Some Restaurants Aren’t Accepting Cash—Here’s Why They Should

If you’ve noticed an uptick of “no cash” signs in restaurants, cafes, and food trucks, you’re not imagining things. While digital payments are more popular than ever, restaurant operators facing rising minimum wage laws and inflationary costs should not be quick to discount the importance of cash for their business.

Before making that leap, here’s what you need to know about the current situation operators are facing, and the solutions that can fix your business’s cash handling issues without resorting to a fully digital payment system.

The Impact of Rising Minimum Wages

Recent legislation, such as California's AB 1228, which raises the minimum wage for fast-food employees to $20 an hour, is having a significant impact on the industry. To offset these rising labor costs, many restaurants are considering price increases, emphasizing the need for efficient cash management to handle larger volumes of cash transactions.

While California is the only state right now to have this specific law, many states across the country have experienced general minimum wage hikes in 2024.

The Importance of Accepting Cash

Despite the trend towards cashless transactions, accepting cash remains crucial for restaurants. Approximately 6 million unbanked individuals in the U.S. rely on cash for their transactions, highlighting the importance of catering to this customer segment.

The US is also experiencing an increase in cash usage for younger people, as nearly 70% of the Gen Z age group reported using cash more frequently in 2022. Restaurants that refuse to accept cash risk excluding a significant portion of potential customers and limiting their revenue streams.

Why Are Restaurants Going Cashless

Some restaurant operators may choose to not accept cash for a variety of reasons, with the biggest being how time-consuming manual cash handling can be. With employee compensation expectations rising and labor hours becoming more expensive, operators cannot afford to keep employees on the clock for the time it takes to drive to the bank for deposits and withdrawals. There is also a risk factor for restaurant employees handling large amounts of cash. For restaurants to continue to accept cash, they need to address these common issues regarding labor, cost, security, and risk.

It’s a tough situation to be in as a restaurant operator facing rising costs, and even more so for small business owners with limited staff. Luckily, there’s an entire industry dedicated to solving cash handling problems for businesses stuck in a rut.

The Solution Restaurant Operators Are Using

Whether you’re a small business owner or a franchise operator, the ability to accept cash has the potential to be an easy process. Here are the two biggest things operators must do: outsource and automate.

To free up employee time and cut back on labor hours, the first step is to outsource your cash handling needs. From there, you can leave the automation to the pros. For example, SafePoint by Loomis lets you streamline your cash management process by automating cash deposits, withdrawals, and change orders. This not only saves time but also reduces the risk of errors and theft associated with manual cash handling. Additionally, Loomis provides detailed reporting and analytics, giving you better visibility and control over your cash flow.

If you’re wondering how these processes can be automated, it starts with one of Loomis’ Titan smart safes or cash recyclers. Once cash hits the machine, it’s credited to your business’s bank account and funds are accessible overnight. Your account activity and deposit status are easily accessed through the Loomis Direct online portal. From there, the physical cash belongs to Loomis, and depending on your store’s personalized needs, Loomis may make a pickup stop at your location once a week or more.

Still Worried About Rising Costs?

SafePoint is designed to save you time and money. The labor costs and bank fees associated with manual cash handling are eliminated, and your monthly rate at Loomis stays the same throughout the year so there are no surprise charges. So, instead of multiple unknowns, SafePoint offers a reliable service that has a predictable and affordable rate.

If you’re interested in learning more about Loomis and the products and services that make restaurant operators’ lives easier, you can contact an expert here.