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Comment by marssaxman | Hacker News Reader

I got irritated with the profusion of "no cash accepted" signs a few years back and started making a point of always carrying cash, to use whenever practical. I don't take it to an extreme, but I also don't want to live in a world where every transaction is trackable and all commerce is regulated by Visa, Mastercard, Apple, or Google.

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In right there with you. I live in a small town and so whenever spending money at a local small business I try as much as possible to use cash. The shopkeeps who are also the owners are so appreciative as it's essentially a 5-7% "tip". It's difficult for them to keep good change though as people who do spend cash are either $20 or $100 bills which for a few $5-10 items consumes the small bills pretty fast. But in a no sales tax state so makes giving change easier (no coins)

> It's difficult for them to keep good change

I've felt this struggle from the other side working at a gas station attendant. We were only allowed to have $100 before the till made us dump it.

Can you break this $100 bill? Maybe if you pump another $50 in fuel, unless you want this roll of quarters too.

>The shopkeeps who are also the owners are so appreciative as it's essentially a 5-7% "tip".

Because tax evasion? Otherwise credit card interchange rates are nowhere that high, typically 3%.

Square is 2.6% + 15¢, so to get 5-7%, you could be doing most transactions under $5. That seems to require fairly high sales volume to make any decent wage though, so there is an added transaction cost for them to “keep good change” instead of serving more customers

Cash costs as much or more to handle.

Potentially ranging from 4.7% to over 15%, costs include labor for counting change, closing drawers, preparing deposits, security expenses like armored transport, bank fees for cash services, insuring against significant risks of theft and fraud.

True, but it's a hidden cost, so less "painful" to small merchants.

In the end: fairly unimportant... except for that perceived "cost".

If it's 3% + $0.30, that can easily be 5-7% for smaller transactions, which are the ones where I most often get asked to pay cash.

> The shopkeeps who are also the owners are so appreciative as it's essentially a 5-7% "tip

this is false reasoning on their part. They never have thought about how much cash costs them so it looks like extra money but it really isn't. they need to count the time lost to counting the cash as you pay, then the time to count the money in the till at the end of the shift. Each count above is 2 counts at best the average is closer to 3 because you sometimes get it wrong. There is also theft costs which is generally ignored but a real problem.

credit cards is money right to the computer which is not only fast it makes less mistakes.

Many banks also charge fees to process cash deposits for business accounts, as well. It's still often a tenth of credit card interchange fees, but between that, labor to balance your cash drawer, and actually go to the bank to make the deposit, the difference isn't as substantial as you'd make it out to be if you only look at the direct surcharges to process the payments.

That said, while I default to using Apple Pay for basically...everything, I too do not wish to live in a society where large companies get to govern every transaction I make. Or, for that matter, every transaction I make being on a ledger that the government can monitor.

> they need to count the time lost to counting the cash as you pay

Do they? Unless the shop's always serving customers, this may be free time.

Even if the place is jacked, if you have enough staff, this could be one trustworthy person (under camera surveillance) that has other functions throughout the day.

customers come in groups (lunch hour is when many shop) so the free time is a different part of the day and you send them home. When a clerk is counting cash they could serve the next customer. If there isn't a customer they could stock shelves or clean. stores might have one clerk doing nothing at a till but there are several more scattered around the store doing something else while waiting for a help needed call.

You also completely discounted the managers time counting cash in the backroom. That is more than an hours work in my experience, time that could be used for other things.

> they need to count the time lost to counting the cash as you pay

Many of my cash transactions are approximately as fast as or even faster than card transactions.

Plus cash always works while card transactions are sometimes not available or get declined which either means time wasted until the customer finds a working card or a lost transaction.

I think this writer focuses on the buyer side but on the merchant side, there are similar tradeoffs. People (employees, robbers etc) steal cash and it adds work to close out registers at the end of your day. Having no cash in your store solves those problems.

I run a non profit with membership dues and I have tried to just boot the 3% of our membership that pay w/ check or cash annually (I haven’t convinced the rest of the board so we haven’t done it yet). It takes so much extra time to follow it in real life, receive checks in the mail, and effort to deposit in the bank. It’s just not worth the time

Pretty scummy way to reject the people you rely on to fund your cause.

Do you get paid from this non-profit you run?

What’s scummy about this? Seems like the poster was giving a perspective where they are trying to maximize outcomes of the non-profit rather than maximize dollars raised.

It depends on the nature of the non-profit. If membership confers some benefit, then it would be deliberately denying that benefit to the class of people who can only pay by cash or check. That would be scummy.

No, I donate a lot of money on top of the time I volunteer for free. Someone has to spend maybe an hour every few months to deposit a single check for $50.

You got me on the rejection part because there are some benefits the members get (being able to attend social events, newsletters, etc) but if your donation is a net negative on an organization, I just don’t think they should donate at all. They don’t know it’s a net negative though and maybe would donate with an electronic payment but possibly don’t know? I think it’s mostly old people doing things the way they are used to

But TBH I’m not sure if much of this matters other than the ratio. Time is money and if there aren’t enough people utilizing something, it’s just not worth it to continue. If it’s a government org that’s possibly the only thing that needs to accept all forms of payment

I understand why people do it; but - there has to be some threshold beyond which you would not be considering this decision, doesn't there? Would you still be considering this if 5% of your members were paying in cash? 10%? There's a point at which it would be clearly worth it to you to accept cash.

All I can do is try to keep that share of cash users up through my own action, and talk about what I am doing to encourage other people to do likewise, in hopes that business owners will continue to see cash as a normal part of their operation worth maintaining, and not as an oddball nuisance.

I always carry cash. Just tonight, I saw that the local sandwich shop that I frequent put up a NO CASH ACCEPTED sign. I asked why the change and the worker said it is due to employee theft. I asked if the tip jar still accepted cash. “Yes,” he said.

I have similar concerns, but I think it's the payment conglomerates you have to worry about. Visa knows how much you spent, Fiserv knows what you bought.

Sometimes Visa also knows what you buy: https://www.marqeta.com/blog/data-details-what-is-level-1-2-...

It's not just Fiserv, there are often others involved as well. Even the merchant gets more data as they now have a fairly good way to identify you and correlate transactions.

Sure but that's only going to be among transactions that you made with that merchant.

i think anyone seeing very many piles of merchandise abandoned at checkout would be wise to review such decisions. it would definately be a failure to consider area demographic

Yes, I'm sure it varies by area.

But from a business point if view, cash is super expensive to deal with.

As a side-effect of an acquisition we inherited a small number of customers that paid in cash. Turns out it's expensive to bank that cash, it's a security risk, it's a risk to the person transporting it and so on.

In the general case, if most sales are already by card, the marginal gains of cash transactions are consumed by the cost of dealing with the cash.

I'm not saying stores should be cashless, but it's worth understanding that accepting cash is very much "not free".

How does that cost of accepting cash compare to the interchange fees? I’ve heard business owners say interchange fees were their single largest expense after payroll.

I’ve also gotten discounts on large purchases for paying “cash” (check). They effectively deducted the interchange fee from my bill. If cash was so expensive to process, they wouldn’t be doing this.

Again it'll vary by area. For us the cash was a lot more expensive. (Banks charge to deposit cash, and many of our bank branches don't accept cash anyway, so we have to go a bit further.)

Fortunately it was little enough that we didn't need a cash-transit vehicle, and it didn't affect our insurance.

Yes, I expect some merchants offer a cash discount, and that can add up for large purchases. But I'd prefer not to be carrying large amounts of cash. (We haven't had checks here for probably 15 years or so.)

We have a very efficient (and cheap) direct deposit system though, so I can pay via my phone straight from my bank app for a very nominal flat fee. So for large transactions that's akin to a cash discount.

The Bank of Canada did a report about this a few years back, and found that cash was the cheapest payment form for merchants to handle for transactions of up to $6 while debit cards were cheaper above that point; credit cards of course were never the best option for merchants.

https://www.bankofcanada.ca/2017/03/staff-discussion-paper-2...

For sure. Taking cash is basically a marketing expense not an actual way to get paid.

Which is of course why no store was profitable before the invention of cashless payments.

At that time the amount of cash you got was obviously much higher, so the costs of handling it as a percentage were lower.

You also wanted cash on hand at the time for obvious reasons (all your expenses were in cash) so having it coming in was inherently useful.

> profusion of "no cash accepted" signs

How this is even legal baffles me

As I understand it, the argument is: cash is valid payment for all debts public or private. But a sale isn’t a debt. The business that refuses your cash sale is refusing your business at the time of sale.

Apparently that explanation is even an FAQ on the fed website: https://www.federalreserve.gov/faqs/currency_12772.htm

NYC outlawed cashless operations after it started to become popular and the marginalized were increasingly locked out of everyday commerce. Hopefully it catches on in the rest of the US.