Cash-only businesses shun digital age

Sunday, Dec. 3, 2017 4:17 PM
The Hair After, a salon in Durango, has been open for seven years and accepts only cash and checks. Owner Lyn D’Andrea said she has no plans to accept credit cards in the future because she is set in her ways.

RGP's Flame Grilled Wraps, a longstanding business in the Main Mall, will start to accept credit cards for the first time in its existence.

Owner Jesse DeKrey said the sandwich shop was cash-only for 15 years in an effort to keep the wraps affordable for customers.

He said that over the years, less people are carrying cash, and it became necessary to adapt to changing times in business.

That means paying credit card processing fees, which can be expensive, complicated and overwhelming, driving some small businesses to be cash-only establishments.

“We want to make the buying process as easy as possible for our customers, and possibly bring in younger customers who do not carry cash,” DeKrey said. “That was the justification for us to pay those fees.”

Processing fees vary depending on the industry and size of the merchant but typically range from 2 to 4 percent per transaction, according to Adam Kiefaber, a spokesman for Vantiv.

Vantiv is a payment processing company with an office in Durango. The company processes more than 20 billion payment transactions and approximately $726 billion in volume annually.

“Generally, PIN debit cards are a slightly lower fee, however, they require the merchant to have a pinpad,” Kiefaber said. “The processing fee is typically the same across all major card brands.”

Mary Shepherd, deputy director for the Southwest Colorado Small Business Development Center, said it is feasible for businesses to be cash in the beginning when they are not making large profits.

The SBDC offers consulting, training and resources to start-ups and growth companies including loan proposals, industry research, and marketing and government contracts.

“You can always bring on credit card processing if you feel you need to,” Shepherd said.

She said it is important for businesses to understand their clientele and how they prefer to pay.

“You have to make it convenient for your customers,” Shepherd said.

“How much do you project you will lose, and will that be overriding the savings of not paying credit card processing fees?”

She acknowledged that it is a digital age and most people pay with credit cards, but for some small businesses, those fees can add up.

“It really depends on the size of the purchases because a lot of the time, charges are per transaction,” she said. “So if everyone is making $1 or $2 purchases, it might feel like a larger percentage of their sales.”

The Hair After, 1316 Main Ave., is one business in Durango that does not accept credit cards. Owner Lyn D'Andrea said she has operated salons for 40 years and is set in her ways.

“People spend too much on plastic,” she said. “They tend to spend recklessly if they have that plastic in their hand.”

Despite some customers giving her grief for accepting only cash and checks, D'Andrea said she has no plans to take credit cards in the future.

“There are 10 happy people who come in to that one person who is mad,” she said.

“If technology goes down, where are you? You don't know who is coming in or any of that information. I may be old-fashioned, but I have my appointment book.”