Cash-Only Is Hurting Your Restaurant's Reputation

When I encounter a cash-only restaurant, I immediately think that the business is not operating entirely above board. It’s like a metaphorical flashing neon sign saying, “We’re doing something to break the law!” That something could be anything from tax fraud to money laundering and funding even more serious illegal activities. 

I know that may sound dramatic, but that’s my gut reaction. 

I recognize that some businesses would rather not pay credit card fees. Others just trust the safety and reliability of cash. Though it feels like a very dated mentality, I get why a restaurant owner would feel more secure holding cold hard cash over a credit card slip. At the close of the day, however, is all of that cash being recorded in official accounting logs?

Perception of your restaurant is important. It’s why you put so much thought and care into the menu layout, the food you serve and the inside décor. There’s a certain perception and tone you’re trying to convey, so if you go cash-only it’s important to at least understand the negative connotations that come with it.

Not paying all of its taxes

This is the most obvious illegal reason why a business would choose to be cash-only. It’s much easier to hide revenue when there isn’t a paper trail of credit card receipts to follow. At a cash-only restaurant, the only people that truly know how much the business is earning are the ones who count the money. When a business owner can save himself tens of thousands of dollars in taxes, what’s keeping him from doing some creative accounting?

Paying staff under the table

It’s one thing to commit tax fraud as a business owner, it’s another to make your staff complicit as well. When you’re young and naïve, getting paid under the table seems like the greatest thing since sliced bread. You immediately make more money, and experience the rush of having a stack of crisp hundred dollar bills in your pocket. 

What no one is telling staff is that the restaurant’s “generous” owner is putting them in the crosshairs of the Internal Revenue Service. 

Laundering money from illegal activities

At a cash-only restaurant, a truly nefarious business owner could intermingle profits with “dirty” money from illegal activities like selling drugs and human trafficking. When the goal is hiding money and making large sums of cash appear legitimate, a restaurant is one of the most common vehicles to do so. 

Eater recently published a great article that explains why restaurants are ideal businesses for laundering money

Every day, I collect my restaurant receipts to take to the bank and make a daily deposit. But I also take a major portion of my drug proceeds and mix it in with my restaurant proceeds. Then, I make the deposit. Because I am doing this continually, and as long as the cash stays roughly within ten percent of the same amount every time, the bank won’t be as suspicious.
— Professor Kerry Myers, University of South Florida

At worst, cash-only restaurants seem like they’re skipping out on taxes. At best, they’re turning away customers who don’t have cash in their pockets. 

There’s nothing worse than having a great meal, putting a credit card into the guest check holder, and being told that the restaurant is cash only. Guests then have to do that awkward dance with the waiter of apologizing for not knowing, and then asking where the closest ATM is to the restaurant. As you walk out of the restaurant, often into a cold, dark night, you leave your date as collateral to prove that you’re not trying to step out on the bill. 

I’m not alone in my frustrations. According to Zagat’s National Dining Trends Survey, a cash-only policy is the No. 1 thing that would stop consumers from dining at a restaurant, with 38% of respondents calling this a deal breaker.

In an age where a restaurant like Sweetgreen are going cashless, do cash-only establishments still have a place in our society? As mobile payment becomes more prevalent, should cash-only restaurants go the way of the dodo bird?

Is your bar or restaurant cash-only? Let us know why in the comments below!