Cash Generates More Tips and Revenue for Small Businesses

Oct 30, 2020


With the COVID-19 pandemic encouraging a rise in businesses going cashless, it’s not just consumers who depend on cash losing out. A recent article in U.S. college newspaper The Dartmouth covers local business owners advancing the case for cash, and it comes down to more money in their pockets.

For a start, it’s obvious that individuals without bank accounts—or who simply prefer cash for reasons of budgeting, privacy or myriad other reasons—will take their legal tender elsewhere if their favoured payment option is not available. There will also be problems during power or internet outages, when digital payment methods are closed off and no one can pay for anything.

Beyond these issues, cash is lower cost for businesses to handle compared to ever-rising costs for credit and debit cards, and it encourages tipping. Overall, more money from a cash transaction goes directly to a business.

Cash is still more lucrative. There’s more profit in cash than there is in credit card. Especially for a place like ours, with small transactions, the credit card companies take a pretty big chunk out of the sales.
"Tom GuerraOwner of Dirt Cowboy Café, Hanover NH

Allan Reetz, Director of Public and Government Affairs at Hanover Co-op Food Stores, is similarly pragmatic when it comes to maximising profits, noting ‘if a customer would like to use cash, we’re ready to accept those dollars.’ He says there has been no discussion of the stores going cashless in future.

Even those with a strong preference for cashless payments recognise that cash remains essential to a sizeable minority, alongside those who choose it over other options available to them. Olivia Nadworny—a local interviewed by The Dartmouth—has lived in Sweden and embraced the largely cashless economy there. However, she does observe it is not accessible for all.

To have a bank account and a card, you need an address and things like that, which some people might not have. You don’t have to have those privileges to get cash.
"Olivia NadwornyHanover resident
Last Updated: Oct 30, 2020