Why cash is no longer king

Penalties for paying with cash or cheque are being dressed up as

a convenience for the consumer. But who really benefits?

Food is the one big essential that can still be bought for cash withou t penalty , bu t at least one London
resturant has a non-cash policy . Photograph: Alam y

Can you remember what you were doing at 13:03.57 on Friday 28 October 2011?
Perhaps you were queuing to withdraw cash from an ATM machine, for that was the
single busiest second in the Link network's 25-year history, with 482 transactions made
simultaneously nationwide.
Economic austerity has prompted a resurgence of the bank note, as squeezed households
try to keep on top of their finances. In 2011 an extra 5.5bn was withdrawn from cash
machines, according to figures from the Payment Council, the first increase since 2008.
And yet, as our fondness for hard cash grows, there are fewer places where we can
flaunt it. The Post Office is the only broadband provider that allows customers to pay in
cash without incurring financial penalties, and some will not accept cash at all. Orange,
which makes no provision for cash payments, claims its intransigence is for the
convenience of its customers.
Utility companies are notorious for penalising customers who either can't or won't fill
their coffers with direct debit payments. Extortionate premiums on prepayment meters,
mostly used by the poorest households, were outlawed in 2010, but customers who
settle their bills by cash or cheque are charged up to 100 a year more than direct debit
conformists.
Research for the Channel 4 programme Dispatches found that anyone attempting to pay
for a holiday by cash or cheque could see their bill increase by up to 400 and, on
arrival, there's no point waving a wad of notes at a car rental desk: the majority of UK

rental firms only accept plastic. The corporate line is that the policy protects the
customer from the dangers of hauling large bags of swag round airport arrivals to fund
the rental and deposit.
At least passengers on UK airlines, once airborne, can resort to an old-fashioned tenner
to feed and water themselves from the trolley; more than a dozen US airlines have
declared cash-free cabins on domestic flights, prompting an unsuccessful lawsuit against
Continental Airlines, which refused to accept cash from a cardless passenger for a $3 set
of headphones. The passenger had totally failed to appreciate that the ban was for his
own benefit. The widespread policy, says a spokesman for American Airlines with
baffling logic, "simplifies the in-flight transaction process for both customers and flight
attendants".
It is probably only a matter of time before UK airlines also discover the joys of this
simplification. In the meantime, food is the one big essential that can still be bought for
cash without penalty. Or is it? At the bottom of the bill at Shrimpy's, a new London
restaurant, is a warning that cash is not accepted. Is this a moral stand against taxevasion or a simplification of the in-house transaction process? Is it, I wonder fiercely,
the start of a cashless revolution across the hospitality sector? "No, no!" stammers the
bewildered receptionist who picks up the phone. "It's because we don't have a safe."
Amazingly, there is no cap on the penalties that companies can inflict on the cash-reliant
minority, provided the fees are clearly stated and alternative suppliers are available. In
2008 a judge threw out a lawsuit brought by an elderly customer against BT's levies
because the charges were a core term of the contract between the telecoms giant and
the customer.
So what's to be done? Should companies be forced to accept cash? Have you ever been
caught out by a policy like this?
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Comments
41 comments, displaying Oldest

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Stuart Wetton
5 July 2012 1:43PM

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In my case, an insistence on using plastic for my first purchase

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deters me. Unless you can be absolutely sure of the vendor's

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honesty and security, and don't object to being spammed from

now to eternity, I would pay cash until my concerns were
satisfied.
Secondly, for those of us (I am one) who have a limited income it
would be a deterrent as people I know with a basic bank account
merely withdraw their benefit in cash on the day it is paid in.
The winners are the vendors, who gain access to your
details. The losers are the poor.
Same shit, different day.
Lokolo
5 July 2012 1:43PM

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The only time I use cash is in independant sandwich shops.... and

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that's only because they don't have a card machine.

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Paying for car park can be done on card, paying for tips can be
done on card.
I don't like having cash on me anyway, too easy to lose track of
what I've spent where.
stevenjameshyde
5 July 2012 1:44PM

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The caption on the picture reads "at least one restaurant has a

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cash-only policy", while the rest of the atrticle is concerned

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entirely with card-only policies

Also a little googling reveals that the phone number on the
receipt in the picture does not belong to the restaurant that the
article refers to, but I'm sure that Leveson will deal with this
blatant fakery in due course
Chrisp666
5 July 2012 1:44PM
Prepayment metres? Don't you have sub-editors any more?

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fflump
5 July 2012 1:47PM
Extortionate premiums on prepayment metres...
Sack the sub! :-)
matt71
5 July 2012 1:49PM
This country is shit. That's why I left

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mandydog

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5 July 2012 1:49PM

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The airline one was actually introduced for a good reason. NO

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cash = fewer trolley-dolly fiddles and less unofficial booze on

board. I suspect a few others had the same thing in mind.
Lerryn
5 July 2012 1:49PM

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Refusal to accept cash in order to settle accounts for goods and

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services

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certainly appeals to institutions and traders since it rids them of

cash handling
costs. In addition insistence on the use of bank/computer based
products to
settle accounts is welcomed by "big brother" as a means of
information.
However not everyone is either able, or content, to use cheques,
credit cards,
direct debits and standing orders: no doubt numbers will rise
following the
ongoing RBS computer problems! So, in conclusion, I am of the
opinion that
CASH should be made to be a legal acceptable means of payment
for all
goods and services within the UK.
si8bqm
5 July 2012 1:51PM

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Legal tender needs a law to make it illegal to charge penalties or

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refuse to accept it. Otherwise, how long will it be before it

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becomes illegal tender.

However, this move makes payments "off the books" pretty
much impossible. Is the taxman behind all this ?
parttimer
5 July 2012 1:51PM

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Never mind cash being banned - it should be compulsory on

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payments of less than a tenner. Few things are mor irritating

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than queuing while some t0sser at the head of the queue pays for
some gum and a can of Tizer with a card.
luckybear
5 July 2012 1:53PM
Prepayment metres? That's going too far...
[already in the cab]

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damasene
5 July 2012 1:54PM

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Response to stevenjameshyde, 5 July 2012 1:44PM

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You googled the phone number on the receipt in the photo? Are

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you completely mental? I don't think they were trying to claim

that that was a photo of a receipt from the same restaurant they
refer to in the article. I think it's from a stock-image site.

khall54
5 July 2012 1:56PM

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I always pay cash for groceries and anything I buy over a

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counter, including railway tickets, clothes, and anything up to

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100 at eg Argos, because it's convenient and I want to keep the

option open. I'd rather lose 30 pounds than my debit card
anyhow if someone steals my purse - don't take cards out unless
I need them.
However I was bullied into using Direct Debit by the utilities
some years ago - reckon they mostly do it so that however broke
you are, they have first call on your bank account, eg if there is
enough in there to cover the electricity bill and to buy food for
the week, you are expected to starve.
dedicatedtutoneilove
5 July 2012 2:05PM

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. The widespread policy, says a spokesmans baffling logic,

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"simplifies the in-flight transaction process for both customers

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and flight attendants"

OR in otherwords perhaps ; " hey we can make ways for the
workers to hog all the means of any transaction "

Ordinary members of the public in the real world get treated like
roadkill - we're all going to hell in a handcart, it seems to me.
Existangst
5 July 2012 2:06PM

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You try to deposit 10,000 or more cash into a bank and they

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look at you as if you were a criminal.

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Oraea
5 July 2012 2:07PM

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Ive hired a house in the south of Ireland later in the year, I have

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to pay the balance of the rental in cash...... in sterling

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Restrictions paying by cash are one thing....ever tried to pay in

cash to an internet back. Intelligent Finance Im talking about you

.....
Deniski
5 July 2012 2:17PM

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I find it appalling that our opportunities for paying in legal tender

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are being withered away.

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After being ripped off by a bank years ago without repayment or

apology, I decided that cards were not in my interest and have
refused to have one. A few things are more complicated because
of this decision but I sleep easy nonetheless.
As the corruption and exploitation by the banks and financial
firms comes to light; as the common man and woman pays more
and more as income drops; as venality and hypocrisy ooze out of
the political body into the public gaze; I stand astounded at the
pacific acceptance of events that are ripping the humanity out of
our society.
Pay cash, defend society !
DrPlokta
5 July 2012 2:19PM

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If you offer a restaurant cash and they refuse to accept it, you

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can just walk out -- you have paid. An offer of legal tender settles
a debt whether or not it is accepted -- that's what legal tender is.

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If you pay someone up-front, they can refuse cash, but if you're
paying them after you've incurred a debt, they have to accept it.
davefb
5 July 2012 2:19PM
"we dont have a safe"
no probs.. I dont have a card.. Bit late on the bill isn't it?
Mokujin
5 July 2012 2:23PM

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Charging more to pay utilities bills by anything other than direct

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debits is not because of handling costs but because customers

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who pay by direct debit are statistically much more likely to

meet their payments on time.
Kipperphill
5 July 2012 2:31PM
What sensationalist twaddle.
The examples given are:
paying for utilities (of which broadband is probably one) - well
there is an obvious additional cost for the utility companies in you
not paying by direct debit or over the phone - the post office and
banks charge them a lot for allowing people to pay their bills in

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cash
paying for your rented car - this isn't new - they don't like you
paying in cash because it is harder to track you down and/or bill
you more if you damage the car
nothing about shops or restaurants, which is where anyone would
normally pay cash.
JustBeaze
5 July 2012 2:32PM
Having worked in IT security and analysis, I made the very
conscious decision that I would be using cash for as much as

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possible in my life. It's so very easy to build up a profile of

someone from their electronic receipts, and it's so very easy to
buy that information legally. However the information in
question is used almost exclusively for marketing rather than
spotting criminal behaviour or tax avoidance. Big brother is most
definitely watching, but he's more interested in making money
from your details rather shopping you for fraud.
hexyar
5 July 2012 2:37PM

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Response to matt71, 5 July 2012 1:49PM

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Your frustration is understandable but saying this country is shit

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because it is at the forefront of the inevitable demise of paper in

favour of electronic money seems like ranting to me.
I, as opposed to you, came and stayed in this country because
even though the weather is really depressing me, I found that the
opportunities, level of civility and individual's power and rights
are way better than what I was used to in my country of birth.
Have been here 14 years now and no intention of leaving.
A friend of mine who runs his own restaurant moans about
everybody wanting to pay by card. He doesn't like having to pay
for a dedicated phone line and having to pay fees but what he
likes the least is having to declare all his takings.
Was it not for PAYE and electronic money, we'd be like Greece.
People only pay tax because they can't avoid it and then gets all
stroppy when others manage to.
I personally like to pay for everything I can by card. It makes
managing my spread sheet much easier. I account for every
penny in and out of my household.
spainfan
5 July 2012 2:49PM

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Response to stevenjameshyde, 5 July 2012 1:44PM

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I imagine the subs meant to put "at least one restaurant has a
CARD-only policy" since such a restaurant is mentioned in the

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article. But they did it wrong.

earhole
5 July 2012 2:50PM

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In the wake of the Natwest cockup - and the rather murky

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disclosures about both the ethics of the major banks and their

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connections with government - can anyone doubt that a cash free

economy is a really, really bad idea?
Ieuan
5 July 2012 2:50PM

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Went to 'all cash' some years ago. If I haven't got the notes or

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coins in my pocket, I can't spend them. Luckily I live in a country

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where that's the accepted normal (cards are rarely used here).
And if you won't take my cash? No problem, I'll spend it
somewhere else.
(I remeber some years ago trying to buy a CD in San Fransisco
with cash, the shop simply had no way of accepting it. So I didn't
buy the CD).
Kipperphill said: "paying for your rented car - this isn't new they don't like you paying in cash because it is harder to track
you down and/or bill you more if you damage the car"
All the local car hire companies here - Morocco - accept cash (or
they wouldn't have any customers), how come they can manage
and 'first world' countries like the UK and US can't?
oommph
5 July 2012 2:51PM
Response to hexyar, 5 July 2012 2:37PM
Was it not for PAYE and electronic money, we'd be

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like Greece.
To be fair, plenty of countries like Germany remain massively
cash-based as well. I'm paid a fair bit in cash. I pay everything I
can in cash. I rarely use a card payment.
Cash payers are effectively already paying a premium of course.
Part of a card payment is not for the service but goes to the card
provider. Didn't companies like Ikea use to charge a premium for
card payment for that reason?
Tzinti
5 July 2012 2:55PM

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I live in Mexico, where bank fraud is overwhelmingly pervasive,

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even in international banks here. I personally have had 50% of

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my bank balance disappear, and there are many, many other

horror stories. That's why it is actually very unwise to leave

money in your bank account here, because the chances it's going
to go walkies are incredibly high. On the day I'm paid I make any
internet purchases I need, then go straight to the bank and
withdraw everything apart from what I've just used. Having
been extremely poor when living in UK I learned the hard way to
budget extremely efficiently. I even managed to buy a house
here with having no credit card (i.e. no credit history either) and
even though it cost me 1% more in cash down as they obligingly
informed me one week before closing the transaction, it was doable. The only thing which has thus far defeated my cash-only
lifestlye is my intention to hire a car in US, but I have actually
found a low-limit, low-fee occasional-use credit card which is
ideal for me through my mortgage provider, which, if I really
HAVE to give in, is fine with me. With any credit card here, we
have the highest interest rates in the world and again, the
incidence of credit card cloning & fraud is endemic, (and in
Mexico YOU, personally, are responsible for all the money stolen,
NOT the bank) so I have zero interest in anything more. In UK
one takes it for granted one's money is safe in the bank and one
has recourse if anything dodgy happens with a credit card,
whereas actually in other places anything other than using cash
for everything can be courting disaster. Unfortunately.
thisismycreed
5 July 2012 2:58PM
Response to Existangst, 5 July 2012 2:06PM
You try to deposit 10,000 or more cash into a bank

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and they look at you as if you were a criminal.

Well I certainly won't be doing that then
CaptainMurdoch
5 July 2012 3:00PM

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Response to Lokolo, 5 July 2012 1:43PM

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I've always been suspicious of paying tips by card. I prefer

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paying the waiting staff in person as I know they have/will

receive it. Plus I can show my appreciation with a thank you as
well.
lilithingreen
5 July 2012 3:07PM

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only a couple of years ago a good friend of mine couldn't get a

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bank accout. he'd had poor credit history for years, and while all

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debts were now either paid, or being paid (in cash) we really
struggled to find a bank that would give him an account. there
was a stage where we genuinely weren't sure what to do, as his
new employer wouldn't pay him in cash - only into a bank
account, or by cheque - and while there are plenty of landlords
who would take rent in cash, utilities were out of the question.

i can see plenty of perfectly sensible reasons for this march

towards electronic money, but for those who have been locked
out of the financial market (if that's what you call it) due to
poverty and endebtedness surely this isa really worrying trend?
Jimjimjeroo
5 July 2012 3:15PM
Response to earhole, 5 July 2012 2:50PM
In the wake of the Natwest cockup ... can anyone

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doubt that a cash free economy is a really, really bad

idea?
Hear hear, sir.
Not only do I pay cash as often as I possibly can, I keep a good
500 of it at home for these scenarios. While the media are
constantly regurgitating articles claiming that cash is on lifesupport, they hardly mention other occurrences such as that in
Germany at the start of 2011, when one-third of cards could
not be used for about a fortnight due to a (ahem) computer glitch.
IMHO we need more incidents like that, just to give those drippy
"I-buy-chewing-gum-with-a-card" hipsters a proper kick up
their frikkin arses.
WhatsMyPoint
5 July 2012 3:15PM

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Response to damasene, 5 July 2012 1:54PM

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No, no. This conspiracy goes deeper than we first feared! I too

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have taken the time to Google the number on the article's stock
photo (...I know). It leads me to a Little Italy restaurant, indeed
not the non-cash restaurant quoted. And there's more... the kids
menu.... it's 5.95, not 3.99.
New. World. Order.
Run.
LinRichardson
5 July 2012 3:17PM

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How is reducing the payment options available to the customer in

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his or her interest?

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puljon
5 July 2012 3:22PM
Simply not right.

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AllOutPious
5 July 2012 3:22PM

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To take cash as payment should be a legal requirement. Pisses

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me right off that the big banks get to grow fat of just about

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anything these days. Plenty of countries are largely cash based

and they sure as hell aren't doing worse than us.
imjakethepeg
5 July 2012 3:26PM

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Try Soutj African banks, even for personal accounts. They charge

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extra for depositng cash and extra for withdrawing it, and even

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for a balance request. That is why i say they are like prostitutes,
you have to pay to put it in, pay to take it out and even charge
you just to look at it!
JimGriffin
5 July 2012 3:29PM

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Response to Kipperphill, 5 July 2012 2:31PM

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Apart from the restaurant Anna mentions

Trollopean
5 July 2012 3:29PM

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Response to WhatsMyPoint, 5 July 2012 3:15PM

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Kid's menu - Evidence, I think, that the photo was taken some

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time ago and is from a library.

One of my favourite small restaurants in Paris does not accept
credit cards - settlement by cheque or in cash required. Some
restaurants here accept cheques only from clients they know.
Apart from utilities, most department stores and businesses I've
dealt with in France seem happy with cash, cheques or credit
cards.
tiresiae
5 July 2012 3:30PM
I didn't have any trouble making payments during the Natwest
problems. Anyone who did would have had just the same trouble
taking money out of a cash machine, so it doesn't really work as
an argument - unless you want to go back to, what, everyone
gets paid in cash and then you all do your tax returns at the end
of the year?
Nah.
And frankly paying for a handful of groceries with a card takes no
longer than fumbling about for change, whether I'm doing it or
the cashier is when I've paid with my mandatory tenner that I
apparently have to carry around in order to show the bankers
what's what.

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tiresiae
5 July 2012 3:31PM

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And it should be pretty obvious why utilities etc. prefer card or

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bank payments - because it can be automated and doesn't

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require human admin to count it out and accept the payment.

Like it or not, that means paying someone to accept the cash and
so incurs fees.

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