Why Cash Is No Longer King!

by Colin Shaw on August 10, 2017

A Canadian food chain Iq Food Co. is like most of the others. It has an assortment of food choices ranging from snacks to meals and even coffee and tea. But if you want to buy anything at their soon-to-be eleven locations, your money is no good there—quite literally. Iq Food Co. does not take cash.

The restaurant’s founder Alan Bekerman said it was one less thing to think about when he made the decision back in February 2016. Moreover, it sped up service and freed his staff up to focus on other tasks rather than managing cash. Bekerman said his managers feel they have more time to coach employees; a task Bekerman described as “more meaningful” than counting paper.

Cash Isn’t King with Many Retailers These Days

The restaurant isn’t the only retailer that is moving away from cash. Another Canadian restaurant, The Mad Radish is also going cashless. Sweet Green, a salad chain went cashless, except in Massachusetts where refusing cash is illegal. Also, per CBS News, one in five Starbuck transactions is cashless, too, with customers opting instead for the coffee chain’s mobile wallet.

But is it right for Customer Experience? The answer, it seems, depends on your income level, and your desire to eliminate a paper trail for your purchases.

On the one hand, speeding up service and eliminating mundane tasks to free employees up to do other tasks, like coaching their direct reports, seems like it would be a boon to Customer Experience. After all, having what you want faster, particularly food (even if it is healthy) would seem to be a great thing. And if the employee that handles the interaction is more engaging and personable, then, what’s there to get your knickers in a twist about?

Per the CBS New story, at least in the U.S., it ignores a growing segment of the population, the ‘unbanked’, who rely on cash for their purchases. According to the 2015 FDIC National Survey of Unbanked and Underbanked Households, 7% of households in the U.S. do not have a bank account at an insured institution (unbanked), which translates to about nine million households. Also, the survey showed that nearly 20% of U.S. households, around 24.5 million, are what is called, ‘underbanked’. Underbanked describes a household that has a checking and/or a savings account but has found outside resources for banking products, meaning other than financial institutions. So, as you can see, these numbers are hard to ignore, particularly if you are a food chain. If you eliminate over a quarter of the people that can even buy things with you, are you setting yourself up for your best possible success? Also, opponents of the cash-free retail environment bring up the argument that it makes it impossible to eliminate a paper trail from your purchases. For those that prefer more anonymity in their consumer life, the idea of a big brother watching everything you buy and leveraging that information somehow make them uncomfortable. I am sure all of us can remember a time when we had hoped that a charge we had made at a certain store might remain unnoticed. From birthday gifts to treats, sometimes you just want to pay cash to avoid getting caught out.

I Have Seen the Future…And it is Cash Free!

Despite some drawbacks to removing the cash option at many venues, I see a future that is cash free. You can see it already today in Sweden, which has been minimizing its use of cash for years. In the Freakonomics Podcast Why Are We Still Using Cash? the trend to eliminate cash is sweeping Scandinavia and elsewhere in Europe, especially in France and the NetherlandsAsia is following suit, as well, with Singapore’s central bank leaning on commercial banks to do away with cash, and South Korea is striving to be cash-free in the next 2.5 years.

For me, the cash-free future is already a reality. I rarely use cash. I intuitively reach for my American Express card as my subconscious knows where I keep that in my wallet. Of course, I am not one of the un – or underbanked. However, I think the speed of service and the improvement in the experience that results from it, will eventually win over any holdouts that cash is still king. So, what will replace cash? Right now, it looks like digital wallets are taking its place. However, Bitcoin has a shot, too. And for those of you that don’t understand Bitcoin, which I’ll hazard a guess is most of us, here is a handy video to help explain it:

Whether it is a cash-free, digital wallet dominated or a bitcoin future, it is essential that your payment options enhance rather than detract from your Customer Experience. By implementing ways for customers to pay that are win-win, i.e. speedier service for them and hassle-free operations for you, then you will reap the rewards in increased engagement and loyalty with your customers. And we all know that is great news for your bottom line—no matter what type of currency it is made of.

What do you think? Is cashless the future or the frightful decline of the economy? I’d love to hear your opinion in the comments below.

Employee Engagement (No Longer King)

LAST CHANCE to register for our FREE, informative 60-minute webinar, Employee Ambassadorship: Realizing and Optimizing Stakeholder Valueon August 10th, 2017 at 11 am Eastern Time (USA). Beyond Philosophy’s Thought Leadership Principal Michael Lowenstein and I will show you how to build on employee engagement and move it to employee ambassadorship. Space is limited, so please click here to learn more and register today.

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Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of five bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

Colin ShawWhy Cash Is No Longer King!