New York Restaurant Loses Its Appetite for Cash

[question everything]

SEPTEMBER 11, 2009

New York Restaurant Loses Its Appetite for Cash

By ASHBY JONES
WSJ

NEW YORK -- At the Greenwich Village restaurant Commerce, cash is off the menu. In the latest encroachment of credit and debit cards onto the greenback's turf, the high-end New York City restaurant said goodbye to dollars and cents this week. The message to diners: Tip in cash if you wish, but otherwise, your money is no good here.

Americans these days are swiping their cards to pay for taxi rides, donate to Salvation Army kettles, even tithe in some churches. And at Commerce, more than 90% of customers had already made the switch to plastic. "If you don't have a credit card, you can use a debit card," said the restaurant's co-owner, Tony Zazula. "If you don't have a debit card, you probably don't have a checking account. And if you don't have a checking account, you probably shouldn't be eating at Commerce to begin with."

In the world of online and catalog retailing, credit and debit cards have long been king. And in recent years, a handful of airlines have adopted "cashless cabins." While Commerce isn't necessarily breaking new ground, experts say only a smattering of brick-and-mortar retailers have embraced the card-only option. "We see it from time to time, but it's not for everyone," said Robert Hammer, chief executive of R.K. Hammer, a bank-card advisory firm. Mr. Zazula, a veteran Manhattan restaurateur with an M.B.A. from Cornell University, decided the move was right for Commerce several months ago while on an American Airlines flight. "The flight attendants weren't accepting cash for any of the food," he recalls. "Suddenly, it struck me how unnecessary cash was."

(snip)

Mr. Zazula didn't back down. While other new and buzzworthy restaurants nationwide still buck the credit-card trend by refusing to accept anything other than cash -- bypassing the surcharges levied on every purchase -- he said the convenience and security afforded by going cashless are well worth the added cost. Gone is the age-old restaurateur's fear of getting robbed, either by outsiders or his own employees. "No more armored trucks," he says. And going cashless allows restaurants to please the Internal Revenue Service, because cash-based transactions are easier to hide.

(snip)

Credit-card industry experts say they expect more establishments like Commerce go cashless. "It's very plausible that at higher-end restaurants, we'll start to see more of this," Mr. Hammer said. But he said the move will be slow, and less-expensive eateries may not go there. "I just don't see it," he said. "Cash isn't a bad thing."

http://online.wsj.com/article/SB125260838282300453.html (subscription)

Printed in The Wall Street Journal, page A6

[tabatha]

1. And in some places, checks are being used as debit cards.

At the time of purchase, the amount is debited from one's account, and the check returned.

[slampoet]

2. "The flight attendants weren't accepting cash for any of the food,"

UM, last flight i was on they WERE accepting cash for Alcohol.


This moron will be back once he realizes that he is saying goodbye to 2-3% of his income in processing fees. Here in Rhode Island 3 of my ten favorite restaurants are CASH ONLY and one has recently done that after a year of being open.

[question everything]

4. Several weeks ago, on these pages, someone posted how her diabetic son

was flying alone, had money to purchase something to drink but the flight attendants were not accepting cash.

I think that finally someone felt sorry for him and gave him water.

[Statistical]

11. What airline makes you pay for non alchoholic drinks? n/t

[question everything]

18. He needed a meal, not a drink. Found the link

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=6229871

and someone finally gave him a bag of chips.

[Statistical]

23. Yeah that is screwed up.

I mean rules are rules but sometimes you need to be smart enough to look beyond the rules.

1) airline food sucks nobody eats them unless they have too
2) he is a kid
3) he has a medical condition

Sadly there is little common sense used instead of strict adherence to the rules.

[slampoet]

24. i had a girlfriend in the same situtation in the Detroit airport. Everything closed at 7pm but our

flight was delayed til 11pm. We had to bribe a staff person to drive us to somewhere else. That hot dog ended up costing me.

[question everything]

27. Wow! After reading the recent stories about passengers stuck on a tarmac

for hours, I made a mental note to myself to always pack a couple of snack bars to take on the flight. Any flight. One of them was a short one from Houston to the Twin Cities, and was stuck in Rochester, MN, for a whole night.

[petronius]

28. I was on a flight last Christmas that charged for everything - don't remember for sure

but I think it was US Airways. We were prety shocked that we weren't even going to get free water...

[Gormy Cuss]

46. It probably was U.S. Air. They have since rescinded the policy

because the other carriers didn't follow suit.

[quakerboy]

6. If 90% of his biz was already card based

then switching the last 10% over would only be a .2-.3% loss from where he is now. Not likely to make much difference to him, if the current 1.8-2.7% didn't already deter him.

[Statistical]

15. Also like he said he never needs an armored car.

Armored cars charge a minimum per run so if he has little cash business the overhead could be rather high.

This is why Walmart started offering cashback on debt cards. It allowed them to hand out lots of $20 bills that otherwise would require an armored car. It saves Walmart money if you use cashback.

[quakerboy]

19. Is that why all the grocery stores

are now pushing the cash back? It makes a twisted sort of sense.

[Statistical]

7. Not all of them.

I can't remember which airline but when I flew to Las Vegas on business they didn't.
They swipe your card and hand you a receipt with your drink.

It actually worked out well for me because I forgot to bring cash.

For a large business with 100% of transactions keyed (manually swiped vs online/mail) the discount rate can be as low at 1.25%.

[Gwendolyn]

14. Most high end restaurants don't have many cash customers anyway.

Dinner for two at this place can very easily run between $200-$300, and not that many people carry around huge wads of cash.

[Raineyb]

33. That's not true.

Peter Luger is no cheap eat and last I heard they don't take plastic.

[aikoaiko]

41. Sure, there are cash only high end restuarants, but most if not all the customers

...could have paid with credit/debit.

[rucky]

36. The swankiest steakhouse in Dayton is cash only.

Though they extend credit to some of their regulars. It's been that way for the Pine Club for years, and is unlikely to change. It's kinda cool and smart of them, because it's something they're known for and it pops up in conversations around town.

[tavalon]

21. Alaska Airlines

Last weekend. No cash accepted for food or drink. Credit and Debit only.

[slampoet]

22. Delta airlines two weeks ago. Cash only.

I guess it's all just where you go. (and if you're in coach)

[tavalon]

26. We were in coach

I wouldn't have known about it because we didn't order food or drinks on the way to Southern California except I heard someone else ordering and noted it. It was useful information when we came back because it was definitely a two drink ride back.

[petronius]

29. Same on Virgin America last month (nt)

[rucky]

35. My last flight two days ago, they did not accept cash.

I guess it depends on the airline.

[quakerboy]

3. How does that accord with

"this note is legal tender for all debts, public and private"?

[Statistical]

9. That is a question I have always wondered.

I guess the logic is they prevent you from incuring the debt to begin with.

You have a right to pay a debt w/ cash but you they don't have to let you incur the debt (eat there)?

[question everything]

10. Not for private business

From the Dept. of the Treasury

The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

http://www.ustreas.gov/education/faq/currency/legal-tender.shtml

Another interpretation by a reader of the WSJ

Treasury’s interpretation is right — they’re talking about the concept known as an “offer to treat” or “offer to bargain” and generally, transactions where the obligation to pay arises and goods or services are received simultaneously. A store can forbid, say, bank notes over $50 because the person shopping there is made aware of the store’s terms before any debt is occurred. Say I want to buy a candy bar at a gas station, but I’ve only got a $100 bill. The store refuses to take it and since I’ve not yet incurred a debt with them (I haven’t eaten the candy bar), they don’t have to take my $100 and I don’t owe them any money. We simply walk away.

But in a restaurant, you usually pay after you’ve eaten the food. You’ve incurred a debt, and you’re allowed to pay for it later. It’s not always clear how much the final bill will be or what payment forms will be accepted and without putting it in writing, it’s difficult to say I knew that they wouldn’t take cash or that they don’t take Discover, etc (did I fully understand the terms of the offer?). A restaurant that allows someone to incur a debt (eat their food) and pay later becomes a creditor and would be required to accept legal tender to satisfy that debt, unless there was some offer to treat or bargain in the mix, say they explicitly told their customers — in a very noticeable way — that they would only accept credit for payment and you still decide to eat their food or they make you pay up front before you even get it.

http://blogs.wsj.com/law/2009/09/11/cashless-in-manhattan-but-is-it-legal/

[quakerboy]

17. Then why does it say "and private" on my Dollars?

Whats the point of having that on there, if its not true.

To extend it to the slightly ludicrous, Couldn't I have dinner at a local diner, go to pay, find my old high school Nemesis is behind the till, have her refuse my cash, call the police, and say that I didn't pay for dinner, and press charges?

[flvegan]

5. It's late, but if memory serves, I don't think they can do that.

IIRC, if they collect before service is rendered, they can refuse cash. However, the law of "legal tender" and cash can't be denied once services have been provided.

I'm sure (and hoping) that the more awake and clear-headed DUers in the know will correct me if that's the case.

[lapfog_1]

8. My recollection of old case law

is that IF you offered cash to settle a debt, and the cash is refused as payment, they cannot charge you with theft or with non-payment for services rendered.

However, that's old case law, Corporations, being the greedy bastards they are, probably have new case law to support them on payment by check or credit card / debit card only.

[Statistical]

13. Maybe it is as simple as the waiter tells you in advance.

"Just so you are aware xxx is a cashless restaurant. We do accept x,y & z".

[question everything]

12. See comment 10, above (nt)

[beac]

16. I wonder how the servers get their tips at the end of the night? n/t

[justabob]

25. probably won't... tips will come on a paycheck most likely

and the restaurant may or may not take that opportunity to screw the waiters et al. That is the part of it that I don't like... servers and their money. I have heard too many horror stories in that vein in my years in the business.

[Berry Cool]

37. The article says diners may tip in cash if they want.

I always tip in cash whenever humanly possible and will try to avoid eating out if I know I can't cover a cash tip. That way, you're doing your best to make sure the money goes into the server's pocket THAT NIGHT. (If it doesn't get there, anyway, it's not your fault, you did your best.) The server doesn't have to wait to be recompensed later on. Also, there's less chance of the restaurant depriving the server of a tip placed on a card, or forcing the server to split it with the house or the other servers.

[question everything]

42. Right. Several weeks ago we had a long thread here about tipping in cash

and for many of us it was an eye opener, once we heard from DUers who are/were servers.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=6174198

[tavalon]

20. And if you don't have a checking account, you probably shouldn't be eating at Commerce to begin with

That alone is enough to insure I won't ever eat at Commerce, with or without my Debit card. Fucking elitist bastard.

[imdjh]

30. Elitism in commerce is called cachet.

It's one of those things. The people who want to eat in a restaurant with a policy that offends you are not offended by the policy and are encouraged by the fact that it offends you.

[yodoobo]

32. +1

that attitude tells me all that I need to know.

[Statistical]

34. My understanding is it is a $200 - $300 for a couple.

I me the point is somewhat valid.

It would be like saying if you don't have a checking account you shouldn't be buying private jet.

I will never eat there, it isn't their policy that bothers me it is the fact that I am not going to pay $300 for a meal.

[imdjh]

38. It's funny that we're supposed to believe that these New Yorkers are the smart ones.

We're supposed to be impressed with how much they pay to live, play, and eat in that city. Who wouldn't want to live in a building that smells like cat piss and roach killer? Who wouldn't want to pay $10 for a pack of cigarettes or a cocktail? Who wouldn't want to have some bum coming up to you while you are eating your lunch at a sidewalk cafe? It's terribly sophisticated.

[question everything]

43. That, too (nt)

[yodoobo]

31. Sounds like they found a way to get some free press

If one were to go there, and found that your credit card charge was declined, I seriously doubt that they will refuse an offer to settle up in cash.

[Stephanie]

39. They don't need press. They probably don't even want press.

That might encourage "the Visigoths from across the river" to invade.

http://nymag.com/listings/restaurant/commerce/

[aikoaiko]

40. And so it begins.........

There is a part of me that wishes I could go off the grid and live by cash only. Its just a privacy thing.

[Statistical]

45. They make reloadable prepaid debit card with no name on them.

Would allow you to be anonymous but still have access to places that take only plastic.

[aikoaiko]

47. I got one at Wallyword once and they required ID and SS#.

its hard to really get off the grid with plastic and still be honest.

[Statistical]

48. Really? Man I always saw them all Wally and also at 7-11 never considered they would want ID.

The card itself has no name on it but if you need ID to activate the card that kinda defeats the purpose.

[Winterblues]

44. In early sixties a magazine called FATE had some Psychics making predictions

One of them named Doc Anderson made a prediction that has stuck with me. He said by the end of the first quarter of the new millennium people would no longer use money to buy things with. They would just use plastic cards. That actually was before Visa and Master-card were in every wallet. In fact there was no VISA at all back then.