Australian cafe owners have jumped on the anti-cashless trend after facing so many issues with digital payments: Richie Marchandise, owner of Mimolette Cafe in Melbourne, introduced a 10 percent discount for customers who want to pay with cash.
The French chef, who has worked in the hospitality industry for 20 years, said the cost-of-living crisis is worse than ever before as raw material prices soar, but he is willing to offer discounts to customers if they have the cash, despite the higher costs of virtually everything.
“There are a lot of problems with EFTPOS,” Marchandise said. Yahoo Finance.
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Digital payments and transactions are overwhelmingly popular with Australians, but Marchandise said it had been a long-standing thorny issue.
“EFTPOS doesn’t work as well as they claim. People get frustrated when the system goes down and sales are constantly lost. In 11 years, I’ve changed EFTPOS providers five times,” he explained.
As well as unreliable service, he says EFTPOS terminals often come with “hidden fees” for merchants – it can cost more than $2,000 a year just to install the digital payment system, he claims, plus another $260 just to order rolls of paper receipts in bulk.
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The cafe owner said there could be delays on weekends and public holidays before EFTPOS payments hit his account, which was causing him major headaches.
At one point, they were unable to pay a supplier on time and missed an important delivery while waiting for enough digital transactions to be processed.
This caused Marchandy’s to lose significant catering orders.
“We lost a lot of money that day simply because the EFTPOS funds didn’t arrive on time,” he said.
Tired of constantly relying on digital sales, he introduced a 10 percent discount for cash customers and has been amazed by the results.
Before the initiative, Marchandise estimated that about 5% of its sales were paid in cash; now that figure has jumped to 20%.
According to him, this is a huge help as his suppliers also prefer to be paid in cash, making business flow on that front much faster and easier.
Cafe staff also benefit from discounts
But the 10 percent cash discount had another ripple effect.
Steph has been working as a barista at the cafe for six months and said it was a big win for her and her colleagues.
“Before I started at Mimolette, I didn’t really understand the concept of tipping, but now my tip piggy bank is overflowing on a regular basis,” she said.
“At the end of each week, we split the tips among our staff, which is a great perk, especially since you rarely get a tip when paying by card.”
Social media is awash with photos showing a number of Australian businesses offering discounts to customers who want to pay in cash.
a Yahoo Finance Our research has uncovered offers of up to 50% off, as well as offers to gift free drinks and other items.
If you can’t make a hit to the bottom line, there’s always the “please” model.
Other images found on social media show signs placed at cash registers pleading with people to pay in cash if possible.
“Cash is our preferred method of payment. When you use cash, 100% of its value remains. 0% from the big banks and 0% from the card processing companies,” one sign read.
The dark side of cash
Offering cash discounts is not illegal, but the Australian Taxation Office (ATO) is aware that some businesses use cash as a “means of avoiding employee tax and payment obligations”.
Peter Holt, a former shadow deputy commissioner for the economy at the Australian Taxation Office (ATO), said while many businesses were doing the right thing, others were not.
“We know that staff may be underpaid, paid in cash, not receiving severance pay or not being paid the right amount, and the way to do that is to receive it in cash,” he said. My Business Podcasts.
“And consumers are starting to be a little suspicious of businesses that only accept cash or offer cash discounts. They should also consider that if you are offered a cash discount, the business may not pay the GST that they declare.”
Marchandise said there was a “stigma” attached to the hospitality industry when it came to cash and that he was not trying to evade tax obligations.
He said Yahoo Finance They are willing to take a 10 percent loss on a trade if it gives them the security of cash.
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