At the end of the day, business owners say fees associated with credit and debit card payments add up.
With processing fees at 1.5% to 3.5%, a business could see a cost of $1.50 to $3.50 on $100 tab.
“A lot of places will adjust their prices to make up for those fees,” said Erica Colombi, who owns CJ's Public House in Rockford and Sips in the Park in Loves Park with her father, Bobby.
Passing along an expense to customers is something the Colombis have never wanted to do. CJ’s has been a cash-only business since Bobby's father opened it in 1969.
As plastic became more popular, businesses realized they could make more sales, knowing they’d be paid later by credit card companies.
As long as those receipts are paid within a few days, it’s usually not an issue. When they’re not, it can cause bookkeeping problems that aren’t worth the convenience.
“We have always been comfortable not taking on that risk,” Erica Colombi said. “You also have to worry about open tabs, stolen credit cards, someone using someone else’s card and having to chase down money. ... This works out for us. And we pass on the savings to our customers."
Erica added that it’s rare for customers to complain about the way the bar does business.
“Especially when they’re looking at a $7 lunch bill with a $3 beer,” she said. “You can’t beat it. You can’t go to McDonald’s for that.”
The Colombis have an ATM on site — one they own — making it easy to grab cash before bellying up to the bar.
“We keep that fee low as low as possible,” Bobby Colombi said.
Economists say the best way for consumers to prepare for an unsuspected cash-only scenario is to expect them to arise and carry around some money just in case.
Some businesses set minimums for credit card transactions. Others offer incentives for cash purchases.
“It’s just easier sometimes when people pay cash,” said Jerry Simmons, manager of Smokehouse Barbecue in Rockford. “So, if a bill is $15.24, we’d just charge $15, things like that.”
According to the Merchants Payments Coalition, U.S. merchants paid $160.7 billion in credit and debit card fees last year. A decade ago it was $80 billion.
“This rubs people the wrong way more than it does when they find out that we’re cash-only,” Erica Colombi said. “So we’ve just stayed with an old-school mentality here.”
Jim Hagerty covers business, growth and development and other general news topics for the Rockford Register Star. Email him at jhagerty@gannett.com.
This article originally appeared on Rockford Register Star
