Phil's Cash Manifesto 09/09/2012

The first step in starting a business is figuring out a way to make sure that the amount of money you bring in through the register is larger than the amount of money spent keeping doors open, shelves stocked, AC running, and lights on. At the show I went to in Las Vegas in mid-August, we talked about how a good Point of Sale system, or fancy cash register, can help you manage your business. Most of the systems you see today do a lot more than simply manage the cash drawer. They help track sales history, inventory stock levels, suggest order quantities, and manage account balances. For this post, I want to focus in on the most basic function: accepting payment.

Katie, my wife and business partner, tells me I am a cash geek. I would rather pay for almost anything with cash or check than I would with a credit card. My favorite ATMs are the ones from Bank Of America because if you request two hundred dollars or more, they dispense only five twenty dollar bills and then pairs of fifty dollar bills. My geekiness doesn't stop with actually having a favorite ATM. I love two dollar bills and one dollar coins. In college, my friends would call me "Two Dollar Phil" when I'd put my contribution in for pizza and beer. Having spent time in Central America, I've seen just how truly convenient dollar coins are for both merchants and customers (banks don't like them because they cost more to transport ).


In retail, we try to create as few barriers to purchase as possible. When we purchased the store, we worked hard to made sure we accepted all the major credit and debit cards. We also don't require a signature for small transactions. I won't lie, I want you to give me your money and I'm happy to take it in whatever form you like. We also don't have minimums on card use. If you want to buy ten cents worth of screws with your credit card, then that's fine with us. We're in the process of experimenting with Square and we've been hounding our Point of Sale vendor to help us process NFC payments.

But, like I said, I'm a cash geek. From a business standpoint, there are some negatives. It's obvioiusly a target for theft and a potential liability if mishandled or miscounted. We match up our drawer twice a day and it is usually off by a few cents and even a few dollars sometimes. Plus, to make the business run, it needs to be in the bank. Payroll checks, vendor payments, rent, utilities... all checks going out.

Even with those downsides and inconveniences, here is the reason cash is better for both of us: we are a neighborhood store, locally owned and operated, and we run our banking through a community bank, City First. When you pay me a dollar in cash, I put a dollar into the bank that lends exclusively to local residents and businesses, often with a focus on creating affordable housing. When you pay me with a dollar with credit card, I only get to put 97.5 cents in my bank. that other 2.5 cents goes to some fat cat credit card company. That means I have less money to pay my bills and my bank has less money they can use to lend to others in our community.

If 'shopping local' is important to you, then the first step is patronizing local businesses and being proactive and vocal about how you want that business to serve you. Give us the opportunity to meet your needs. Somewhere down in the list of the other Top 50 steps towards supporting local business is using cash or checks drawn on locally chartered banks to pay for your purchases.

By the way, when you shop with us, please ask for change in two dollar bills and one dollar coins. They really are more fun.

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