After five robberies in four months, David Hart, the owner of Park Cafe, has decided to go cash-free. (Kim Hairston/Baltimore Sun video)
After being held up at gunpoint for the fifth time in four months, the Park Cafe & Coffee Bar made a radical change for a business that relies on small transactions.
A sign on the Bolton Hill cafe's door explains: "Due to the recent robberies and continued crime in the neighborhood we are no longer accepting cash."
A day after being robbed Jan. 20, the Park Cafe began only accepting credit and debit payments. Although it began as a temporary measure to ward off robberies, owner David Hart said he now doesn't see the cafe taking cash again.
"Going cashless for me was something that I felt forced into," he said, "and yet now that I've made that decision the feedback from the community has been very positive."
While the Park Cafe gave up cash to prevent crime, more businesses are considering it as a way to save time for employees, keep more accurate transaction records and offer convenience for customers. The salad chain Sweetgreen will go cash-free at locations in Maryland, Virginia and Washington, D.C., in March. Other restaurants in New York, San Francisco and Pittsburgh also have embraced cashless business.
The switch is not without costs. Not only are there merchant fees for debit and credit cards, but many people still rely on cash, particularly those with lower incomes. Yet many retailers and restaurants already see the bulk of their transactions this way.
Kenneth Rogoff, a Harvard University economics and public policy professor, said he expects to see more businesses eliminate cash transactions to improve efficiency and as more younger customers carry less cash in favor of credit and debit cards.
"The technology is getting better, it's getting easier, it's getting more convenient, and people are getting more comfortable paying with credit, so the businesses are just responding," Rogoff said.
Businesses forgoing cash are part of a global shift away from bills and coins as countries reduce their reliance on cash in part to try to control counterfeiting, fraud, money laundering, theft and other crime, he said.
Stores and banks in Denmark, Sweden and Norway have reduced the amount of cash they handle as those countries push to adopt digital payment options. Central banks are reducing the circulation of large bills, which are more likely to be used for money laundering and in crime. For example, the European Central Bank plans to phase out the 500 euro note by 2018, and Australia has established a committee to explore getting rid of its 100 dollar note.
But going cash-free can be especially tough in a city like Baltimore, where 27 percent of the population was unbanked or underbanked, meaning they don't have bank accounts, credit cards or checks, according to a 2015 Federal Deposit Insurance Corp. study. Instead, they rely on cash.
"I think that's why businesses — even businesses that see more and more of their transactions going away from cash — are still going to accept cash," said Greg McBride, chief financial analyst for Bankrate.com.
Hart worries about alienating regular Park Cafe customers he knows don't have access to a credit or debit card.
"They're not on that grid," Hart said. "So those are the folks that are now penalized from enjoying the cafe. Every morning I think about this, but there are ways for us to overcome that."
Hart is trying to find a workaround for them — perhaps offering gift cards, or letting guests run tabs and then billing them at the end of each month. He also plans to add alternative forms of cashless payments, such as Apple Pay or Google Wallet.
Sweetgreen declined to comment on its transition, but its co-founder told The New York Times last year that the switch will speed up customer service and make its employees safer.
A number of Baltimore business owners say they would never turn cash-paying customers away.
Sima Blue estimated that at least 80 percent of purchases made at her Lutherville boutique, Trillium, are made with credit cards. Still, she said she would never consider going cashless because she has customers who prefer to pay with cash or a check, and she wouldn't want to inconvenience them.
"For me, I don't see the advantage," Blue said. "I don't want to stand here and say to a customer, 'Well, we don't accept cash.'"
Going cashless would eliminate trips to the bank to deposit cash, Blue said. And it reduces liability and exposure to theft. But credit cards have their downside too — every time a customer swipes a credit card at Trillium, Blue is charged a processing fee.
"Cash, to me, or a check is really better," Blue said.
At Canton Crossing Wine & Spirits, cash accounts for even fewer sales, about 10 percent. But the store has no plans to phase it out, said Aaron Lubliner-Walters, the store's general manager.
"Cash is great in the sense that we don't have to pay fees on it — more of the money we make in cash is actual profit for us," Lubliner-Walters said. "It's not a dinosaur yet."
At the same time, he said he can understand why Park Cafe would make the change. A cards-only policy could make sense if the shop was experiencing a problem with robberies or counterfeit money, he said.
Aside from fees associated with cashless payments, they have another downside in that they could expose businesses to one-time, big breaches, as opposed to a smaller amount of cash being stolen from the register.
"The scary thing is, if you've been robbed at least you know it," said JP Krahel, an assistant professor of accounting at Loyola University Maryland. "There are businesses that get hacked and don't know about it until months or years later."
Hart said he lost between $300 and $500 during each of the five robberies at the cafe.
Prior to the switch to cashless, Hart estimated 20 percent to 25 percent of his sales were paid in cash. Of the customers who paid with cash, he guessed only 5 percent or 10 percent don't have credit or debit cards.
Bill Wells, a 44-year-old Bolton Hill resident and regular customer at Park Cafe, said making the switch to paying with a card wasn't a problem for him; he usually carries both cash and cards. But he's concerned about what that means for customers who don't have the same access.
"The thing that I worry about is sort of the message that it sends to customers," said Wells, a researcher and nonprofit consultant at the University of Baltimore's Schaefer Center for Public Policy. "With Baltimore, I always worry about the technological divide amongst citizens and what implicitly that says about whether people are welcome or not welcome in a business."
Sea Sloat, 25, a barista at Park Cafe who was present for two of the robberies, said some customers reacted negatively to the switch, but once they hear the reasoning they understand.
Baltimore police arrested Joseph Arthur Dinkins, 36, on Thursday in connection with the Park Cafe robberies and other robberies in the neighborhood. Police Commissioner Kevin Davis stopped by the cafe around 2 p.m. Friday to reassure Hart that a suspect had been caught.
Despite the arrest, Hart said he plans to remain cashless.
But Sloat said she worries about excluding customers by not accepting cash — especially students from Mount Royal Elementary-Middle School across the street.
"There's a lot of children who come in all the time," she said. "They're some of my favorite regulars, and they usually just come for a glass of water, but sometimes they want a cookie, and it would break my heart if we couldn't provide that to them."