Why Your Business Shouldn’t Be A “Cash Only” Business

  • November 18th, 2013
  • Mike Alder

Face it, cash may not be king anymore. It’s dirty, bulky, and can be easily lost. The reason why cash has been considered king in the past is because everywhere takes cash. On the flip side, not all businesses (mostly small businesses) don’t take credit cards.

Welcome to 2013, where start-ups and small businesses commonly are using mobile card readers in order to grow their business. This is because Credit and debit cards are use more than cash because of convenience for the customer and even the business. If you’re one of those “cash only” businesses you are missing out on potential customers. The following are examples of small businesses I personally interact with that use mobile card readers to accept payments:

Braxton’s Barber Shop & Shaving Parlor

I was introduced to Braxton’s six months ago. When I first heard about it, I thought it would be like every other place you get your hair cut, but I was wrong. Braxton’s is run by Braxton and only Braxton. He depends on providing the best experience for each of his customers and a small but important part of that experience is paying they way they want to.

Over The Counter (OTC)

This is an amazing breakfast and lunch diner. I have been going here at least once a month for the past five years. They were a “cash only” business until this year.  Before they made this change there were many times I had to cover a friend’s tab because they don’t carry cash. No more having to hit up the ATM or bank before indulging ourselves for a Saturday breakfast or brunch.

Shep

Everyday around 11:30am, Lendio employees get an email from our receptionist stating, “Shep is here if you would like to purchase lunch from him today.” He travels to different offices selling sandwiches, salads, wraps, and chips and drinks. His business is the convenience of a good lunch without leaving the office. After talking with him he confirmed about ninety percent of his customers pay by card.  Thus, if he only took cash he would be turning away a major percentage of his customers.

Each of these businesses use mobile card payment devices to accommodate their customers. So why should you get a mobile card reader? Joel, one of my colleagues, put it best saying, “Having a device to take credit cards is a necessity for any business today. Panhandlers should even have one!” But seriously, here are some other legitimate reasons why you should get a mobile card reader:

 1.    Its not for you, it’s for your customer

“Cash only” businesses only do cash because they don’t want to pay the percentage of the sell to the credit card companies for the swipe. According to Javelin Strategy & Research, a market research firm, in 2011 only twenty-seven percent of all point-of-sale (POS) purchases were done with cash. Based on past trends they even predict by 2017 it will close to twenty-three percent.

2.    It’s Simple and Affordable

Until recently, POS software and hardware were expensive because no one had revolutionized the market. Square, the most popular mobile card reader for small businesses, helped do just that. Square provides a free reader and app in return you pay only 2.75% per swipe for all major credit cards. No monthly payment required or outlandish expenses to have the POS software and hardware. The best part is as your company grows, square will work with you to lower that percentage base on your volume of swipes.

3.    Paperless receipts and transactions.

No more having to keep all your receipts or worry about getting copies of receipts to your customer. Square has the ability to e-mail or text the receipt directly to your customer. The coolest part is you can actually customize the receipt to have your company information, logo, and other features.

4.    Direct Deposit

When you make a sale it deposits the money into your attached bank account in 1-2 business days. The percent per swipe is taken out automatically. Simple, quick, and easy.

5.    Data

You are able to customize the product and/or services you sell. When you are able to track those sales on a POS You can learn a lot about your business. Here are some questions that data will easily answer:

What’s selling?
What’s not selling?
What are your busy hours?
What are your slow hours?
What days do I get the most traffic?

When you are able to look at months or even years of this type of data you can really begin to understand and grow your business.

6.    Built-in Rewards

Gamification, rewarding customers for engagement with your company, is a great way to build customer loyalty and drive up sales. You’re able to build out your own reward system when your customers do various things (i.e. make a purchase). No more having to waste money printing off punch cards that customer forget to use or lose.

There are multiple different companies that office POS software and hardware. Some are more expensive than others. Do your research and find out what provider you like best. Start with these:

Square

Intuit

PayPal

VeriFone

About the Author

  • Mike Alder

Mike Alder is a University of Utah business marketing student and marketing specialist at Lendio. Passionate about entrepreneurship, small businesses, and inbound marketing. Mike shows his passion by sharing stories of successful entrepreneurs and companies with small business owners on the Lendio blog. He makes these big success stories easy-to-apply in simple and easy to read language for the everyday small business owner and entrepreneur.

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