[NeoTar]

> making merchants lose ~3% per transaction

Cash also has costs - mistakes in making change, forgeries, time to count/cash up, time to visit banks for cash deposit and/or getting change, theft - it’s been estimated that these can easily exceed any costs of handling credit/debit cards.

[TrueSlacker0]

I run a business with lots of daily transactions. The cost of balancing cash drawers, getting change, making deposits and balancing those activities in accounting, all totalled, is still cheaper than to pay the credit card fees. Also it's kind of a fixed set of time regardless of how much cash it is. So more cash is more savings but there is definitely a point where if the cash amount gets to low it would be cheaper to go all card.

I think that cheaper propaganda is probably from theft in mostly places that hire minimum wage workers and treat them like slaves.

[brg]

Could you elaborate? I have many years experience running a gas station. For five daily’s employees, handlung cash is about 4 hours labor a day. This is counting the till prior and after shift, validating voids and receipts, handling checks, cashiers checks, and bagging and dropping the cash. With cash there is always slippage, and it is never in the ledgers favor. So cash increases labor costs by 10% and incurs about 1% direct loss a day, prior to bank fees. Where as credit cards end up being about a 2.5% overhead.

[arrowsmith]

Wait, you can still pay by check in stores in the US? That was phased out in the UK like 15 years ago. And even before then, I only ever saw old people do it.

The US is weird.

[NeoTar]

I think in part it's because its harder to transfer money between banks in the US - no equivalent of the faster-payments-scheme which allows a free transfer within a few minutes in the UK. Cheques do provide a layer of universal compatibility.

I think its also the reason behind the success of Venmo (and earlier PayPal) to allow for free/very low-cost money transmission.

[blitzar]

It amuses me that venmo / cashapp (multi billion $ innovative startups that reimagined something) simply do what regualar banks do and have done for decades in the rest of the world.

[TrueSlacker0]

I don't have experience with a gas station so mine could be very different. I'm at 1-3 daily employees.

For me it's:

- counting the till pre and post : It takes about 3-5 minutes a till. (money counters are awesome, and I setup all pricing increments to avoid anything below a quarter, which wouldn't be practical for an average gas station. But it could be done down to the nickle or dime) I don't count before and after, just after. The before till should already be done from counting the after and using for a shift the next day.

- validating voids and receipts : it's mostly fully automated via the POS. Maybe 10 mins when something odd happens but it's not common.

- checks and cashier's checks : we get almost zero of these.

- bagging and dropping cash : labeled bags and a drop safe, I don't count until at least the next day, all in one quick go. All the time is in the counting part.

- cash slippage - ours has usually been fairly close. Some times a bit over sometimes a bit under. If its a few dollars off every now and then I don't worry about it. If its consistently off, either way, it signals a problem, usually in training. But every now and then its nefarious and corrected.

So weekly time breakdown is probably:

- counting daily tills : 30-45 mins

- making the change request, deposit and going to the bank, Ill just say 1 hr as the bank is about 10 mins away. I also usually do this when already out for another reason and I usually go only once per week as cash is so low post covid. I used to go 2-3 times a week pre covid. But if we have a large cash day I will make an extra trip so we are not sitting on as much.

- misc accounting etc. : our QuickBooks auto syncs to the POS, with each day's sales recorded and the corresponding expected credit card and and undeposited cash account records created. So when the physical cash deposit is made it with auto match the record already created by the POS and I just click the match button. But other things always can happen in the chain so let's give another 10 min buffer here.

So I'm out 1.75-2ish hrs/week, which actually feels like more than I spend on it. So for quick math for each 10k sold per week at a 2.5% cc rate (ours is higher around 2.8ish). That's $250 in credit card fees. That's About $125/hr to handle the cash vs take the card. Looking up the average gas station sales of about 109k/month that is around $2,725 in fees. So even quadrupling the time I spend that would yield a savings rate of $340/hr spent handling the cash. Seems worth it.

[Two4]

Cash indeed has a high handling cost. In my country and many others, withdrawing cash at the supermarket teller with your card is free (as in no ATM fees) because it reduces the amount of cash handled and transported by branches. They'd rather eat the cost of a card transaction than pay cash handling costs.

[ta1243]

It's been estimated by card companies that these are higher.

[arrowsmith]

Card companies say that cards are better? Who'd have guessed.