Many small businesses prefer the simplicity of cash only payments. After all, by maintaining a cash only payment policy, there's no headache associated with trying to find a customer for reimbursement after accepting a bad check. There are also no additional fees associated with accepting credit cards.
However, what those merchants may not recognize is that they could be losing business by not offering additional payment options. These days credit and debit cards are almost as common as cash, which means fewer people carry cash with them.
If a customer wanted to purchase an item from you and wasn't carrying any cash, it's highly unlikely that person will head out to find a nearby ATM, withdraw cash and return to your store. In fact, it's far more likely that person will abandon the purchase and buy something from your competitor instead, resulting in you losing a sale.
Rather than risk losing business, here are some reasons why you should expand your payment processing options:
Improved Customer Service
Nothing frustrates a customer more than seeing a "Cash Only" sign posted, especially if they're not carrying any cash with them. The customer is forced to find an ATM and withdraw cash before they're able to do business with you.
Of course, if that person doesn't have sufficient funds in a checking or savings account to withdraw from, they're also not able to access the cash you prefer. The alternative for that customer is to purchase the item they want from your competitors using the credit line available on a credit card.
You have the opportunity to offer better customer service by offering your customers multiple payment options to suit their own preferences. Your customers will appreciate the convenience of having more options available, which results in more sales overall.
Businesses with the capacity to accept a range of payment options tend to experience an increase in sales. Customers who don't carry cash can pay for the things they want with a credit card.
The number of people who now use smartphones to authorize secure payments is also increasing. By incorporating a credit card reader that can read the NFC chips embedded in credit cards and in mobile devices, you instantly increase the payment options available to customers. The result is a boost in sales for your business.
Most cash only businesses operate from a physical location where customers can hand over the folding green notes in person. However, your business opportunities for expanding to an online e-commerce platform are non-existent, as customers can't send you cash over the internet.
By incorporating a secure online payment processing portal on your website, you expand your potential audience to a much broader spectrum than the immediate physical location. You instantly have a way for customers to pay for your merchandise using a credit card without having to leave the convenience of their home.
Reduce Your Risk of Audit
If your business earns the majority of its income in cash, chances are the IRS is far more likely to target you for an audit. The IRS tends to be suspicious of businesses earning predominantly cash, as there is an increased likelihood of the business owner not declaring all of the revenue generated. The result is an increased risk of audit.
By expanding your payment options, you reduce your risk of attracting unwanted attention from the IRS.
It's true that cash is the easiest form of payment, but it may not be the best option for your business.