Accepting Debit and Credit Cards Could Improve Cash Flow

Wed, 25 Apr 2012

As a business owner, you make a lot of critical decisions when choosing your operating model, and one that always leaves me scratching my head, is why a business would refuse to accept credit or debit cards. During a recent trip to a deli I was greeted by a hand written sign with the stern message, CASH ONLY!!! When I turned around to walk out, the very sweet-hearted woman behind the counter asked if anything was wrong. Yes, I said, your competition on the corner will take my debit card and you won’t.


Is Cash a Thing of the Past?

I imagine I am like a lot of people these days in that I don’t often have cash on hand. Years ago I would feel uneasy if I didn’t have a little cash for those daily incidentals, but the world is different today. You can pay for your “dollar menu” item with a card and not think twice about it. I enjoy using my card. It’s fast, safe and I get a record of my purchases on one statement. This has become a common feeling for many consumers. So much so, that when we are presented with not being able to use our cards, I for one, will take my business elsewhere. Do the business owners that don’t accept plastic realize that they are losing their share of business due to an avoidable disadvantage?  


Fees vs. Losing a Sale

If you’re a business owner that doesn’t accept debit or credit and it’s due to fees, you need to calculate how much money you are losing in sales from customers walking out versus how much you would lose in fees for making a sale.  The only person that can make that decision for your business is you. But keep in mind, there is tremendous value in this cost of doing business.  


Improve Cash Flow

Every day we interact with businesses that are doing everything they can to better manage their cash flow. We see receivables in excess of 30 days, 45 days, 60 days and more. In my humble opinion, every business should consider taking card payments at point of sale/service to take advantage of next day funding and drastically improve their cash flow. They may find it transforms their business!  In today’s world of simply downloading a smart phone app and plugging in a card swipe, even the smallest business owner can accept cards for payment in no time. Imagine that… anywhere… anytime. Rather than leaving invoices behind, the landscapers and electricians of the world can be swiping cards on their smart phones right on the homeowner’s front step! No more chasing customers for payment night after night, after a long day’s work. Also, their customers will love getting their reward points and sky miles.


What’s your opinion? Do you leave if a business won’t take your card?

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5 comment(s).

Amy Quinnan
April 25, 2012 at 11:22 am
I leave. I went to a store one time and had around $30.00 worth of merchandise and when I got to the register I saw a sign indicating they didn't take debit or credit cards. Embarrassed, I had to explain that I don't carry cash or checks so I was unable to make the purchase. The cashier explained that that the fees were too high. All I could think was that my purchase had to be worth more than the fee! They missed out on my purchase that day and any future purchases I would have made. Not surprisingly, the shop went out of business later that year.
April 25, 2012 at 3:40 pm
Thank you for sharing your experience and reaction. Sorry to hear the business is no longer, but can’t say I’m surprised.
Bill Leighton
April 25, 2012 at 7:28 pm
It really depends on the circumstance and the attitude of the employee(s). We were at a farm in Canton 3 or 4 years ago. I couldn't contain the Indian-American princess/wife who grabbed as many Italian based San Marzano Tomato plants as she could. (Who sees that in Connecticut? The plants..that's is.) I don't recall seeing a cash only sign but you can imagine our mild shock when the owner/cashier stated so. My parents in law had an all cash based motel business, so we empathized with the owner. They had an ATM but we weren't Premier customers. We opted to drive to the closest Webster branch which was 10 minutes away in Avon. It was a major inconvenience but they had a lot of unique plants and we'll likely go back there one day as a last resort. Last time we checked, they were still in business.
April 26, 2012 at 10:05 am
I rarely carry cash with me anymore. I've left a gas station before because they wouldn't take my points I earned from my grocery store that were loaded on my iPhone. I have an app, Card Star, that holds all of my store loyalty cards so you don't have a messy key chain. Some stores can't scan it, but enter the numbers into their system, and it works the same. I was at a gas station that wouldn't do that and left and told him I would go down the street to the place that would. Every time I fill up, I spend at least $60. Things are all moving electronic, and if you don't keep up with the times or figure out a work around, your competitor will.
May 21, 2012 at 5:18 am
Any business that isn't willing to accept credit or debit card payments is putting themselves at a severe disadvantage. I, like most people, don't like to carry cash, it makes me feel a little uneasy. With credit and debit card payments things are kept simple. And I find that you spend less money. If I have cash on me it tends to disappear quickly and I don't always have a lot to show for it. By utilising credit and debit card payments I am able to manage my spending much more efficiently.