From a marketing point of view, you are turning customers away! I rarely have cash on me (blame my kids) so really get frustrated when I see a cash only sign. In my local shopping mall, there are two great food areas, the best lunchtime sushi come from one place, and across the space (about twenty metres away) is another sushi place. I choose not to go to the best eatery, but the the other nearly-as-good-but-not-quite place. Why? Because one has a cash only sign, and the other doesn't. If your competition is that close and you don't take cards, but they always have a line, isn't that telling you something??? OK, deep breaths.
The "Upsell" or the counter purchase is more effective when on a card then when using cash. Research shows that people are more impulsive in their quick decision purchases with a card. That extra soy sauce or a sneaky pork bun always tastes better when I just tap, go and don't feel guilty about rooting out extra change. And surely it makes sense to reduce the waiting time at the counter by using tap and go instead of messing around with money and change??
Now, about those surcharges:
According to the RBA the true cost of processing a credit card transaction is usually only around 0.8% of the purchase price for Visa and MasterCard and 1.8% for American Express and Diners Club.
Sorry? 0.8%? So the 50c that I get slugged with on a $4.30 coffee is not just to cover costs? More breaths.
The good news is that The Reserve Bank conducted a review of credit and debit surcharges and my local coffee shop will only be able to pass on the actual cost of the bank fee at some point after September this year.
Ok, lets sum up before I blow a valve! The cost to the merchant is less than 1% when I buy something on my tap and go card. Yes I know there is sometimes a monthly rental of the Card Machine but over a month it can't add too much to that percentage. My philosophy on business is it needs to be as easy as possible for a customer to find you and give you money. So put the 1% down as marketing expenses.
I will continue to avoid shopping from shops and restaurants that have a cash-only policy or charge a surcharge for tap and go on small purchases. Maybe someone will come up with a directory of businesses that don't charge a surcharge?
What are your thoughts?