The United States could be on its way to becoming a cashless society a lot sooner than anticipated if more retailers follow Sweetgreen’s example.
Earlier this year, the salad restaurant chain revealed that it was going cashless at some of its locations. The experiment has proven so successful that Sweetgreen now plans to make the practice company-wide.
Starting January 18, all Sweetgreen locations in New York, California, Pennsylvania and Illinois will go cashless. Then in March, the retailer’s locations in Washington, D.C., Maryland and Virginia will also stop accepting cash.
Sweetgreen first tested the idea to reduce wait time for customers, one of the restaurant chain’s customers’ biggest complaints. As cofounder Jonathan Neman explained last summer, going cashless allows his employees to perform 5 to 15 percent more transactions per hour. And the move likely won’t have a negative impact on Sweetgreen’s bottom line; cash payments have plummeted from 40 percent to 10 percent since the restaurant chain opened nine years ago.
In fact, the move may actually improve business, as it may prompt more customers to order via Sweetgreen’s mobile app. In the past year, the retailer’s app use has grown 95 percent. Neman told Fast Company that his company is making an effort to enhance “ASAP ordering” to the point that people ordering through the app will have their salads in six to eight minutes total. From his perspective, the faster people are able to get their food and get out, the better business will be.
Going cashless appears to be a growing trend among fast casual restaurant chains that aim to serve customers healthier options than many of their fast food counterparts. Fast Company noted that quinoa bowl restaurant chain Eatsa, New York-based café Mulberry & Vine and London-based Tossed have all done away with cash payments.
This may have bigger implications for where retail payments could be headed in the future. The millennial generation—which makes up a substantial contingent of the customer base at healthy, fast casual restaurants—largely avoids paying by cash.
The biggest benefit for treasurers
Of course, going cashless eliminates a massive headache for retail treasurers—armored carrier services. Whenever practitioners gather for AFP’s Retail Roundtable, the number one frustration for many of them is dealing with armored car providers. Typically, there are a limited number of services available to retailers, and none of them are particularly good options, treasurers say.
“We have a choice of better pricing and really bad service or worse pricing and really bad service,” said a treasury manager for a sporting goods retailer.
However, retail treasurers need to carefully consider their customer base before testing out going cashless. While Sweetgreen’s customers pay almost entirely by card, that is not the case for many other retailers. So while cutting out cash—and by extension, the ordeal of using armored car services—is an attractive idea, making a drastic move like this has to make sense for the retailer and its unique situation.