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Old 15th September 2020, 11:31 AM   #1
Thermal
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A Stupid Question about the Cash Shortage

In many retail places in NJ, they have claimed that there was first a coin shortage, then a cash shortage due to C19. Googling a little, it seems that it is attributed to people using cards instead of cash.

But that seems backwards to me. People are not hoarding pennies. I don't think. Cash should be making its way back to the banks, who supply vendors, resulting in a glut of cash, not a shortage. Is this Visa poised for an economic takeover?
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Old 15th September 2020, 12:17 PM   #2
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I also don't see people hoarding pennies. I do see people NOT putting cash back into circulation. People aren't walking around with money burning holes in their pockets. They are buying it online and having it delivered. So that 20 in your pocket might still be in your pocket a week later and not turned into a few burgers. All of my cash, and some change, have not ended up in the workplace vending machines since I've not been in the office since … May?
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Old 15th September 2020, 01:01 PM   #3
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Yesterday, I went through the drive-in at a Popeye's chicken place. They only accepted cards. They said they had no cash for change.
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Old 15th September 2020, 01:03 PM   #4
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The only time I regularly see people using cash now is for the same reason I do, when a coin is needed to unlock a supermarket trolley from the rack. In fact, since about April I've been using one of the same two coins I take from a dish near the door when I leave to go shopping.
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Old 15th September 2020, 01:08 PM   #5
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I have the same $100 in my wallet from 2 months ago.
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Old 15th September 2020, 01:15 PM   #6
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My beach town is chock full of vendors running two sets of books and consequently take cash only. It's a nuicance. We need a better class of criminal.
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Old 15th September 2020, 02:33 PM   #7
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I did my part for humanity and turned in about $120 to the coinstar machine. Even donated it to charity!
I did use $10 in cash today when I took a load of trash to the dump.
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Old 15th September 2020, 10:31 PM   #8
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Using cash has pretty much stopped here.
The only places you need a coin still, is when using the wire trollies at the supermarket.

Anything more involving than that, and this includes a simple ice cream cone, is done via contactless or pin.
Even in France (France, I say you!), a single baguette would be bought through contactless payment on the debit card.

Frankly, these days, the only reason to still use more that a few euro's is when it involves tax evading activities.
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Old 15th September 2020, 10:49 PM   #9
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Originally Posted by Thermal View Post
In many retail places in NJ, they have claimed that there was first a coin shortage, then a cash shortage due to C19. Googling a little, it seems that it is attributed to people using cards instead of cash.

But that seems backwards to me. People are not hoarding pennies. I don't think. Cash should be making its way back to the banks, who supply vendors, resulting in a glut of cash, not a shortage. Is this Visa poised for an economic takeover?
The highlighted is the crux of the matter. If vendors are taking more payments electronically then they need less cash so it sits in the bank vaults untouched.
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Old 15th September 2020, 11:09 PM   #10
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You still use coins and notes in American? How quaint.
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Old 15th September 2020, 11:39 PM   #11
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I haven't had much cash on me lately, but the last two restaurants I've gone to had signs up for 5% cash discounts or so. I finally put some cash in my wallet for the next time.
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Old 16th September 2020, 03:07 AM   #12
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Next, after cash is de facto abolished, get ready for negative interest rate policy.
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Old 16th September 2020, 04:57 AM   #13
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Originally Posted by psionl0 View Post
The highlighted is the crux of the matter. If vendors are taking more payments electronically then they need less cash so it sits in the bank vaults untouched.
But that's exactly my point: they still need the cash, but say they can't get it. A coffee/deli convenience store chain in my area was giving free coffee for every $5 in change exchanged, and a $5 sandwich for every $50. They want the cash quite badly.
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Old 16th September 2020, 04:59 AM   #14
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Originally Posted by Lothian View Post
You still use coins and notes in American? How quaint.
Can't get my dealer to take credit yards yet. And re coins; the hookers will affirm I tip poorly
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Old 16th September 2020, 05:07 AM   #15
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Originally Posted by Thermal View Post
But that's exactly my point: they still need the cash, but say they can't get it. A coffee/deli convenience store chain in my area was giving free coffee for every $5 in change exchanged, and a $5 sandwich for every $50. They want the cash quite badly.
So why don't they have a bigger float? All they have to do is withdraw the cash from the bank.
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Old 16th September 2020, 05:12 AM   #16
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Originally Posted by Thermal View Post
My beach town is chock full of vendors running two sets of books and consequently take cash only. It's a nuicance. We need a better class of criminal.
Although the two sets of books are certainly a part of it, many consumers do not understand that the credit card companies charge a couple points on each transaction to the merchant they are making a purchase from.

Visa/Mastercard from two to three percent, and AmEx generally around 5.

A business with low margins can feel the hit of this bill acutely at the end of the month.

Credit cards suck.
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Old 16th September 2020, 05:14 AM   #17
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Originally Posted by Thermal View Post
But that's exactly my point: they still need the cash, but say they can't get it. A coffee/deli convenience store chain in my area was giving free coffee for every $5 in change exchanged, and a $5 sandwich for every $50. They want the cash quite badly.
They wanted the cash quite badly, I would say.
In ye olden days before Covid, the small stores would indeed be more than happy with cash.
If a loaf of bread costs 95 cents, and I pay with 1 euro, they really need those 5 cent coins, for I will not be the only one paying like this.

These days, though?
We pay even a small amount like that with our debit card (contactless or with pin). And thus the need for the shop, or the customer for that case, to have these small coins in stock, disappears.
And I don't think the times of small change, will return after Covid is finally beaten.
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Old 16th September 2020, 05:15 AM   #18
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Originally Posted by Distracted1 View Post
Although the two sets of books are certainly a part of it, many consumers do not understand that the credit card companies charge a couple points on each transaction to the merchant they are making a purchase from.

Visa/Mastercard from two to three percent, and AmEx generally around 5.

A business with low margins can feel the hit of this bill acutely at the end of the month.

Credit cards suck.
That's why debit cards are much better.

Edit:
Debit card transactions have their cost as well, of course.

But cash payments do have their costs as well, albeit that they are more hidden.
Having larger amounts of cash in store, could mean the necessity of having a suitable insurance for that. Bringing the surpluss cash to the bank costs time, if you do it yourself, or money if you let it be collected by a money transport organization. A bank also charges shopowners, when they deposit their cash money. Having larger amounts of cash in your store can also invite robberies.
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Old 16th September 2020, 05:16 AM   #19
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Originally Posted by Thermal View Post
Can't get my dealer to take credit yards yet. And re coins; the hookers will affirm I tip poorly
In the post brexit dystopian disaster that is the UK we have swapped cash for guns. International laws and norms have been left behind and it is grab what you can and run.

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Old 16th September 2020, 05:25 AM   #20
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Originally Posted by Distracted1 View Post
Credit cards suck for businesses
I had to fix that for you. They indeed suck for businesses, but for the consumer, they offer WAY more protection than a debit card. Which, coincidentally, offers NO protection. And in the world of online ordering, you are gambling every time you purchase something with a debit card instead of a credit card.
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Old 16th September 2020, 05:27 AM   #21
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Originally Posted by DuvalHMFIC View Post
I had to fix that for you. They indeed suck for businesses, but for the consumer, they offer WAY more protection than a debit card. Which, coincidentally, offers NO protection. And in the world of online ordering, you are gambling every time you purchase something with a debit card instead of a credit card.
Online ordering sucks as well.
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Old 16th September 2020, 05:29 AM   #22
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Originally Posted by erwinl View Post
That's why debit cards are much better.

Edit:
Debit card transactions have their cost as well, of course.

But cash payments do have their costs as well, albeit that they are more hidden.
Having larger amounts of cash in store, could mean the necessity of having a suitable insurance for that. Bringing the surpluss cash to the bank costs time, if you do it yourself, or money if you let it be collected by a money transport organization. A bank also charges shopowners, when they deposit their cash money. Having larger amounts of cash in your store can also invite robberies.
I don't get charged for depositing cash.
Not denying that it may happen, I have never experienced it in my working life however.

And, as you pointed out, debit cards with a credit card logo (nearly all of them) also charge points to the merchant.
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Old 16th September 2020, 05:36 AM   #23
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Originally Posted by psionl0 View Post
So why don't they have a bigger float? All they have to do is withdraw the cash from the bank.
That's my question. The vendors claim they physically cannot accept cash/provide change because there is a cash shortage. You pose , as I agree, that there is no shortage but that the vendors are artificially creating it.
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Old 16th September 2020, 05:48 AM   #24
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Originally Posted by Thermal View Post
In many retail places in NJ, they have claimed that there was first a coin shortage, then a cash shortage due to C19. Googling a little, it seems that it is attributed to people using cards instead of cash.

But that seems backwards to me. People are not hoarding pennies. I don't think. Cash should be making its way back to the banks, who supply vendors, resulting in a glut of cash, not a shortage. Is this Visa poised for an economic takeover?
The coin shortage makes a little bit of sense to me. An awful lot of people do what I do with coins. At the end of the day, I empty my pockets into a jar. When the jar gets full, I take it to a Coinstar machine. (It used to be a bank, but banks stopped taking coins, or charging a big fee.) These days, though, I don't go to a Coinstar machine. It's a trip out into the world. I don't do those unless compelled to do so. I don't get many coins in my pocket anymore, but none of them go back into circulation.

Other people do things differently. They get coins while doing small transactions at the 7-11 or gas station or Starbucks or Taco Bell, and they use them in vending machines. These days, no vending machines.

Basically, the way that coins get out of your pocket and into circulation are high-contact transactions. You stand at the counter counting out exact change, or you stand at a coinstar machine, or you stand at a vending machine in your workplace. Now, people aren't doing those transactions. If we get coins, we'll take them, but we don't want to be handling that money the way we used to, so they don't go back into circulation.

A cash shortage, though, is something I don't understand. It's one thing to have a jar full of coins. Even my rather large jar ends up having about 150 dollars in it when I go to coinstar. For my economic situation, that's no big deal. If I were getting a lot of bills and not using them, that would add up pretty quickly to a lot of money.
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Old 16th September 2020, 05:52 AM   #25
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Originally Posted by Distracted1 View Post
I don't get charged for depositing cash.
Not denying that it may happen, I have never experienced it in my working life however.

And, as you pointed out, debit cards with a credit card logo (nearly all of them) also charge points to the merchant.
I've looked into what one of the bigger banks here charges business owners for depositing cash.

If you bring it yourself, or if you use a chash transporter (which would have its own fees as well) it costs € 5,00 per deposit and 0,15% over the total worth of the deposited amount of cash.

If you use the deposit machine of the bank, the numbers are € 4 per deposit and 0,25% over the total amount.

This is for businesses at the ING bank (dutch only, but I'm sure Google translate will provide)
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Old 16th September 2020, 06:07 AM   #26
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Originally Posted by Meadmaker View Post
The coin shortage makes a little bit of sense to me. An awful lot of people do what I do with coins. At the end of the day, I empty my pockets into a jar. When the jar gets full, I take it to a Coinstar machine. (It used to be a bank, but banks stopped taking coins, or charging a big fee.) These days, though, I don't go to a Coinstar machine. It's a trip out into the world. I don't do those unless compelled to do so. I don't get many coins in my pocket anymore, but none of them go back into circulation.

Other people do things differently. They get coins while doing small transactions at the 7-11 or gas station or Starbucks or Taco Bell, and they use them in vending machines. These days, no vending machines.

Basically, the way that coins get out of your pocket and into circulation are high-contact transactions. You stand at the counter counting out exact change, or you stand at a coinstar machine, or you stand at a vending machine in your workplace. Now, people aren't doing those transactions. If we get coins, we'll take them, but we don't want to be handling that money the way we used to, so they don't go back into circulation.

A cash shortage, though, is something I don't understand. It's one thing to have a jar full of coins. Even my rather large jar ends up having about 150 dollars in it when I go to coinstar. For my economic situation, that's no big deal. If I were getting a lot of bills and not using them, that would add up pretty quickly to a lot of money.
We have a small tin can filled with coins. There's about 150 euros in there.
But the purpose for that, used to be, to be able to charge power sockets (primarily in Germany), when going on holiday with our motorhome. Occasionally you also need coins for entering some camper places, for the night (Germany and France). Aside from that, I don't have any need for cash money. Not anymore.
Well, there's the 50 cents coin for the trolly in the supermarket of course.
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Old 16th September 2020, 06:17 AM   #27
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I'm wondering if the shortage has to do with the practicality of sanitizing cash and coin? Perhaps banks are limiting disbursements pending fogging them or something?
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Old 16th September 2020, 06:34 AM   #28
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Originally Posted by erwinl View Post
I've looked into what one of the bigger banks here charges business owners for depositing cash.

If you bring it yourself, or if you use a chash transporter (which would have its own fees as well) it costs € 5,00 per deposit and 0,15% over the total worth of the deposited amount of cash.

If you use the deposit machine of the bank, the numbers are € 4 per deposit and 0,25% over the total amount.

This is for businesses at the ING bank (dutch only, but I'm sure Google translate will provide)
What a rip.
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Old 16th September 2020, 06:43 AM   #29
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Originally Posted by erwinl View Post
We have a small tin can filled with coins. There's about 150 euros in there.
But the purpose for that, used to be, to be able to charge power sockets (primarily in Germany), when going on holiday with our motorhome. Occasionally you also need coins for entering some camper places, for the night (Germany and France). Aside from that, I don't have any need for cash money. Not anymore.
Well, there's the 50 cents coin for the trolly in the supermarket of course.
Here in the US, carts are just stacked in the lot and you take one. You rent them or something?
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Old 16th September 2020, 06:50 AM   #30
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Originally Posted by Distracted1 View Post
Although the two sets of books are certainly a part of it, many consumers do not understand that the credit card companies charge a couple points on each transaction to the merchant they are making a purchase from.

Visa/Mastercard from two to three percent, and AmEx generally around 5.

A business with low margins can feel the hit of this bill acutely at the end of the month.

Credit cards suck.
Right, and Paypal whacks the seller for another couple percent. But for a seasonal high-margin gouging merchant, it's just a books hustle.

A big name pizzeria got slammed here a couple years back for ducking taxes. They claimed they were only doing a fraction of the business they actually were. Mr Tax Man sent agents to sit discretely outside the establishment and count customers/purchases. They got popped for seven figures and a prison stay by the time the dust settled.
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Old 16th September 2020, 07:11 AM   #31
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Originally Posted by Distracted1 View Post
I don't get charged for depositing cash.
Not denying that it may happen, I have never experienced it in my working life however.
Banks here charge a 'counting fee' for large cash deposits. Unrelated hustle is a 'service fee' to cash a check if you are not an account holder at that bank.
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Old 16th September 2020, 07:24 AM   #32
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Originally Posted by Thermal View Post
Banks here charge a 'counting fee' for large cash deposits. Unrelated hustle is a 'service fee' to cash a check if you are not an account holder at that bank.
Even when the check is drawn on the very branch one is cashing it at !

Hate banks. Hate plastic. increasingly aggravated by efforts to make opting out of the banking system impossible.
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Old 16th September 2020, 07:24 AM   #33
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Originally Posted by Distracted1 View Post
What a rip.
There I agree.
But it's the reality here.
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Old 16th September 2020, 07:26 AM   #34
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Originally Posted by Thermal View Post
Here in the US, carts are just stacked in the lot and you take one. You rent them or something?
Asking for a 50 cents deposit for the trolly insures that people put them back where they belong (in order to get the 50 cents back) instead of leaving them all over the place.
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Old 16th September 2020, 07:33 AM   #35
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Originally Posted by Thermal View Post
Here in the US, carts are just stacked in the lot and you take one. You rent them or something?
At the local Aldi's here in the suburbs of Detroit, the carts are not put in an ordinary cart corral. They're locked in. To unlock, you put a quarter in the machine, and it unlocks the cart for you. When finished, you return the cart, and it gives you back the quarter.

I don't shop there much, mostly because I don't like the quarters for the shopping cart, so I haven't been there in a few years. I don't remember the exact physical mechanism used to lock and unlock carts, but I guess they imported the system from their German locations.
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Old 16th September 2020, 08:48 AM   #36
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Originally Posted by erwinl View Post
There I agree.
But it's the reality here.
Seems like some bank could bring in tons of business by cutting or eliminating those fees.

Usually the trade-off for not having fees in the US is a minimum balance. On my business checking account there is a $1500 minimum balance and some limit on the number of deposits and transfers (I don't know what it is because I don't have frequent deposits and transfers). But they gave me $500 for signing up for the checking and cc accounts, which easily makes up for carrying that minimum for a few years.
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Old 16th September 2020, 09:11 AM   #37
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Originally Posted by Thermal View Post
I'm wondering if the shortage has to do with the practicality of sanitizing cash and coin? Perhaps banks are limiting disbursements pending fogging them or something?
I thought the science was clear that simply letting things sit for an hour or so was more than sufficient. Only the most paranoid are actually bothering to sanitize their Amazon shipments upon delivery.
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Old 16th September 2020, 09:13 AM   #38
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Originally Posted by Modified View Post
Seems like some bank could bring in tons of business by cutting or eliminating those fees.
A ton of "business". What's the profit to the bank of handling vast quantities of physical money on behalf of their customers, without charging for the service? Seems like it would be better business for the bank to either not offer such a service, or else charge market rates for it.
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Old 16th September 2020, 09:30 AM   #39
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Originally Posted by theprestige View Post
A ton of "business". What's the profit to the bank of handling vast quantities of physical money on behalf of their customers, without charging for the service? Seems like it would be better business for the bank to either not offer such a service, or else charge market rates for it.
Yep, if one doesn't charge for their services one can find lots of customers for those services.

I had a client who moved from a very card heavy business to a very cash heavy business and was ranting about how his bank was trying to charge him for large deposits. I mentioned that this was common and that they also have reporting requirements for deposits over $10,000. He told me that was stupid and he would find a bank that didn't play games like that. Last check he sent me was from the same bank, so I guess that didn't pan out as he thought it would.
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Old 16th September 2020, 09:36 AM   #40
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Originally Posted by erwinl View Post
That's why debit cards are much better.

Edit:
Debit card transactions have their cost as well, of course.

But cash payments do have their costs as well, albeit that they are more hidden.
Having larger amounts of cash in store, could mean the necessity of having a suitable insurance for that. Bringing the surpluss cash to the bank costs time, if you do it yourself, or money if you let it be collected by a money transport organization. A bank also charges shopowners, when they deposit their cash money. Having larger amounts of cash in your store can also invite robberies.
You forgot about the cost of counterfeit bills and the cost of minor shrinkage that can be from honest mistakes made at the cash register.

I have very few clients who deal with lots of cash. It is just too expensive to handle once you get past the size of a two man shop. Most stopped taking checks some time ago, too. The banks just take too long to bounce them and the customers are offended if you tell them you have to wait for it to clear. One bounced check can really screw up your books. Even if you eventually collect in court after paying thousands to attorneys.
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