Taking a Payment Option Away is Tough

15. June 2018.

The burger chain, Shake Shack did a smart thing. They tested the idea of a digital only or no-cash restaurant with a just a few location. They launched the concept late last year where customers ordered their food via a kiosk and paid with a card. And now, the experiment has concluded and the results were made very clear; their customers like to pay for some things, like burgers, with cash, and consumers want all payment options to be available.

Fast-casual burger chain Shake Shack is axing its plans to go cashless after receiving complaints from customers wishing to pay with legal tender. The company will begin adding cashiers at its cashless kiosk restaurants, according to Market Insider, ending a short-lived experiment of only accepting cards some locations.

But diners, it appears, have revolted. “In the first rollout at Astor Place, we did not accept cash at all, and there are people who have told us very clearly ‘we want to pay with cash,’’ Shake Shack CEO Randy Garutti told stock market analysts of the decision. “So in this next phase, we’re going to go ahead and have cashiers as well as kiosks.”

The experiment is understandable. Cash requires handling and has a tendency to disappear at times. Proponents of cashless retail locations believe that by offering only cards as a payment type, ordering and wait times will be decreased. And that may be true, particularly if not having cash as an option, customers stop coming to the store, then those that remain are likely to receive attention more quickly. Perhaps the Shake Shack experiment will save other quick serve restaurants from having to conduct their own experiments with eradicating cash.

Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group

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