Wednesday, September 29, 2010

Dueling Bloggers: Cash Only Restaurants

There has been a heated debate going on at Blackened Out Media headquarters over the issue of restaurants that only accept cash. We decided to tackle the issue Hannity & Colmes style with a point/counterpoint format. (Above, an explanation of the cash only policy at La Pupuseria Macarena.)

Rene: If any menu item on your menu is over $8, you have no business being a cash only restaurant. Now listen, many restaurants and food purveyors will tell you they are cash only to keep their prices down. The theory is if they don't have to pay the credit card companies 3-5% a month for the right to take credit cards, they can pass the savings on to you. But when was the last time you walked into a cash only restaurant and said, "Hey this po-boy shop's prices are 3-5% lower than the one that is cash only." If you are a snowball stand, bakery, or coffee shop, I'm fine with you being cash only. Otherwise, the 21st century is paging you, please take cards.

Peter: You are beginning to sound like the Dean. Case in point, this quote from his restaurant review of Ciro's Cote Sud on July 7, 2010: "The cash-or-check payment policy is an absurd inconvenience to enforce upon customers, and causes one to order less food and wine than one otherwise might. (How much cash is in your pocket right now?)" Saving that 3-5% may not be manifested in lower prices on the menu, but it is certainly recognized as a value to the customer in some other manner. How do you know? Because if Restaurant A consistently charged 3-5% more for the same exact food as Restaurant B next door, all other things being equal, which would you go to and which would be closed down in a matter of months? Let consumer preference determine if cash only is a make or break point of contention for diners. Last time I checked, Mandina's and Casamento's were not hurting for customers.

Rene: The use of debit cards and credit cards as a cash substitute has roughly skyrocketed since last time I checked. I don't carry cash. Mostly it is because it makes your hands smell like a trailer park in Piscataway. But also, when does anyone give me cash? Paychecks are directly deposited and bill payments automatically scheduled, making the necessity of going to a bank or writing a check obsolete as the rhythm method of birth control. You can buy gas without even have to interact with a human being. The only drugs I buy are purchased with a Health Savings Account card. Our currency system is more plastic than a bored housewife on Bravo. I use cash primarily for two purposes: cab rides home and purchasing a Sunday newspaper. Suspicion says many of you are the same way. There is only one reason why restaurants don't take cards and it is to avoid or hide revenue from the Internal Revenue Service.

Peter: Since when did carrying cash become an inconvenience? I will wager (in cash, of course) that every full service, cash-only restaurant in the city also has an ATM on premises. Your next argument might be, "Well, some people carry only a credit card and not a debit card." As the son of a man who has spent his entire career collecting overdue debt for credit card companies, I can tell you one thing: If you don't have a checking account, then you sure don't need a credit card either. Remember not too long ago when the Dow dropped below 7000? A lot of that had to do with banks lending money to people for houses that they could not afford. Same goes for people trying to use credit cards for their Chicken a la Grande at Mosca's.

Rene: Here though is what really irks me. Last week Peter and I went to Tracey's, the new old Parasol's. They accept cash only because of the "fees". Their prices are right on the borderline of this being acceptable. I was directed towards an ATM in the corner. Where guess what, it charged me $2.50 fee to withdraw money. Add that to my bank's $2 non-bank ATM fee, and you are looking at almost $5 in fees to purchase an $8 po-boy. Just so we are clear, Tracey's (and other places) don't want to pay the credit card companies a fee, but they are perfectly fine with me having to pay the fee. What makes this even more sickening, is that the restaurant often gets a fee from the operator of the ATM for allowing it to be in his restaurant. Talk about not having cake but getting to eat it anyway. Or something like that.

Peter: You know what really aggravates me? When service slows down because my waiter has to run 4 different credit cards for one check, and I am talking about other tables as well as my own table. Nothing is worse than when the bill hits the table and four different people pull out credit cards to pay; the facial expression on the server tells it all. I think that "no separate checks" should be added under the Louisiana Revised Statutes. The problem is even worse when you talk about restaurants where you order at the counter.

Rene: Here is the real kicker. So I am standing in front of the ATM at Tracey's, waiting, waiting, typing, waiting, agreeing to a loan shark style fee, and waiting some more. After five minutes of "Processing ", the machine tells me it is "Unable to Complete the Transaction at this Time". Luckily, Peter carries cash and bought me lunch. Unluckily, the machine forgot to tell my bank that it had no money to give me, so my account was charged $24.50 and received $0 of that. The negotiations with the bank for the refund of that amount have gone less than successful. And that is why we got this rant. Conclusion: if you are a restaurant that refuses to take cards and has an on site ATM that charges a fee, you sir are a hypocrite. Lose the fee at the ATM and I will wholeheartedly agree with your stance. But you charge me a fee to play by your rules, I won't stand for it. Consider this the rallying cry of the A.Tea M. Party.

Peter: Look, I'm not hear to argue about the fees charged either by ATMs themselves or by banks to use ATMs. I am simply a voice for the group of people who carry cash, don't mind paying in cash, and feel that we deserve some kind of break from the 3-5% fee that we are not responsible for. So here is my solution. On occasion I find myself driving from Atlanta to the Blue Ridge mountains to visit my aunt and uncle in their summer home in Cashiers, North Carolina. Upon entering South Carolina, I immediately start noticing that gas station billboards have two prices posted for the same grade of unleaded: one price for cash customers and one price for credit/debit customers. The sign might read: "$2.41-Cash and $2.45-Credit/Debit." I think that this is ingenious and can only dream that restaurants will employ the same price structure so that everyone pays for exactly what costs they are incurring. But it will never happen, because the same people who complain about a restaurant only accepting cash will be the same people who complain about a discount for cash customers.

So what say you about cash only restaurants? We want to hear your opinions in the comments.

And to make sure that you are not caught with an empty money clip the next time the check hits the table, here is a list of New Orleans restaurants that only accept cash. Unless noted, their ATMs charge a fee. Did we forget one? Let us know in the comments:

Adolfo's, Bacchanal, Barcelona Tapas (no ATM fee), Bennachin, Cafe du Monde, Casamento's, Ciro's Cote Sud, Creole Creamery, Tracey's, La Pupuseria Macarena, Liuzza's on Bienville, Mandina's, Mosca's, Riccobono's Panola Street Cafe, Surrey's, Taqueria D.F., Willie Mae's Scotch House and Ye Olde College Inn (ATM fee taken off check). .

41 comments:

Anonymous said...

You guys forgot the ATM at Rick's Cabaret. They charge a high fee and the buffet isn't even that good. Nice ambiance though.

docsconz said...

Great post! I am entirely with Rene on this. I'll only go to a cash only restaurant if the food or place is really extraordinary. Willie Mae's is an example of this. I always spend more when using a credit card.

Ryan Waldron said...

I agree with Rene. I NEVER have cash on my person. It is much harder to track and analyze my spending with cash, and thus it just ends up feeling like free money. When I charge something there is a record of exactly how much I spent. This urges me not to overspend, otherwise I would have a repeating reminder of my foolishness every time I check my bank webpage.

Galatoire's accepts major credit cards. it is time for everyone else to. (C'mon Mandina's you're really my last hold out.)

Rene said...

Shoot, the Old Green Lady was almost a first adopter. Of course when the IRS shows up and finds two cigar boxes, one with cash, one with chits and says, "This aint gonna fly" not hard to bow to convenience.

$1.25 said...

Nice work fellas.

Johnny's Po-Boy's is cash only with a fee charging ATM in house. Huevos used to be, but they've since wised up.

I stopped carrying cash sometime in college before the turn of the century (I was wearing an onion on my belt, as was the style at the time) when I got a professional services job. Everywhere around me took cards, which prevented having to travel across campus to the ATM.

I think being cash only hinders spur of the moment visits. Unless I'm really jonesing for a place, the extra trip to my ATM on the way could very well have me decide to go somewhere else, but I'm quirky like that.

Melanie said...

Cafe Maspero in the FQ takes cash only, too.

I never carry cash. I need time to make preparations before dining at one of these places.

Frolic said...

Are you sure Casamento's doesn't take plastic? I could swear they added machines last year.

Willie Mae's now takes credit cards, at least that what it says in the TP ad.

Domilise's added credit card machines.

The tide is turning against cash only places.

Rene said...

Team Rene has a noble battle against the forces of Team Peter and the Tax Evaders.

Frolic, know Casamento's has always had that ATM in the corner. Casamento's doesnt bother me because between house and there is my bank. Its really the surprising cash only spots.

Wang said...

(Part 2 of 2)

If corkage is acceptable, cash-only should be too. Seems like pretty much the same thing to me. If the average restaurant's margin is ~5% (and I'm taking your word on that, I have no idea) then it strikes me as borderline unreasonable to ask an establishment to bear the brunt of a ~3-4% (~60-80% of their net profit!) charge from the credit card companies for the sake of customers' convenience. Especially since Rene's right that the percentage of the establishment's customers who prefer to use a card will only continue to increase. And I'd guess that it's probably well over 50% now.

On the issue of whether or not the establishments do/should "pass the savings on to the customer"... meh. On a $10 bill, you're talking about $0.30-$0.50, is that really that big a deal? Seems to me that it's all but completely insignificant. Doesn't make a whole lot of sense to me that someone would quibble over <$1 on the bill while paying up to $4.50 in fees to get some cash from the on-premises ATM.

In the end, I think Peter's solution is best. Restaurants should accept the plastic, and add a surcharge to the bill for customers who use plastic. People don't seem to mind the mandatory 18% gratuity on tables of N or more. And even if the plastic surcharge were 10%, the bill would have to be some $40 before you reach break-even vs. using the on-site ATM. And you get the convenience of using plastic. Seems like everybody wins that way. Especially since, ultimately, accepting plastic is a convenience vs. cash for the merchant too.

Maybe it would be less objectionable if they called it a "cardage fee?"

Slug said...

I'm fairly sure Guy's PoBoys only takes cash, too.

Frolic said...

Slug: You're right. I was two dollars short for an order recently at Guy's.

PickDat said...

I pledge my allegiance to Team Peter.

To me, it appears that we are discussing two separate but related issues. (1) Is it OK and acceptable for restaurants to be "cash only"? And (2) Is it OK and acceptable for individuals not to carry cash?

I agree that restaurants claiming to pass the 3-4% savings onto customers is hogwash, as all it does is decrease their cost and increase their profit. So, as long as being "cash only" does not decrease their sales by 3-4%, it makes sense to not accept cards. Rene, of those 20 or so "cash only" restaurants, are there any that you refuse to go to because of the policy? I assume no. I am not pro cash only, but I don't mind it.

Further, what kind of sick individuals don't carry cash? I admit, I'm in the minority because like Randy Moss, I'm "straight cash homey" (YouTube it). I use debit/credit for maybe 5% of my purchase. Flying in the face of Ryan's logic, after a great night out, all I wake up with is a hangover and a fond memory. You wake up with a hangover, fond memory, and a bill you have to pay at the end of the month. I also have a fundamental problem with never exchanging "money". Rene, you work, get direct deposit, pay bills via credit card and transfer funds online to pay the credit card. All your "money" is binary code. There is never a true exchange of currency. Finally, I have a buddy that when he goes out, his wife is at home with her web browser locked onto the bank account. Continuously refreshing, it's her way of keeping tabs on her husband. As the nights and sketchiness of the bars progress, she follows the journey via online debit card transactions and will text him to tighten the leash. I prefer to go off the grid.

As the saying goes, cash is kind.

Vasu said...

Team Rene.

Peter hates it when people split checks on credit cards. Well I hate it when I have to wait for someone to get change for a $20 before we can even get to the paying part of the process. That takes just as long if not longer.

Becky said...

A few cash only bars: the Chart Room, Henry's, Homedale Inn (what, they have excellent snack mix), Tiki's...All of those have ATMs though. Protip: the fee smarts less the drunker you get.

I'm with Rene on this. Cash only is fine at La Boulangerie, and I do feel like a schmuck making a coffee shop run a card for $2.09, but there's no excuse for anywhere that doesn't have a major bank within 50 feet of the door to be cash only. I get that the credit card companies are blackhearted greed machines, but it's the price of doing business. 90% of restaurants do just fine with taking cards.

PickDat said...

*"cash is king"

Sorry, it's difficult to type with all these paper cuts on my fingers I get from counting my paper currency.

Vasu said...

In many cases I'd even be fine if the 3-4% credit card company fee is passed on to me. It'd be considerably cheaper than the ATM fee and paying 30 cents extra for a $8 poboy just so I can use my card would be fine by me. A 30 cent dont-have-to-deal-with-a-frickin-atm fee is just fine.

Rene said...

Vasu, I think that is a very good point of view. No math major but thirty cents is less than $5.

Christina said...

Riccobono's Panola Street Cafe is now accepting cards...

Leigh C. said...

Tacqueria Corona is cash-only, their explanation being that they weren't given any loans or any help from banks to start the place, so they demand cash from their patrons so's the banks aren't dealt with indirectly. But we never found the food over there to be sooo good that we don't mind paying cash and nothin' else. If we do like places that are cash-only, we have to plan before hand to go so that we have the cash and we don't have to deal with the gouging in-house ATMs will give us.

I'm with Rene, really. Cash is kind of a hassle - but then again, it always has been.

Ryan Waldron said...

The T.C. on Severn and the one in River Ridge each take cards.

Keith Clendaniel said...

I am going to have to side with Team Renee here. I think the fundamental issue is the "cost" excuse is over-used. Times they are a changin' and businesses need to get with the program or be left behind. I don't carry much cash so I have been known to go elsewhere when there not an ATM from my bank close by because I do not want to pay a fee.

I think Renee is on to something with the IRS angle. As can be seen by the recent issues with the payouts from BP under the table operations will bite you in the end. The discussion surrounds the savings of 3-4% in transaction fees but it goes beyond that. If the establishment accepts only cash it is easier for them to have shoddy record keeping, pay for employees under the table and under report to both the IRS AND the state/parish. Do you really think that they are going to pass the sales tax collected on to the city/parish for those checks that they are not reporting as income to the IRS? I think not.

Now I am not saying that all of these cash only establishments are tax evaders but as you can see the "savings" quickly rise when you add in collection of sales and income tax you are not paying because you "forgot" to add that check to your sales books and there is no other paper trail like credit card statements to back it up.

Becky said...

Taqueria Corona on Magazine St. definitely takes cards too. Maybe a typo?

Leigh C. said...

Shows how long it's been since we went to Tacqueria Corona. They used to be cash only. Guess we can start going there again. ;-)

Snakebite said...

It's called the free market. If the restaurant suffers because it doesn't accept plastic, then it will adjust or go out of business. Deal with it. This is not Russia.

Also, I carry some cash for safety's sake. I use plastic as much as I can, but carry cash (using it only at bars 99% of the time) because there's nothing more liquid and you never know when you're going to need it.

With all that being said, I do hate when an expensive establishment is cash only. You really have to prepare to go. It's when you're blindsided that it hurts. In the end, while I do prefer to use a card, I'm on Team Peter because I like capitalism. Not everywhere takes food stamps but I don't see that point being argued.

Donnie Boy Riguez said...
This comment has been removed by the author.
Rene said...

Can we all agree at least that a restaurant that is cash only, but has an ATM that charges a fee is violating free market principles, is piggy backing, is a freerider, is Communist, hurts puppies, and hates the Saints?

Vasu said...

@Leigh C.

Have you not been to Taqueria Corona in 10 years? Cause that's how long I've been paying with a card over there :-P

Snakebite said...

What would really illustrate the free market is to see a restaurant advertise its free ATM. It would gain a leg up on every other cash only establishment, allbeit not that many, but I know hearing about that would attract me more than cash only would deter me. Plus, the advertising would increase your customer base, therby increasing revenue.

Problem is, the ATM is not always owned by the restaurant, so you have someone who sees a lot of foot traffic + people who need cash and says, eureka.

This would actually be a great study for an economics student to do.

Leigh C. said...

Actually, Vasu, ten years sounds about right. Crazy, I know, but true.

Cash-only places need to get with it. Really.

Beth & Jeremy said...

I don't know if this qualifies, but isn't Slim Goodies a cash only place? The first time I went there, I didn't know that it was cash only. When I told the server, she told me to go ahead and leave, go to my bank's ATM and get back to them to settle up "when I had a chance". Thought that was pretty kick ass, as I was paying for three people's meals. Of course, I left and returned ASAP.

BC said...

BC hates cash only places; it's a hassle. Sure if it's an event, like Mosca's, you can make an exception, but otherwise I just prefer not to do business with folks who don't make it convenient for me. I think not accepting credit cards is a customer service issue, more than anything. It's an f-u to your customers; the restaurant's inertia is more important than the customer's experience, and that's just plain wrong. Heck, even the taco truck near The Alamo takes Discover.

jeffrey said...

I don't have a very strong opinion on this. I tend toward the notion that most businesses should strive to make their customers' experience as convenient as possible and then figure out how they're going to make money while doing that.

At least we're not arguing the merits of "cashless" policies at restaurants. Not yet, anyway. Because that notion, as well as all you people who "don't carry cash" scares the bejeebus out of me.

Fat Harry said...

Casamento's definitely has not always had an ATM, I've had to go to Ms. Mae's (The Club) to get that green.

Clay said...

Nothing is more annoying than 5 people in line in the morning at Still Perkin and everyone is paying with a credit card...

Donnie Boy Riguez said...

Morning Call behind Lakeside is cash only. They do have an ATM on site.

Anonymous said...

Bacchanal definitely takes cards inside.

Christine Briede said...

How about a novel concept? Raise your prices 3-5% and offer a cash discount. What kind of havoc would that create?

chamooch said...

Had dinner at Adolfo's this weekend and felt lucky to have enough cash on hand to cover our $60+ bill. No heads up on any of the signage. Had I not had the cash, it would have been an expensive jaunt to an ATM for me.

It's their business if they want to go cash-only, just as it is for the restaurant whose menu is photographed for this post. But *puh-leeze* spare us all the "we do this for the CUSTOMER!" lame ass excuse. All-cash businesses, or even mostly-cash businesses, have a built-in ability to get very creative when it comes to reporting income. Being all-cash is solely for the benefit of the operator, not the customer.

Christy said...

I hate cash only. I get why businesses do it but it is a complete pain since I rarely have cash on me. Typically I'll pick the places that takes cards vs. a cash only joint since it is a matter of convenience. Having to try to locate an ATM,guess how much money I'll be spending, then try to stay within that imposed budget really takes the joy out of dining.

Anonymous said...

I own a small cafe in the FQ. You must understand that both Credit Cards & ATMs are just another way for banks to put their hands in your pockets. Make no mistake about it, Credit Card costs are passed on to the customer. And that 3% to 5% everybody's been talking about is false. Business owners do not deal directly with the credit card companies. Instead they deal with a middle man. Fees can range any where 3% to 5% PLUS a flat charge of $.05 to $0.15 per transaction. And it can take up to 48hrs. for the funds to be deposited in the retailer's account. Think about that the next time you use your card to buy a a shot of espresso for $1.25.

Anonymous said...

You all are missing a VERY important point (I am a minor restauranteur and prefer to remain anonymous :)). The problem we have with credit cards is the HUGE fear of POS hacking - this happens all the time to restaurants and guess what - we are responsible for the charges. Check out this story about the $120,000 plus nightmare at Jones Creek Cafe in BR - http://www.2theadvocate.com/news/80184917.html

We are in the food and customer service business and are typically counting on some outside company or service to handle the security of the credit card system - unless you are some tech genius (I can assure you those of us in the food business are not) it is scary. I am nervous every day that I will be hacked or some such crap that will put me out of business. But I still take the cards - because not taking them would be even worse.