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You're paying the same taxes whether customers pay with cash or CC, aren't you? What am I missing here? I've been to a few restaurants that are cash only. Is t

You're paying the same taxes whether customers pay with cash or CC, aren't you? What am I missing here? I've been to a few restaurants that are cash only. Is that an option for you?

NickC25 3y ago
I'm paying the same taxes, yes, but on top of taxes, I'm paying a cut of each (pre-tax) sale to the CC company or payment processing platform (Stripe, for example, charges 2.3% of each transaction). That cut, while it might seem like pennies to a customer (because in a sense, it literally is roughly a quarter for a given $10 charge) but over time and at scale, those cuts really add up. If my revenue is say, $1m, that's roughly $23k that a CC or payment processor gets right off the bat, so I'm paying taxes on the $1mm but the cut takes a nice hit off my end profits. That $23k would be infinitely more valuable if I could reinvest it in my workforce, my product, my team, or myself. I'm not a restaurant but I am a food service provider. I wish I could go cash-only but that would restrict who I do business with, which at the stage I'm at, is not really an option.
- buzzdenver 3y ago
  IMO the crux of the issue is that CC companies can legally forbid you from charging a different amount for CC vs cash transactions.
  - graywh 3y ago
    https://www.nationalmerchants.com/is-it-legal-to-surcharge-on-credit-cards-your-guide-to-2022-surcharge-laws/ https://www.nationalmerchants.com/is-it-legal-to-surcharge-o...
- PopAlongKid 3y ago
  >If my revenue is say, $1m, that's roughly $23k that a CC or payment processor gets right off the bat, so I'm paying taxes on the $1mm but the cut takes a nice hit off my end profits. If you are talking U.S. income tax, that is incorrect. You are not paying taxes on $1 million, rather you are paying taxes on $977K since the payment processing fees are tax-deductible.
- petre 3y ago
  You could incentivize people to pay cash by giving them a 2.3% discount while raising your prices with the same amount to cover banking comissions.
eigenhombre 3y ago
Increasingly (in Chicago) I've been seeing restaurants and cafes that are credit card- / debit card-only.

You're paying the same taxes whether customers pay with cash or CC, aren't you? What am I missing here? I've been to a few restaurants that are cash only. Is that an option for you?

NickC25 3y ago

I'm paying the same taxes, yes, but on top of taxes, I'm paying a cut of each (pre-tax) sale to the CC company or payment processing platform (Stripe, for example, charges 2.3% of each transaction). That cut, while it might seem like pennies to a customer (because in a sense, it literally is roughly a quarter for a given $10 charge) but over time and at scale, those cuts really add up. If my revenue is say, $1m, that's roughly $23k that a CC or payment processor gets right off the bat, so I'm paying taxes on the $1mm but the cut takes a nice hit off my end profits. That $23k would be infinitely more valuable if I could reinvest it in my workforce, my product, my team, or myself. I'm not a restaurant but I am a food service provider. I wish I could go cash-only but that would restrict who I do business with, which at the stage I'm at, is not really an option.

buzzdenver 3y ago
IMO the crux of the issue is that CC companies can legally forbid you from charging a different amount for CC vs cash transactions.
- graywh 3y ago
  https://www.nationalmerchants.com/is-it-legal-to-surcharge-on-credit-cards-your-guide-to-2022-surcharge-laws/ https://www.nationalmerchants.com/is-it-legal-to-surcharge-o...
PopAlongKid 3y ago
>If my revenue is say, $1m, that's roughly $23k that a CC or payment processor gets right off the bat, so I'm paying taxes on the $1mm but the cut takes a nice hit off my end profits. If you are talking U.S. income tax, that is incorrect. You are not paying taxes on $1 million, rather you are paying taxes on $977K since the payment processing fees are tax-deductible.
petre 3y ago
You could incentivize people to pay cash by giving them a 2.3% discount while raising your prices with the same amount to cover banking comissions.

eigenhombre 3y ago

Increasingly (in Chicago) I've been seeing restaurants and cafes that are credit card- / debit card-only.