There’s a quaint little coffee shop nearby that is usually bustling with customers early in the morning. As you walk through the front door you are immediately wrapped in a warm blanket of aromas from the fresh pastries and goodies baking in their ovens. In addition to coffee and baked goods, they offer catering services for any special event. But we wonder how much longer they can survive on accepting only cash. We also wonder how much more business they could be doing if they accepted credit cards as a payment option.
A dangerous mindset
When you talk to the middle-aged woman who owns the coffee shop, she insists that her customers are ‘just fine’ paying with cash. And she gladly accepts paper checks for the large catering orders she fills. Somehow in her mind, the risk of getting a bad check is more tolerable than paying credit card transaction fees. Couple that with her desire to retain that quaint, old-time feel and she is firmly set against the idea of adding this very common convenience to her business. And we think that’s a dangerous mindset for any business owner.
Businesses can no longer get by without accepting some form of plastic: By 2017, just 23 percent of all point-of-sale purchases are expected to be made with cash, according to a study by market research firm Javelin Strategy & Research. That means more than three-quarters of transactions will be conducted with credit and debit cards.
Did you catch the date in the first sentence of this quote? 2017. That prediction is only two years away, not twenty.
What she is missing
Our coffee shop owner is missing some significant benefits for both her customers and her business. Let’s take a closer look at just a few:
- Even her most loyal customers don’t always carry cash and may opt to drive to a shop that does accept credit cards simply for the convenience.
- Customers will only spend the cash that’s in their pocket. She is missing out on the impulse buy many times a day. And that wonderful aroma of fresh-baked goods is a built-in sales tool that’s pretty hard to resist.
- Employees in a cash business can be tempted and go undetected. It’s too easy to take a buck and put it in your pocket instead of the register. And that cup of coffee doesn’t show up on any inventory reports.
- A bad check is rarely recovered, and since she’s using them for her largest sales transactions she stands to lose a lot of money along with the time to chase it down. A credit card that’s declined on the spot will save her a lot of headaches.
No business owner would intentionally send good customers away. So is it any better to send them away unintentionally? If you happen to be one of those hold-out business owners who has resisted this change, it’s time to reconsider. And don’t worry, we make it easy and affordable for any business to accept credit cards.