Money is dirty, literally. Cash and coins are full of germs from the high number of people that handle and exchange them. The coronavirus (COVID-19) pandemic has only heightened consumers’ fear of trading germs and viruses via tender.
Beyond improved sanitation, cashless transactions offer additional benefits to your business. However, there is one consideration to keep in mind before making the switch to ensure a smooth transition and prevent alienating certain groups of customers. Check out the full list of benefits below along with our recommendation for implementing a cash-free environment.
1. Improved sanitation
Cash has been known for carrying unwanted bacteria and viruses in our pockets, wallets and purses. Specifically, studies have shown 90% of U.S. paper bills carry bacterial colonization, mainly from Staph aureus, Salmonella and E. coli. This stat is staggering for any industry but especially threatening for those in food, beverage and hospitality.
Cleanliness equates to health and safety in these industries with close person-to-person contact and interaction with food and drinks. Cashless can help prevent the transfer of bacteria and viruses between staff and customers by keeping cash in wallets. Customers can use a dedicated, customer display like the Clover Mini to pay via credit card, debit card or mobile wallet. Mobile ordering and payments offer another great option to avoid the exchange of dollars and coins.
2. Reduced labor and services costs
Venues that transition to cashless payments can scale back their cash management workloads and cut many procedures altogether. Some of these tasks that can be lowered or eliminated include:
- Cash room maintenance
- End-of-day reconciliation
- Cash availability throughout a venue during an event
- Cash storage and transportation
Employees will save time typically spent managing and transporting cash. You’ll pay for fewer services to transfer the money from your business to the bank and fewer fees to deposit the cash and coins once it arrives. As a result, your operations can run more efficiently and benefit from significant cost savings in labor and services. For a more in-depth read on the costs of cash, see this post.
3. Decreased shrinkage
Your venue is better protected from theft and error when minimizing cash use. With credit and other digital payment methods, every transaction is recorded and funds go directly to your bank.
Employee theft can substantially impact your finances. In a 2018 study by the National Retail Foundation, it was found that the average dollar loss per dishonest employee was $1,203.16 a year. By taking in less cash, you reduce the amount of money handled by your employees. Additionally, you can save time and confusion from clerical errors in end-of-day reconciliation and other cash-handling duties.
4. Increased revenue
Consumers spend more when they have access to their entire account funds, rather than what is limited to their pockets. Studies have also proven that people tend to spend more as the numbers on a screen feel less “real” than physical cash in their hands.
The accessibility and intangibility of digital spending can add up to a substantial increase in the amount and number of transactions. A study of mobile wallets by the University of Illinois found users:
- Make purchases at a rate 23% higher than those who pay with physical cash or card
- Spend 2.4% more per transaction
By encouraging cashless transactions, you will see larger and more frequent purchases at your registers. Contactless payments are also quicker allowing you to process a greater volume of transactions. Quicker lines mean more happy customers, who are ready to make repeat purchases and drive more business for you.
An important consideration with cashless
Going cashless seems like a straightforward opportunity to offer a better experience for guests, improve operational efficiency and increase profitability. However, before you switch your venue to only accept cashless payments, you should consider ways to remain accessible to consumers who are unbanked, underbanked or simply prefer cash.
Add cash-to-card kiosks
Some cities and states are prohibiting businesses from running 100% cashless to prevent disenfranchising those without credit and debit cards such as the young, elderly and poor. One way to address this is through the use of cash-to-card kiosks. Visitors can trade in their cash for stored value cards that can then be used anywhere their respective card types are accepted (e.g. MasterCard, VISA).
CenturyLink Field, home to the Seattle Seahawks and Sounders, is an example of a Bypass client that has successfully switched to a completely cashless venue without alienating cash-paying customers. They added cash-to-card kiosks around the venue to ensure every fan could make purchases during the events.
Accept cash at a few terminals
You know your customers best. Maybe switching to a cashless environment will end in significant backlash. In this case, consider a more gradual approach and encourage guests to choose cashless payment options.
You can give your customers time to realize and embrace this change by continuing to accept cash at a few terminals. Barclays Center, home to the Nets and NY Islanders, is a Bypass customer that has taken this route of going mainly cashless but still accepting cash at certain terminals.
Encourage adoption of cashless payment methods by creating dedicated lines and indicating such through signage. Customers will see for themselves that these lines move faster and naturally be more inclined to choose the cashless lines.
Whether you fully transition to cashless or start moving customers towards it, you’ll see a multitude of benefits. Your customers will feel safer and enjoy quicker lines. Your staff will spend less time managing cash. And your P&L will be in better shape overall. Keep options open for those unbanked and underbanked, and you can evolve your commerce landscape in a way that works for all of your customers, staff and business in general.
Learn about other COVID-19, point-of-sale solutions in our Resource Center.