Cash will not always be King
Updated: Mar 3, 2020
It happens every day.
A customer searches their wallet for cash, and realising they have none, apologises for needing to pay with card.
I don't get it.
Why are they apologising?
Why does the average person assume a coffee van owner would prefer to take cash? Or maybe I should ask, why does the average coffee van owner prefer cash? I definitely don't.
I guess I'm the odd one out. As everyone knows, "it's better to keep it all in cash so Uncle Sam doesn't get his hands on it". And, as Kerry Packer famously said, "As a government, you're not spending it well enough that I ought to be donating extra".
Let's leave the government tax policy out of it for a moment and just look at the pro's and cons of accepting cash versus card for my small business.
The cons of cash:
I run coffee vans with employees. Every day, I trust my employees to not steal that cash. That trust step is an impossible one for many business owners to take. They trust no one, so therefore they, the owners, are tied to the business to make sure no one steals cash. And apart from their employees, carrying cash around makes you vulnerable to other thiefs, who could walk up to your van or into your shop at any time. I hate walking to a bank to deposit cash. I'm always looking over my shoulder.
Cash is dirty. We don't like to touch strangers when we are on the train. But we are taking cash from their hands to ours all day long. God knows where that money has been. Are sick employees an issue for you? Less handling of cash will mean a cleaner workplace.
Cash costs me money to bank. I either need to lug it to a bank at least once a week, or I need to pay an employee to do that for me. That requires time and money.
Now for the cons of card payments:
I have to pay tax. Big deal. We all pay tax. Society will be better off if we all paid it, and I'm fairly certain, despite what Kerry Packer said, that the government is more likely to do a better job of it if they had enough tax revenue in the first place. If we were all paying it, our rate of tax would almost certainly go down.
I have lost count of the number of times I've been told by someone that I'm an idiot for declaring all my earnings, and then we've moved on to talking about how bad the roads are, the hospitals are full or their local schools are hopeless. Where do they think the government is supposed to get the money to improve those services?
Another con: I have to pay for an EFTPOS terminal. And what if it crashes. Firstly, you should always have an EFTPOS terminal in any business. You will sell more as a result. Secondly, it might crash. Keep a back up? Or if it does on occasion, which has and will happen, give your coffee for free that day and know that your customers will return the next day anyway and fix you up. One of my customers told me the other day that about two years ago, my EFTPOS terminal was down and he was shocked that I just gave him a coffee and told him to pay me whenever he came back. He told me he has been loyal to us ever since, because he was so impressed that I trusted him that day when others wouldn't have.
I can't think of any other cons. Just more pro's. Every time I go for a loan, all my revenue is accounted for. There isn't a whole lot missing because I kept it in cash and didn't declare it. The lenders love that.
If my business was all card, I'd never need to worry about theft. Ever.
The money hits my bank account, faster and easier. I do pay fees for the EFTPOS terminal, but it's a small price to pay for the convenience and all of the other benefits I receive.
For now, I still take cash and card.
That might not be for long. And I hope that is the way we are all headed.