Cash Might Be King, but They Don’t Care

MCF Intersection

A regular snapshot of the trends, news and research in the world of philanthropy — and its impact on business.


The other day at Dig Inn, a just-opened lunch spot on Broadway and 38th Street in Midtown Manhattan, Shania Bryant committed a consumer faux pas. She placed her order for chicken and brown rice and yams, and when she got to the register, she held out a $50 bill.

“Sorry,” the cashier told her. “We don’t take cash.” Not, “We don’t take $50s.” No cash. Period.

“What?” Ms. Bryant asked.

The cashier patiently explained. Credit and debit cards were fine, as was the easy-to-download Dig Inn phone app. But the almighty dollar was powerless.

“I’ve never experienced that before,” said Ms. Bryant, 20, an assistant to a designer. “I guess we’re in new times.”

Indeed. Cashless businesses were once an isolated phenomenon, but now, similarly jarring experiences can be had across the street at Sweetgreen, or two blocks up at Two Forks, or next door to Two Forks at Dos Toros, or over on 41st Street at Bluestone Lane coffee. In Midtown and some other neighborhoods across New York City, cashless is fast on its way to becoming normal.

But it is not quite normal yet. So the cashier at Dig Inn cut Ms. Bryant a break.

“Just this one time, we’ll give it to you on the house,” she said, handing over the bag. “But just so you know, in the future.”

Ah, the future. In the future, when dollar bills are found only in museum display cases, we will look back on this moment of transition and confusion with the same head-shaking smile with which we regard customs on the Isle of Yap in Micronesia, where giant stone discs are still accepted as paymentfor particularly big-ticket items.

Some people already live in this cashless future. They find nothing strange about paying for a pack of gum with a swipe of a card. If you are one of these people and you are still somehow reading this article, you may be thinking, “What on earth is the big deal?”

At Two Forks on 40th Street, where the lunch offerings have cheery names like Squash Goals, Kristin Junco, a 34-year-old auditor for the state Education Department, said she had not used cash for about a week and much prefers a cashless establishment to its opposite. “We travel a lot for work,” she said, gesturing to a colleague, “and if they don’t take credit cards that makes things difficult.”

On the other side are those who were raised to equate credit card spending with taking on debt — something to be avoided whenever possible, and reserved in any case for major expenditures. Those people do things like grab a $5 bill from their purse and run down from their office to the place on the corner thinking that they can buy a snack with it. They will catch on eventually.

“I was shocked,” said David, a 66-year-old accountant who popped into Dig Inn for lunch a few hours before Ms. Bryant. (He declined to give his surname because “I’m a private person.”) “This is very unusual to me.”

Tim McLoughlin, 59, a writer in Brooklyn, did a double-take when he walked into a Bluestone Lane branch in Dumbo, Brooklyn. “My reaction was ‘Jesus, a New York City restaurant that records all its revenue? How can they stay in business?’ ”

They can, and do. At Pokee, a poke-salad place in Greenwich Village, cash is treated like a quarantinable substance. “If you have exact change, we’ll take it,” said the woman behind the counter. “We give it to the manager and he puts it in a safe. Because we don’t have a register.”

Not surprisingly, the credit card companies, who make a commission on every credit card purchase, applaud the trend. Visa recently offered select merchants a $10,000 reward for depriving customers of their right to pay by the method of their choice. A Visa executive described this practice to CNN as offering shoppers “freedom from carrying cash.”

This freedom is good for the consumer, good for business, and good for the planet, the new breed of eateries insist.

At Dos Toros, a Mexican chain that is in the process of going cashless at its 13 New York City locations, the co-chief executive Leo Kremer said that cash took up precious time: the time of the general manager of the location, who spent a couple of hours a day counting (and recounting) cash drawers that could have been spent coaching new employees and making sure customers have a great experience. “There’s something fundamentally demoralizing when you have the leader of the restaurant back in the office, counting, instead of out on the floor,” he said. And it took up the time of the customer: Cash causes bottlenecks at the register, he said.

“Every day I have an argument with somebody about it,” said a cashier at the Dos Toros on 40th Street, who said she could not give her name because she was not authorized to speak without permission from the company. “I don’t make these rules, you know.”

Critics have noted that the practice also excludes the unbanked, though, at least so far, the places going cashless are sufficiently expensive ($3 for a coffee, $8 and up for lunch) that the prices alone will turn off most people who lack a bank account.

But wait, how is this even allowed? Doesn’t the dollar bill say it’s “legal tender for all debts, public and private”? The Federal Reserve’s website says that notwithstanding that language, there is no federal law compelling a business “to accept currency or coins as payment for goods or services.”

Asked why the $8.71 a customer owes for that Turmeric Sweet Potato Hummus Toast she just ordered is not considered a debt, the Federal Reserve offered a partial explanation, but it begins with the words “for purposes of illustration, and not for attribution to the Fed,” so we cannot share the rest. But a professor at the New York University School of Law who teaches contract and commercial law, Clayton Gillette, laid it out.

First of all, he said, you do not have a debt until after you receive a good or a service. What about at a sit-down restaurant, where you pay after you eat? “Assuming the restaurant lets you know up front that they don’t take cash, they’re offering to serve you a meal, but they are offering it on their terms,” Professor Gillette said. “If you consume the meal, you’ve accepted the terms of the contract.”

Still, occasionally, the Luddites win. A couple of weeks ago, Lisa Gaytan, 60, and a friend walked into a Van Leeuwen Artisan Ice Cream store in Boerum Hill, Brooklyn. Her friend ordered a vegan chocolate cone. He was told he could not pay with cash. He handed over his credit card. There was a problem with the card reader, or maybe the Wi-Fi. In any case, the machine was down. The cashier apologized and said the ice cream was on the house.

“My thought was, sometimes the analog world works better than the digital,” Ms. Gaytan said. “We both walked out of there saying ‘That was crazy.’ ”