By Moses Leos III.
A sign on the front door, “Cash Only,” gives customers the heads up before they walk in Milt’s Pit BBQ in downtown Kyle. Credit cards are not accepted.
Owners Milt Thurlkill and Bunnie Walling have a no-plastic policy. While the change surprised some, both owners agree the switch has been anything but detrimental.
They installed a point-of-sale (POS) credit card system when the restaurant opened in 2008. But the duo soon discovered four to five percent of every sale went to the credit card companies.
| Bunnie Walling, co-owner of Milt’s Pit BBQ in Kyle, accepts payment from a customer during the mid-day lunch rush. After fighting high fees associated with credit card payments, Walling and co-owner Milt Thurlkill chose to only accept cash from their customers. Their success is the inspiration for other businesses to attempt to do the same. (Photos by Moses Leos III) |
Another discovery? They were locked into a four-year lease for the POS system – a stipulation neither realized when they signed up for the service.
According to Walling, the company was hemorrhaging $600 to $800 per month on credit card fees. That was on top of the $47 monthly fee for the POS system. Thurlkill said Milt’s soon paid more on fees than rent.
“For a small mom and pop business, that’s our profit,” Walling said. “The bank told us that (installing a POS) is what we needed to do.”
In 2011, they made the change; it was not without naysayers.
Walling and Thurlkill heard all about the possible detriments of going cash only, including a loss of business.
Both say that hasn’t happened.
Instead, Walling said, their business doubled.
Helping is an in-store ATM. Walling said she negotiated a low fee for customers who use the cash machine. And Milt’s, she said, “doesn’t make a nickel off of the ATM.”
Wait times were also no longer an issue.
“When you run a credit card machine, it sometimes creates a backup,” Thurlkill said. “We like to get our customers in and out as soon as possible.”
However, that doesn’t stop the occasional angry outburst, which happens about once a week. Most customers, though, are fine with it.
“Some people have an attitude because they are used to credit cards,” Walling said. “It’s kind of upsetting when they get upset at my [employees]. It’s my prerogative [to go cash only]. It’s my choice.”
Milt’s cash-only success was an inspiration for Glenda Tyner, owner of Chill-Out Yogurt Shop in Kyle.
While she said she can’t go card-free, Tyner asks customers to pay cash for purchases less than five dollars.
She had a POS in place when she opened in 2011. But she soon discovered the cost: three percent for each card swipe, four percent for reward cards. The highest fees were American Express, which charged as much as 11 percent.
She said her shop spent roughly $700 to $800 a month on credit card fees.
“Our fees were 10 to 11 percent of our sales,” Tyner said.
But she believes in “never turning down a sale” which keeps her from completely ditching the POS.
The tipping point came last year. Tyner was notified that purchases under five dollars would incur a five percent penalty – that’s above the normal card fees.
Instead of passing the buck to her customers, Tyner chose another route – limiting credit card use.
She did so by selling gift cards. Tyner said customers use plastic to purchase five to $20 dollars worth of gift cards, negating the penalty fees.
Tyner lauded Milt’s and other businesses that only take greenbacks, saying they “save themselves a lot of money.”
Her own solutions made some impact, but not a significant one.
“Unless you’ve been in business, you don’t understand how these credit card companies work,” she said. “It’s hard for small businesses to make it with those additional fees.”
Could going to cash-only work for all businesses?
Walling said it depends on the business. However, she said a business can do it if it’s feasible.
“We are standing strong with our cash-only business,” she said. “We are not going to change back.”
