Cash only and bank failures possible?

[steve B]

I don't see a major problem unless there's a prolonged outage nationwide. All the critical systems have power backups. So while the ATM or point of sale terminal might be down for lack of power - and in some case the stores have backup power- there won't be much disruption. If it's 100% of the country and lasts a week or more, maybe? But the account info is probably also on servers that aren't US based.

Consider how long parts of Texas were without power, and unless you dealt directly in those areas or lived there, there wasn't much impact at all.


I do see some things shifting gradually to cash.
After years of me resisting using my debit card for anything, (very early on there were fees to use it.) I finally stopped insisting on getting cash. Like going to the bank and writing out a check to cash and cashing it like the olden times ....

As soon as I do though one of my favorite sub shops went back to cash only with a fee charging ATM inside the place.
And during the pandemic, another favorite restaurant went cash only for eat in but still takes cards for pickup. Both said it was because of the processing fees.

[homerunhitter]

Thank you Steve, I appreciate your thoughts on this. I also noticed a few places lately having signs saying "cash only" (but they also have an ATM inside to get cash) and I even saw a restaurant that said on the menu that if you pay cash, the price is cheaper and at my local gas station if you pay cash the price is cheaper.

[bnorth]

Originally Posted by homerunhitter

Thank you Steve, I appreciate your thoughts on this. I also noticed a few places lately having signs saying "cash only" (but they also have an ATM inside to get cash) and I even saw a restaurant that said on the menu that if you pay cash, the price is cheaper and at my local gas station if you pay cash the price is cheaper.

Could be different in different locations. In the location I live in the part I made bold has to be worded as using cash gives you a discount from the normal price. It is illegal to charge more than the normal price for using a card.

Several places I know have a minimum amount for using a card. It is also why most things cheap are now expensive. Too many people buying a $.75 candy bar or soda and nothing else using a card. The store would actually lose money on those transactions so now $.75 items are $2.

[packs]

Stores won’t have money either if there was as severe a banking collapse as you’re imagining and I would think cash at that point would not buy you much. Commodities would be king not useless money.

[homerunhitter]

Thanks guys, I appreciate your thoughts on this. I know a lot of countries are trying to figure out how to disrupt our lifes in the next couple to few years if things don’t change for the better so I’m trying to get ahead of the game and prepare as best I can.

[bnorth]

Originally Posted by homerunhitter

Thanks guys, I appreciate your thoughts on this. I know a lot of countries are trying to figure out how to disrupt our lifes in the next couple to few years if things don’t change for the better so I’m trying to get ahead of the game and prepare as best I can.

Move to a very rural area and hoard food, guns, and bullets. It is the only way to survive. Also hoard silver and gold because the farmers will charge a tariff to use the roads.

[steve B]

Originally Posted by bnorth

Move to a very rural area and hoard food, guns, and bullets. It is the only way to survive. Also hoard silver and gold because the farmers will charge a tariff to use the roads.

If you have hoarded guns and ammo, you will get to use the road for free... one way or another.

Of course, you might not get any food then, unless you grow your own.

[Mark17]

Originally Posted by bnorth

Move to a very rural area and hoard food, guns, and bullets. It is the only way to survive. Also hoard silver and gold because the farmers will charge a tariff to use the roads.

The other big advantage to this is that you're then not dependent on a city water supply, which could run out, be knocked out, or become polluted. Living on a lake and having my own well does give me peace of mind. When solar panels become efficient in Minnesota, I'll add a few of them too.

[steve B]

Originally Posted by bnorth

Could be different in different locations. In the location I live in the part I made bold has to be worded as using cash gives you a discount from the normal price. It is illegal to charge more than the normal price for using a card.

Several places I know have a minimum amount for using a card. It is also why most things cheap are now expensive. Too many people buying a $.75 candy bar or soda and nothing else using a card. The store would actually lose money on those transactions so now $.75 items are $2.

My area has had the "discount for cash" at gas stations for decades. Same thing about the wording, which has always struck me as a big loophole, since there isn't any real difference between a discount for cash and charging more to use a card besides how the signs are worded.

I did once see a place with a discount for cash, with a second sign saying debit cards were not cash, and a third sign saying checks were not cash either.
I wanted to know the story, but it seemed a bit of a sore point, so I didn't ask.

[MooseDog]

Like any other cash-involved business, a huge amount of restaurant cash sales go unreported for tax purposes.

Processing fees for a merchant-based credit card system shouldn't be more than 3% plus maybe a transaction fee of 20-50 cents. That's about a $1-1.50 on a $30 order. If they are paying more than that they are getting robbed by their processor.

Originally Posted by steve B

And during the pandemic, another favorite restaurant went cash only for eat in but still takes cards for pickup. Both said it was because of the processing fees.

[steve B]

Originally Posted by MooseDog

Like any other cash-involved business, a huge amount of restaurant cash sales go unreported for tax purposes.

Processing fees for a merchant-based credit card system shouldn't be more than 3% plus maybe a transaction fee of 20-50 cents. That's about a $1-1.50 on a $30 order. If they are paying more than that they are getting robbed by their processor.

A few places around here went to cash only. They have an ATM inside, which charges a fee, so I figure they're getting a bit of savings, and a bit of the fee.

Eating out at the lower end has gotten expensive.

I figure credit cards are an expense any retail sort of place just has to deal with. The Bike shop was cash only until I had the kid working weekends make notes on what went unbought because we didn't take cards. First day was $400, and we were a tiny place.
The owner got a credit card deal a couple weeks later.
We had a strange setup, I think we may have been the last lace with the old physical forms and slider.
At the time it was weird, we were getting a worse deal than I had just by having Paypal, which I thught was high.
And a monthly fee if we took no card payments that month. Once we got the modern card reader part of my job was to go in once a month during the winter and charge a soda to my card. Cost us more than the Coke, but saved the $35 fee....
Yeah, it was a weird place.