With the new year upon us, it’s a great time to assess your business plan and implement any changes that can lead to increased profitability. One change you should give serious consideration to is going cashless in 2019. While it might seem counterintuitive, ditching cash in favor of credit, debit, and other forms of digital payments has numerous benefits, most notably saving you time and money. Let’s take a look at all the reasons going cashless might make sense for your business and the questions you need to ask yourself before making the switch.
Benefits to Going Cashless
1. Improve the Speed of Service
When a customer pays with cash, the customer has to take the time to count out the correct amount of cash and the employee behind the counter has to verify the amount and make change. Even when it goes smoothly, this process takes more time than paying with a card or mobile wallet payment, and too often cash payments do not go smoothly. How many times have you tried to put on a good face for the line of customers waiting while the person at the front of the line counted out pennies so they could pay with exact change?
Accepting only credit and digital payments means faster transactions, less waiting in line, and less frustration for everyone.
2. Save Money
There’s an old saying that cash is king, but it’s 2019 now and in 2019 cash is a pain. Here are all the ways you’ll save money by no longer accepting cash payments:
- Reduce calculation errors when making change
- Reduce labor time spent closing out cash registers, as well as counting, accounting, and depositing cash
- Reduce the risk of employee theft
- Reduce the risk of robbery and burglary
3. Increase Sales
Numerous studies over the last couple of years have shown that customers spend significantly more when they pay with credit rather than cash, typically in the range of 12 – 18%. The same goes for tipping, with customers tipping 13% more when they pay with a card. By simply not offering a cash payment option, you are forcing customers to pay with another method that will encourage them to spend a bit more.
4. Improve Cash Flow
This might sound like an oxymoron, but getting rid of cash actually improves cash flow. Why? Because cash takes longer to count, process, and deposit into your bank account before it’s available for you to use. With credit and debit payments, the money is in your account much quicker and without all the hassle.
Merchants partnered with SpotOn, for example, get next-day funding. Having that money on-hand first thing in the morning each and every business day makes paying vendors and payroll significantly easier, not to mention less stressful.
5. Get Better Data and Analytics From Credit Transactions
Once a dollar bill goes into the till or the safe, it looks no different than any other dollar bill. You can’t tell who spent it or what it was spent on. On the flipside, card and other forms of digital payments give you invaluable data and insights on all of your transactions:
- See which products are selling and which aren’t
- Determine your peak sales hours and days
- See who your best spenders are
On top of that, if you are using a digital marketing and/or loyalty program that is integrated with the checkout process, you also get active tools for collecting customer contact information and a simple way to stay in contact with them to encourage repeat visits.
6. Get Flexible
Accepting cash payments requires that you have a cash drawer or cash register, which ties you down behind a counter. Get rid of cash and you can get rid of the cash register, meaning you can get out from behind the counter to interact with customers and even take payments with a wireless payment terminal like SpotOn Poynt or our Pay-at-the-Table tablets for restaurants.
Questions to Ask Before Going Cashless
Going cashless definitely has its benefits, but the big question you need ask yourself is whether going cashless will scare your customer base away. Results from the most recent TSYS Consumer Payment Study show that 77% of consumers prefer to pay with a card, compared to 12% who prefer to pay with cash. Add to that 77% the growing number of consumers who prefer to pay with a digital wallet like Apple Pay or Android Pay, and the statistics suggest that your business should do great by getting rid of cash.
Having said that, statistics are only statistics. You know your customers best and whether they will be turned off by not being able to pay in cash. In addition, there are a few other factors to consider, so ask yourself these questions when deciding whether to go cashless or not.
- Who are your customers and do they have the ability to pay without cash? If you’re not sure, ask them what they think.
- Do you have cutting-edge payment hardware that allows you to accept chip card and contactless payments?
- How much are you paying on credit rates to your payment processor? If you’re paying a high rate, it will outweigh the cost savings associated with going cashless and you’ll want to make sure to switch to a payment processor with affordable rates before going cashless.
- Are you getting a significant cash discount when purchasing from you vendors? If so, keeping cash on hand might be beneficial.
Keys for Success When Going Cashless
If you decide to indeed go cashless in 2019, make sure to have a good plan in place for doing so. Start by communicating the change to your customers well in advance across as many channels as possible.
- Send out an email blast notifying existing customers about the pending change.
- Create social media campaigns announcing the change across all your social channels (Facebook, Twitter, Instagram, etc.).
- Post physical signage that you will no longer accept cash starting on whichever date you choose.
- Train your staff to notify customers about the new policy during the checkout process.
- Be patient and give yourself a healthy transition period where you’ll still accept cash so that both employees and customers can get accustomed to the change.
Need Help? Going cashless on your own can be daunting, but SpotOn is here to provide you with the products and service you need. On top of our low payment processing rates and cutting-edge payment hardware, we have software solutions to help you boost efficiency and a dedicated Customer Engagement Team which will work with you one-on-one to put a plan in place that makes sense for your business.