People are carrying cash less often these days, opting instead for plastic cards and digital payments. With the rise of alternatives and the manual work & risk associated with cash, more and more businesses are choosing to go cashless. Let’s explore whether going cashless is right for your salon or spa.
Benefits Of Going Cashless
Speed: Credit, debit, digital, and contactless payments are exponentially faster than cash transactions, which require counting money and change. According to a study by creditcards.com, chip card transactions take approximately 2.5 seconds compared to the 30 or more seconds it takes to complete a cash transaction. Cashless businesses also save time by skipping frequent trips to the bank to make deposits and obtain the proper denominations and change needed for a balanced register.
Accounting: Even with accounting software, cash transactions make bookkeeping difficult since cash is not always counted correctly and needs to be manually recorded. Conversely, plastic and digital transactions can be automatically logged in your accounting software, limiting your menial bookkeeping tasks with automated, accurate records.
Crime: Robbers typically seek out cash businesses when looking for their next target. If you decide to ditch the cash register, your salon or spa will be less appealing to thieves and help keep your establishment safe.
Drawbacks Of Going Cashless
Control: Removing cash from your salon or spa gives you a little less control over your finances. For example, governments can garnish your money if you owe back taxes, banks can freeze your accounts over unpaid fees, and loss of power or internet can prevent you from processing transactions. Having cash gives you access to money even if electronic funds can’t be accessed and provides flexibility in times of need.
Alienating: Last year, cashless payments increased by 97% and are expected to rise. However, there are still consumers who prefer to pay with cash or do not have access to banking or credit accounts. If your salon or spa decides not to accept cash, you stand a chance of alienating potential customers.
What About Tips?
The decreased use of cash and the increased use of digital & plastic payments have an effect on your employees’ tips, which most hairstylists, nail technicians, and spa service providers depend on to supplement their income. For the most part, salon and spa tips have increased with cashless payments as research shows that customers who pay with credit cards tend to tip more than people who pay with cash. However, processors charge a fee for processing these tip payments, and this additional business expense has lead some salons and spas to forbid customers from leaving any tips on their receipts. This paradox is leaving some employees out in the cold.
One solution service providers have found to the tip conundrum are ‘peer-to-peer’ payment apps like Venmo, Cash App, Zelle, and Apple Pay. These apps allow clients to receive tips directly from their clients without any transaction expenses to the employee, client, or salon & spa. If you decide not to allow tips on your clients’ digital and card transactions (although customers prefer to have one transaction related to their service or retail purchase), make sure to discuss these peer-to-peer options with your employees to help avoid any dips in tip income and morale.
Legislation
In light of the rapid increase of cashless businesses, several states are considering or have passed bills that would require businesses like salons and spas to accept cash as a form of payment. Although advocates of cards and mobile device payments argue that they are safer, quicker, and more convenient, critics say cashless businesses discriminate against customers without bank accounts and raise concerns about privacy & data security.
New Jersey and the city of Philadelphia have already passed measures this year that would ban cashless stores, and New York City, Washington, San Francisco, and Chicago are weighing similar bills. As payment types continue to evolve, it’s important that your salon or spa’s business decisions comport with the applicable law in your area, so keep an eye out for similar bills in your city and state.
Conclusion
Whether or not you decide to make your salon or spa cashless, you must be equipped to handle the rapid transition to cashless payments including credit/debit card, mobile, contactless, and digital payments. ProSolutions’ online store and certified payment processor providers can help ensure that you can capture all the cashless payment options customers are coming to expect from a modern business. Click here to learn more.
