The Creeping Classism of Cashlessness
During the COVID-19 pandemic, cashless and contactless payments understandably came into ubiquity. Businesses have adopted these technologies increasingly throughout the past decade, and during the last year, they proved especially useful as many became concerned about evidence that COVID-19 can survive on banknotes. Contactless payment options have provided a much needed safety-first way to keep businesses open at a time when they otherwise would have been shuttered. They have been a lifeline, a port in the storm. Without them, it may have been more challenging for businesses to continue to sell their products and services.
Now, many businesses have the chance to evaluate how they wish to take payments in the future, and I find myself concerned that in some places, cash could be edged out permanently in favour of cashless payments. Getting rid of cash entirely in the hospitality and service sector would be a move tinged with classism, disadvantageous to some customers, and, crucially, service workers who rely upon tips.
I began to realize that the rising ubiquity of cashless payments could edge some people out of certain experiences when I was on holiday in Seattle in 2018. I was visiting a brewery, and queuing to pay for drinks for a group of friends. At the bar, I was told that my dollar bills were no good.
"We don't take cash," the server said, with a nonchalance as though she had just told me that they didn't serve Dom Perignon.
I reached into my purse to retrieve my credit card, and then I stopped, remembering that it had been declined earlier that same afternoon. Despite calling my bank prior to setting off for my trip to let them know that I would be traveling from the UK to the USA, a credit card transaction had still been flagged as 'suspicious', and the card was temporarily blocked. I hadn’t gotten around to calling the bank to sort it out yet and was worried about how much the international call might cost. Plus, who wants to spend a holiday on hold to a bank?
Sheepishly, I returned to my table and explained the situation to my partner and friends, someone picked up the tab with a card, and the situation was resolved. But I kept thinking afterwards about how silly it all seemed, and how the whole thing might have thrown quite a dampener on my afternoon if I was traveling alone. Immediately, I looked back at the ‘cashless’ experiences I’d had back home in the UK which I hadn’t batted an eyelid at and saw them in a new light. I thought about how someone visiting, say, London, without a fancy zero-transaction-fee credit card, might miss out on seeing some of what my fantastic home city had to offer.
Businesses switching to cashless-only transactions might mean well, but this shift could have the unintended consequence of making food and drink experiences more costly - or inaccessible - to some people than ever before. And it’s not just travelers and recent immigrants who would be affected. In the UK, approximately 1.3 million unbanked people are already experiencing elevated fallout from the pandemic, missing out on preferential deals, and also living with price increases due to Brexit. Intentionally or not, the establishments which make cashless transactions the only option are essentially signalling that the underbanked are not valued customers to them.
Although cashless transactions offered a helpful alternative to handling notes and coins for customers and servers alike during the pandemic, the change of rhythm hit some tip economy workers hard. Transactions become a more functional and sterile affair, where speed and safety were prized over chatting and taking the time to provide an extra special service. As such, there were fewer occasions on which servers were likely to be told to ‘keep the change.’ What’s more, the onus fell on hospitality workers to enforce the safety protocols that establishments had put in place, as well as remind customers of local and national COVID-safe guidelines, and the customers who bristled at these changes were less likely to tip. If more transactions stay ‘touchless’ for good, then personality will ebb away from service experiences, and so then will the tips that staff rely on.
During the closures of bars and restaurants, tip economy workers have been more impacted than ever by the unfair system which relies on tips topping up low wages. The furlough scheme placed employees on 80% of their income, but for those who typically receive tips, the take-home pay that they received whilst furloughed was a much smaller fraction of their usual earnings.
Even in pre-pandemic times, tips left as part of a credit or debit card payment did not always work in the employee’s favour. In recent years, a number of restaurants have been criticised for not passing on the full amount of tips left on card to their wait staff, instead placing the money in a ‘tronc’ and diverting it towards another business cost. Politicians have been discussing legislation focused on changing this since at least 2018 and the plans are still in the works, but so far these changes have not materialised. Servers can simply not wait any longer for the government to ensure that they keep their card tips by law.
As the hospitality industry seeks to recover from the damages of the pandemic, it’s critical that businesses consider how their payment processes affect their team members. With many service industry workers struggling financially, now would be the worst possible time to take away the possibility for cash tips all together. And whilst cashless transactions are a great option for the customers who like them, they should remain exactly that: one possible way to pay, and never the only possible way. Instead of killing cash completely, businesses should make sure that there is always a way to take someone's money, even if it’s the old fashioned paper and metal stuff. By keeping cash alive, we can avoid slipping into classist trends as a society, whilst also helping to protect the financial security of the tip economy workers who have already worked so hard to bring the hospitality sector back to life.
