Why is "cash only" in San Francisco so common? (sale, credit card)

[digital-ghost]

I'm fairly new to the city and love the variety of restaurants and bars, but I'm surprised, and a bit annoyed, that such a large percentage of businesses only take cash.

What are your thoughts - is it mostly tax evasion, or is it more complicated than that? I've never worked in a business where the CC processing fees were so high that it justified inconveniencing customers. And with bars, I can't imagine that the CC disputes would outweigh the idea that people spend more when they have an open tab.

I just dislike having a lot of cash on me, and sometimes my paychecks are so far in between that there's a window where I don't have a choice but to charge and then pay it off when the check comes...it has nothing to do with wanting to rack up debt.

Also, do you think cash-only establishments should be strictly audited?

[mayorhaggar]

If you're doing a lot of small transactions like $1-10, like at a convenience store or coffee shop or pizza place, then paying around 40 cents per transaction is eating a lot into each sale and adds up. If you're a big restaurant or a store where most bills are $50 or more, it's nothing. For bars I dunno, I never pay with a card. It might be because bars are usually small and get really crowded so having several credit cards sitting around by the cash register would either get unwieldy or confusing or there'd be a risk of them getting stolen. Also there are about 2-5 ATM's on every block.

[sav858]

I've noticed this too about SF and I don't know why so many places are cash only, it's ridiculous and annoying. For some reason, SF just seems to be worse than other cities when it comes to this and I really don't know why.

[gnomatic]

Because a lot of these cash only places are small locally owned businesses. Credit card fees cut into their profits.

As a consumer, I prefer the better service and/or products I tend to get from small businesses. Its worth the "inconvenience" to me.

US dollars are still the legal currency in this country ... not credit cards. No business should be "strictly audited" because they accept cash only. If you don't like it, don't patronize cash only establishments.

[silverkris]

I think you should be talking to financial institutions and credit card issuers, not the small businesses who feel they're getting gouged by the credit card companies.

[digital-ghost]

I see what you mean mayorhaggar - I guess my assumption was that transaction fees were a percentage of the overall transaction, not a set fee. (This has been my experience with payment gateways anyway, but I've never run my own business so I clearly don't have the insight on all aspects.)

Yes, there are ATMs everywhere, but there are a lot of reasons why it's more convenient to pay with a credit or debit card.

[digital-ghost]

Originally Posted by gnomatic

US dollars are still the legal currency in this country ... not credit cards. No business should be "strictly audited" because they accept cash only. If you don't like it, don't patronize cash only establishments.

I see your point. I was curious what people thought about this since cash-only businesses historically have a reputation for evading taxes and "playing dirty" when it comes to bookkeeping...but naturally big businesses aren't exempt from this behavior. And many believe that a company that evades taxes does end up hurting EVERYONE, even if it's indirectly.

[SunDevil1212]

Most of the places I've seen cash only are at dive bars, so I'll address those business....

I can understand the cash-only policy on purchases of less than, say, $20....Especially at places like crowded bars. It annoys me when I'm trying to get a drink and the bartender is occupied because he has to spend his time closing out tabs for one $5 beer.

Also, I have no clue if this is true but I speculate that the bartenders make more money in tips at cash-only bars. Say you're at a cash-only place with $3 beers. I think it's fairly common for most folks, when approaching the bar and paying cash, to tip $1 a drink. For a $3 beer, you're tipping at 33% each time you go up to the bar to order. For $4 beers, you're tipping 25% each time.

On the other hand, if you run up a tab and close-out with a credit card, you're probably just gonna do the exact math and tip the 15-20% you are accustomed to.

I dunno, I'd like to get a bartender's perspective on that. I've never worked in the industry....

[gnomatic]

Originally Posted by DeliberateDelusion

I see your point. I was curious what people thought about this since cash-only businesses historically have a reputation for evading taxes and "playing dirty" when it comes to bookkeeping...but naturally big businesses aren't exempt from this behavior. And many believe that a company that evades taxes does end up hurting EVERYONE, even if it's indirectly.

If I don't understand a situation, I ask questions. I don't jump to conclusions based on stereotypes, assumptions, historical reputations. I don't assume that just because I find something inconvenient ..everyone else thinks the same way.

I can honestly say, tax evasion was NOT the first (or even second) thing I think of when it comes to seeing a cash only sign at an establishment that I frequent. But perhaps that is another difference in personalities.

A lot of small businesses also don't have large credit lines at their disposal, they need quick access to their funds to make ends meet. Credit card purchases (if I remember correctly) takes time to process and funds dispersed back to the business.

So really... you should understand it better than anyone else. Since the reason YOU find it an convenience to use credits, is that you don't have funds available to you.

[digital-ghost]

Originally Posted by gnomatic

If I don't understand a situation, I ask questions. I don't jump to conclusions based on stereotypes, assumptions, historical reputations. I don't assume that just because I find something inconvenient ..everyone else thinks the same way.

It's not unfair to make assumptions based on historical reputations or based on norms. In most cities and towns across the U.S., it's pretty rare to see cash only establishments, and when you do, it's often because they want keep a lot of things "off the books." (And I can't entirely blame them for doing this since it's hard to get by as a small business.) So if you move to a city like San Francisco where cash-only businesses are everywhere, I think it's totally valid to think, "I wonder if this has to do with tax evasion, or is it more complicated?"

So really... you should understand it better than anyone else. Since the reason YOU find it an convenience to use credits, is that you don't have funds available to you.

So clearly you DO make assumptions, since you seem to know the ins and outs of my personal finances.