only businesses is not a matter of idle speculation, it is a well-documented fact, and we know that non-compliance costs hundreds of billions of dollars annually.

                                                  I love to visit New Orleans and the state of Louisiana. I welcome the notion that when I spend my tourist dollars there, a reasonable portion of them will go to improve schools and infrastructure, rebuild the wetlands and protect natural resources, care for citizens in need, support the courts and law enforcement, maintain the public parks and museums, etc. And I am less than comfortable knowing that an honest restaurant owner like shanefink is competing against others who illegally lower their cost of business by taking taking home envelopes full of unreported cash. Yes, I do give a "flip" about such things.

                                                  You've gone from being skeptical, to not giving a flyin' flip, to being the skeptic again. The circles are making me dizzy, Christine.

                                                  1. re: Gizmo56

                                                    It wan't all that long ago that many of The Big Houses in New Orleans did not take credit cards at all: they ran on cash or house accounts only. I remember the hold outs saying that the card fees were too high. When the loss of tourist business was high enough they began to change but I remember clearly places that would NOT take Amex because the bite was too high. I don't think any of thee places were cheating anybody but I have no way on knowing. But the resistance to the credit card fees was intense. Of course, up until the mid 1980s, Half the revenue at these places was House Accounts.

                                                    1. re: hazelhurst

                                                      HH- Yes, I think that once upon time the fee a merchant paid to Amex was roughly twice as much as for VISA and MasterCard, since in those days Amex did not charge the cardholder any interest charges and one had to pay in full upon receipt of the statement- so Amex got most of its revenue on the merchant side of the transaction.

                                                      I associate the surrender of the die-hards who objected to the card fees happening at roughly the same time as the rise of the Internet and POS systems, which began to tightly integrate electronic systems into every aspect of the hospitality industry, especially in restaurants. Swiping a card now is much faster and more elegant than in the days when the authorization process used telephone lines.

                                                      There is also a generational aspect...I have a kid recently out of college and another just finishing up, and both of them absolutely detest dealing with cash...and with paper anything. One wonders if eventually we'll have an economy that is all electronic, where paper currency disappears entirely.

                                                      1. re: Gizmo56

                                                        There was great resistance to POS stuff fro customers who don't like ANYTHING new in an old place and I well recall one night in Commander's when Ella Brennan was having a helluva time with their (new) wasn't let her comp our table (my companions were old family friends).

                                                        You are right--harder and harder to get around with cash but I prefer it most of the time. I've seen what thieves do with ID theft.

                                                    2. re: Gizmo56

                                                      “I’m so dizzy, my head is spinnin”….remember that old Tommy Roe song from the 60’s? But that’s me…a dizzy broad! LOL

                                                      Yes, you are right, I am dichotomous…I am both not suspicious, nor care. Guess I am not selfish enough because I am blissfully unaware of how these hidden tax cheats are raising my premiums and other costs of living. As far as insurance goes, I personally know one man who was encouraged by his insurance adjuster to pocket the money the company was paying him for hail damage to his car instead of using it to repair the car!

                                                      I don't see how being cash only implies that they don't pay their taxes. Before the days of widespread credit card usage, all places were cash or check only. I don't think fraud went down when credit card usage went up.

                                                      Another vote for the restaurant's choice -- cash is "legal tender" and no one should be ashamed to use it or, in the case of a business, to ask for it instead of a credit/debit card. Cash is great for those who are worried about identity theft, or privacy for various reasons, or who have found that they budget better by using cash.

                                                      You say you prefer to tip in cash, as do I, but it seems as if this would provide restaurants a perfect opportunity for tip-reporting fraud? After receiving my credit card printout for the year, I am glad I use cash at restaurants rather than be tracked with every transaction I do. It feels very Big Brother-ish.

                                                      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, pebbles, rocks, whatever.

                                                      According to the Zagat 2011 guidebook, there was a 19 percent jump in eateries in New York that shun credit cards. Why is that? Is it because so many want to cheat the tax system and never get caught?

                                                      The Cash Business and Tax Evasion article you referenced written by Stanford University Law Review… I always like to find out who is backing or funding research in any given field. It makes a big difference in credibility.

                                                      You said “I have a kid recently out of college and another just finishing up, and both of them absolutely detest dealing with cash...and with paper anything. One wonders if eventually we'll have an economy that is all electronic, where paper currency disappears entirely.” Isn’t this what I told you I was fervently hoping for? And of course, I would always follow the financial perspective and practices of a young 20-something.

                                                      1. re: Christine


                                                        - it is not fraud to pocket the check from the insurance company, rather than fixing the hail damage on the vehicle; what the insured does with the pay-out on a valid claim is up to them. It is fraud to hit your car with a hammer and pretend that it was damaged by hail in order to pocket a check. When people collect money to which they are not entitled on a fraudulent claim, that raises premiums for the rest of the pool of insured. When business don't pay the actual amount of taxes they owe, that keeps tax rates higher than would otherwise need to be the case for other taxpayers.

                                                        - yes, all businesses were cash only before there were credit cards. The question is why, now that there are credit cards, would a business turn away customers who would bring credit card business? The answer, all too often, is so that they skim unaccounted-for cash and they don't report their true revenue and honor their legal obligations. Google is your friend, there is a mountain of data on this is not a matter of speculation.

                                                        -nobody is saying that anyone should be "ashamed" to use cash, or that a restaurant does not have the choice to reject credit card business.

                                                        -I like to tip in cash because that way I know that my server (whose actual wage may legally be as low as $2.13/hr.) will have immediate access to the tip and can buy groceries on the way home if needed. If I add it to a credit card receipt, I have no clue how quickly those tips will be paid out by the establishment to the server. Of course, the server might not report all the tipped income (we know that many do not), but I am less concerned about possible under-reporting by the hard working wage earning individuals that served my table than I am about under-reporting by the owners that take out the profit.

                                                        -yes, identity theft, big brother, etc., so I am all for the customer's right to use cash. Nobody is disputing that. We don't have "credit card only" restaurants. The only place you can't have the choice is at "cash only." Cash customers can dine anywhere they want to.

                                                        -"Point remains" that is exponentially easier to "cheat the taxman" when you have invisible revenue that is not in your books and bank records. And credit card revenue necessarily always shows up in bank records.

                                                        -The 19 percent jump in NYC a few years ago...YES tax evasion during the restaurant slump after the economy cratered is quite likely a major reason. Why do you think that a growing number chose to "shun" the business from debit and credit cards if it was NOT to make certain that they had revenue that never left a paper trail? Is it because they really like rolling pennies and having fewer customers?

                                                        -The research for the article I mentioned to you (& which you will not read) was not funded by any private entity. The objective research involved collecting data by hundreds of interviews of business owners and tax preparers.

                                                        -I mentioned the generational aspect of consumer spending preferences to indicate one of many reasons why an increasing number of people feel that carrying cash for every transaction is inconvenient, not because I think you should follow the practices of someone in their 20's. I am not criticizing your practices and policies. I am merely pointing out that times change, and most restaurants who are interested in making all of their patrons feel welcome in the 21st Century, accept debit and credit cards. Those that choose to "shun" revenue that comes via plastic often do so because of ulterior motives. Simple truth.

                                                        -"I am both not suspicious, nor care." Perfect summation. I agree that you don't care, so there is the meeting of the minds. This has been my last post on this thread. Bon appetit, dichotomous Christine, my friend.

                                                        1. re: Gizmo56

                                                          Giz, since we have been the only two posters debating this topic hot and heavy, I’d say I agree with you that it’s high time this thread ended due to lack of interest. However, due to my propensity to have the last word and because I can’t leave well enough alone, I was compelled to post again. I’m sorry…I can’t help myself 

                                                          Here’s what I understand from what you’ve posted: you want to have the freedom to dine anywhere like cash customers do, and feel discriminated against at a cash-only restaurant, and truly believe the reason it is cash-only is because the restaurant owners have ulterior motives to cheat on their taxes. However, you wouldn’t accuse any individual restaurant owners of this fraudulent practice. I’m sure the New Orleans restaurants (and elsewhere) that are cash only are relieved you are not accusatory, only suspicious. I still wonder why cash-only restaurants that have been in business for multiple decades have not been audited, since it raises so many red flags, and been put out of business. I guess I’m naïve why that’s so.

                                                          Did you see today’s AP article entitled IRS Workers Who Owe Taxes Get Bonuses? When I read something like that, it’s difficult to feel empathy and/or sympathy toward this agency, or any other tax collection agency. I know, I know…under-the-table and off-the-books cheating by restaurants that operate on a cash-only basis is driving up costs for every other honest taxpayer and restaurateur. I will just have to acquiesce to your knowledge on the subject and say you are right, I dig, you win. But I’ll continue to patronize cash-only establishments (when that rarity occurs) with nary a thought nor twinge of conscience, even though you say it’s not a matter of conscience. I don’t shop at Wal-Mart, either, but that’s for another time and topic.

                                                          You say I didn’t read the Stanford article. You’re right, I didn’t, but I did Google it since you didn’t provide a link. There’s no way anyone would read that voluminous academic study that I found unless they were involved in the research, were directly involved in tax collection, employed in the restaurant business, or obsessed about tax evasion. I guess I want the Cliffs Notes version.

                                                          I also Googled this rampant and widespread tax problem of cash-only restaurants by entering various phrases: why do restaurants do cash only, tax problems with cash only restaurants, tax evasion by restaurants, et al, and I never came up with anything substantive on the topic. If it’s so well-documented, why don’t we hear more about it and why isn’t it common knowledge and just accepted as a matter of fact? Maybe I just don’t know where to look, except the Stanford article you cited as a reference.

                                                          You’re saying it’s OK somehow if servers underreport their tips to their tax advantage, but other evasion is wrong. Guess what? I don’t mind if servers underreport, either. I’m very aware of how much they make per hour. Believe it or not, I worked as a server one summer back in the mid-80’s. Hard work, not a lot of recognition or reward IMO. My hat is off to each and every competent server in the country, and they have my complete respect and admiration, plus 20+% tips in cash.
                                                          OK, you are right about it not being fraud when it comes to the car insurance situation I mentioned, but it is sort of dishonest. Guess it’s all right to be dishonest as long as it’s not hurting anyone else. For sure, the person’s insurance rate likely will increase, and quoting from an insurance site: we strongly recommend that in all cases you use your auto or home insurance payout to make the repairs that the money was intended for.

                                                          Life is not fair, we are all full of contradictions and opinions (and you know what they say about opinions). I admit I have kind of gotten off on our exchange here, but now I say “adios, au revoir, auf wiedersehen”…or as I thought they were singing at the end of the Lawrence Welk show when I was a kid…I’ll be the same! 

                                                          1. re: Christine

                                                            as roro mentioned they keep two sets of books. an audit of a cash business doesnt automatically flush out any wrong-doing if the "tax-man" set of books is prepared well. thats the this way one can cheat the system.

                                                            popularist opinions about the IRS are irrelevant -- it doesnt matter who they are. taxes are taxes, and if a restaurant cheats on taxes its stealing from our fellow americans and community, not some IRS boogeyman.

                                                            and no, it is absolutely not dishonest to not repair a car w/ a valid insurance claim payout. the policy is insurance against damaged value of the item...when that condition is met (truthfully) the policy pays out. what you do with it is your discretion and no one refutes this.

                                                              1. re: Gizmo56

                                                                OK, I thought this debate had ended, but I sadly can’t stand not having the last word and continue to be a fly in the ointment. Like others, I can't help myself. I still say that it is wrong to assume or suspect that every cash restaurant and/or business is cheating on its taxes. Are there any actual legitimate statistics to be found somewhere, other than a study conducted by Stanford in California, consisting of interviews with business/restaurant owners and tax preparers? Were the business owners who were interviewed the ones who do cash only transactions? I’m still not sure whether it’s federal, state, or local tax collection that’s getting the shaft, or maybe it’s all three? And why is it all right for servers to fudge on their tip reporting, but not others? Either it’s absolutely wrong in all circumstances, or not at all; you can’t cherry pick the situation and say it’s all right to give a pass here, but not there. I did find articles about underreporting tips being a problem with the IRS. Servers really don’t have any skin in the game (a dollar investment) on whether a restaurant succeeds or fails, unless they have an ownership interest. They're not left holding the bag if the business fails. It seems to me it’s more of a case where people feel inconvenienced at a cash only establishment and as a result, immediately suspect that establishment of ulterior wrongdoing. The majority of restaurants are not cash only, so I’m skeptical that it is as huge a problem as you maintain. I would report them to the tax authorities if I truly felt they were lying and cheating. I quote Blumie here: “These businesses can and do get audited, but at the end of the day there's not a lot at stake. The IRS is much better served dedicating its limited resources to bigger fish, where the rewards can be significantly greater. Not that the IRS wants to let anyone get away with cheating, but if it has to choose between auditing a mom-and-pop restaurant that might be pocketing a few thousand dollars extra, or a larger business where millions of dollars might be at stake, the choice is obvious.” I agree, there are much bigger fish to fry in huge corporations regularly cheating on taxes annually, called corporate welfare. I truly don’t believe there are hundreds of billions lost in revenue from cash-only restaurants each year, just for the simple fact there are so few of them.

                                                                Please answer this question if you would: if this is such a rampant problem plaguing our tax collection agencies and costing the US hundreds of billions of dollars in lost revenue each year, why oh why isn’t this a major news story in the media? It seems as if it would be ripe fodder for the major news outlets, all the way from Fox to NPR. I haven’t heard or read a thing about this issue anywhere on national media reports. It seems like everyone should know about it as common knowledge.

                                                                And yes, I would say an agency (IRS) who rewards its own employees with huge bonuses when said employees don’t even pay their own taxes IS a bogeyman, unfortunately a real one.

                                                                As far as the car insurance question goes, no it might not be “fraud” to take the money and use it elsewhere, but at best it’s disingenuous and I guarantee it will raise rates and premiums. Actuarial pools are designed to take account of these kinds of payouts, I’m pretty sure, no?

                                                                I’m going to have to quiz my masseuse who works out of her home. She’s licensed and obeys all the rules, but doesn’t take credit cards. Her clients pay in cash or check. I would never in a million years suspect her of “cheating on her taxes” because if she did, it would make all the other massage therapists in town raise their rates and it would trickle down to other customers who go to businesses that accept credit cards. I’m starting to see the problem now.

                                                                To finish on a bar/restaurant note, I just found this about an alehouse/restaurant that opened in St. Louis. Wonder If they’re up to no good on tax reporting and out to bilk Uncle Sam and in turn, me and you? I sincerely hope not.
                                                                TUESDAY - FRIDAY 4 to 10 pm
                                                                SATURDAY 12 to 10 pm
                                                                SUNDAY 12 to 6 PM (BBQ food menu)

                                                                CASH ONLY. NO PHONE NUMBER. Unfortunately, we are unable to handle groups over 15 and ANY BUS or Limo. It's a pub not the Oscars.

                                                                We have also deemed ourselves ill-equipped to handle mean people and short tempered pricks. We are however great at handling kind, good hearted people who appreciate good beer and the fellowship of humans.

                                                                We'll pour you a sample of any beer we have. We'll treat you well and hopefully you'll come back.
                                                                The Civil Life Brewing Co. 3714 Holt Ave. St. Louis, Mo 63116 Planet Earth


                                                                1. re: Christine

                                                                  I thought the "debate" had ended too, but this TRULY will be my last try to clarify for you.

                                                                  Tax evasion through non-reporting of revenues by all-cash enterprises is (again) a well-documented problem as part of the larger "underground economy." If you search on terms like "tax evasion," "tax gap," and "underground economy," you will turn up pages and pages of links to press articles, government documents, and academic studies, which will include information about the utility for tax evasion purposes of all-cash transactions. If, unlike the Stanford research, you decide to actually read any of them, you'll read all about the fact that cash business owners often skim revenues to evade paying taxes.

                                                                  You can start with a "Cliff Notes" profile of tax evasion here:

                                                                  The Stanford study is especially important because it compiles information culled from hundreds of interviews of cash business owners who describe their own tax evasion techniques, as well as interviews with their tax preparers. It tells us a lot about the methodology and psychology of this problem. It also describes the potential pitfalls and eventual vulnerabilities experienced by the cheaters. The answers to your questions about the study are contained in the study; I'm not going to waste more time answering basic questions about the methodologies in a study that you can read for yourself.

                                                                  "Corporate welfare" refers to legal advantages legislated into the tax code that allows corporations tax subsidies and exemptions. That is not "cheating," it is simply the result of the dreadfully disproportionate influence of large corporations in the American political system. It is not illegal tax evasion, it is legal tax avoidance. Tax avoidance is not tax evasion.

                                                                  I never said that I assume "all" cash-only restaurants are not reporting all their revenue. I "assume" some do comply. But not knowing which is which, I have to wonder why any restaurant in 2014 would choose to lose the revenue that comes from credit card acceptance, unless they want only cash transactions that won't appear on any books. Hence my suspicion. You still have never made a credible explanation as to why else a restaurant would want to handle mountains of cash, day in and day out. Cash is so much more labor intensive and subject to errors and security risks when compared to electronic payment processing.

                                                                  I don't think it is right for any individual not to report income. My point about the servers was that I think it is less important in the grand scheme of things that a hard-working server at Denny's might under-report his or her meager tip income to the Feds at tax time, than it is for business owners to be hiding their true gross receipts from local, state, and federal tax agencies.

                                                                  I do see regular mention in the media of the "tax gap," especially during tax season. I'm sorry you have missed the issue entirely.

                                                                  There is nothing "disingenuous" about a person taking a check on auto insurance claim and putting it to another use. The higher the resale value of the car, the more likely the insured are to perform the repair and preserve full market value of the asset, the lower the resale vale, the more likely they are to shrug off a minor dent, and keep the check. I don't know why you are hung up on this point, or how it is supposed to relate to tax evasion by skimming cash revenues.

                                                                  The fact that your massage therapist takes checks is a good sign that she does route at least part of her revenue through the banks, which is a sign of compliance. Personally, as I have said before, taking credit and debit cards creates convenience for the merchant as well as the customer, as a home-based one person business, she may not be aware of how easy it really is to process credit card payments these days. I can't follow your argument that if she is underpaying taxes, others would raise their rates (?). Likewise I don't follow your point about The Civil Life Brewing Company.

                                                                  "It seems to me it’s more of a case where people feel inconvenienced at a cash only establishment and as a result, immediately suspect that establishment of ulterior wrongdoing." Read the Wiki article, follow links in the footnotes there, use a search engine, and take a little time to read the especially interesting research out of Stanford. You can choose to believe that all cash only restaurants record and report every penny of their revenue for tax purposes, but all of the data says otherwise. If, on the other hand, you have any research that states that the all-cash sector of the underground economy is a myth, please do share it on the thread.

                                                                  Cheers and farewell.

                                                                  1. re: Gizmo56

                                                                    Folks, this tangent was always a little far afield for the New Orleans board and it went really off the rails in the last day or so. We've removed a bunch of responses and would ask that people let this go.

                                                                    Some of them were fairly lengthy, though, so if anyone would like copies of their personal posts back for future reference, please email us at and we can forward them to you.

                          2. For all of you conspiracy theorists out there ...

                            Bacchanal now accepts credit cards. They always accepted them in the wine store, but did not in the kitchen or at the upstairs bar. According to their facebook page, they now accept credit cards in all three!