Here's Why Cashless Restaurants Are the Next Big Thing (Buh-Bye Benjamins, Hello Plastic!)

Here's Why Cashless Restaurants Are the Next Big Thing (Buh-Bye Benjamins, Hello Plastic!)

Your money's no good here (literally).

Dine at enough restaurants and you’ll eventually find yourself caught off-guard at a cash-only eatery, where you’ll plunk down a credit card and have it rejected. But now there’s a different trend that’s slowly taking hold–restaurants going completely cashless.

Dan Delaney, owner of Delaney Chicken, a quick-service spot in the midtown Manhattan gourmet food hall UrbanSpace Vanderbilt, says his business stopped accepting cash two months ago for a growing list of reasons.

The biggest? Only 10 percent of customers were paying with paper money, yet that small contingent was causing most the line’s bottlenecking. Accepting plastic only (along with Apple Pay) has enabled the ordering system to go mobile during the lunch rush since employees can service customers in line, taking their orders and payments on handheld devices, before sending them straight to pick up their food.

“It was kind of like all signs pointed to the fact that it was the right move for our market,” says Delaney. “We lowered our labor costs significantly by getting rid of cash. I don’t have to pay an employee to go to the bank, to make change. I don’t have to worry about the theft of cash. And from a bookkeeping perspective, I don’t have to worry about reconciling cash deposits. It kind of simplified our operations across the board.”

Fish Cheeks, a 52-seat full-service Thai seafood restaurant in New York City’s NoHo neighborhood, opened its doors a year ago as a cash-free restaurant. Like Delaney, co-owner Jennifer Saesue, who runs front-of-the-house operations, has no regrets. “It really is a lot faster and a lot easier at the end of the night. It takes me five minutes versus counting cash, which used to take me like 35 to 45 minutes to reconcile everything,” she says. Though Fish Cheeks’ no-cash policy is communicated via a sign in the restaurant, on the menu, and on its website, Saesue says she was still prepared for some backlash from customers. Turns out there hasn’t been any.

“We have not had one single incident. We get maybe one customer throughout an entire night that wants to pay with cash who might be surprised by it but says ‘Oh, OK, that’s fine.’”

As for what happens if a diner doesn’t have a credit card? “Honestly, we’ve never experienced that,” she says.

For Delaney, the downside of going cashless has been nearly nonexistent as well, and he estimates that maybe one customer a day — out of 600 or 700 — ends up “feeling frustrated.” But, he adds, it helps that his restaurant is located in a food hall with plenty of other vendors — and in a city crammed with thousands of restaurants.

“If we were in rural Alabama and the only general store says, ‘We don’t accept cash anymore,’ I think that’s a more valid thing,” says Delaney, whose next location, slated to open later this year at a mall in Paramus, New Jersey, will also be cashless.

And if you’re not totally sold on the idea, don’t panic yet. By and large, most restaurants will continue to accept greenbacks, at least for another decade or so, according to Aaron Allen, founder and C.E.O. of global restaurant consulting firm Aaron Allen & Associates.

Allen acknowledged that issues like cybersecurity breaches in the news can prompt people to become more cautious about handing over credit cards. However, restaurants in the U.S. do more credit card business than in many parts of the world. “Cards can give restaurants better visibility and better analytics into who the consumer is,” he explained. “It will ebb back and forth a bit, but the arc is towards forms of payment other than cash.”

Saesue says she knows a lot of fellow restaurateurs who want to jump on the no-cash bandwagon but aren’t quite ready to pull the trigger. “They ask a lot of questions and [whether] it is worth it. They all want to do it, but they’re a little afraid of the transition period,” she shared. “I say that for us, we’re happy with it. It’s a success.”

Turns out some patrons are even excited about the idea. “For a lot of people... something about [cashless restaurants] feels futuristic and cool to them,” says Delaney, “so they’re jazzed.”

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