Cash is King: Newberg Restaurants Encourage Non-Card Payments

NEWBERG, Ore.—When Miriam Sangabriel and her siblings opened Kopitos Cocina earlier this year, she knew a few adjustments would be necessary from how they ran the Kopitos Food Cart. One immediate change was adding an extra line on receipts labeled “cash price,” listing a slightly lower amount.

“As new business owners, we were trying to save as much money as we could,” Sangabriel said. “The transaction fees are very high, and each year they’re getting higher—it’s difficult to keep up.”

Sangabriel is among a few food service businesses in Newberg that are encouraging or incentivizing customers to pay with cash over credit or debit cards by offering a cash discount, alternatively seen as a credit card fee.

The reason? Card transaction companies like Square, Clover, and Toast charge anywhere from 2% to 3.5% per transaction, with rates sometimes higher depending on factors like transaction type, card used, or input method.

“When you’re talking about a business with slim profit margins—sometimes in single digits—that’s consequential,” said Paul Losch, owner of Ruddick/Wood. “If we can eliminate a piece of that, it’s really helpful.”

In September, Losch introduced a 5% cash discount policy, along with other changes, including a no-tipping policy. Credit card transactions are costly, and services like DoorDash or GrubHub also increase fees. Even manually entering a customer’s card information over the phone incurs a higher fee than swiping a physical card.

“It was as good a time as any,” Losch said. “Prices were going up to accommodate our no-tipping policy, which helps provide our employees with a living wage and insurance, so we wanted to reduce that sticker shock.”

In the first month, Losch noticed a shift. Ruddick/Wood typically processed only $100 in cash sales per week. In the first week of the policy, that figure jumped to $700.

“We had to make multiple bank runs for cash and change,” he said.

That prompted another change—adjusting prices to even numbers to avoid needing small change. Sangabriel implemented a similar policy at Kopitos Cocina.

“Our menu can look a little funny because the prices aren’t round numbers,” Sangabriel said. “But it helps reduce the burden of counting and handling change, and not many people want to carry coins these days.”

Sangabriel noted that cash tips benefit servers more than credit card tips, which are only received with paychecks.

“When I was a single mom starting out in the service industry, having an extra $20 or $30 in my pocket could save the day,” Sangabriel said. “In many cases, our staff uses that cash right away for food or gas.”

Small Transactions, Big Fees

Maureen Rogers, owner of Chapters Books & Coffee, posted a sign at the coffee shop’s register about a year ago, asking customers to consider paying with cash.

“Most people have no idea about the fees associated with credit cards,” Rogers said. “And almost no one knows there’s also a ‘per swipe’ fee. This really hurts small businesses with frequent, small charges.”

For example, Chapters sells a cup of drip coffee for $2.75. For each credit card transaction, approximately $0.07 (2.6%) goes to Square, the processor. On top of that, there’s a $0.10 transaction fee, meaning $0.17 (over 6%) is lost on each cup of coffee paid for by card. Over 50 cups a day, that’s $8.50 in fees—$59.50 a week and around $255 per month.

“Sometimes, we can pay other bills just by saving every transaction fee,” Sangabriel said. “That’s incredible. It’s another bill we can cover just because customers choose cash.”

If a customer refills their coffee for $1 using a card, Chapters pays $0.12 in fees—12% of the transaction.

“Ruddick/Wood and I could both do $300 in sales,” Rogers said. “It might represent two swipes for them, and 37 for me.”

Sangabriel said she sees this frequently at the Kopitos Food Cart.

“If you’re at a bar or restaurant and want to help them, it’s better to open a tab—even if you’re unsure about ordering more,” Sangabriel said. “At a food cart, if you’re planning to order more, ask to keep the tab open. The fees really add up.”

Rogers suggested another way to avoid per-swipe fees: buying a large gift card from a frequent spot and using it for multiple visits. That way, the business only pays one transaction fee for multiple purchases.

Community Response

So far, customers have responded positively, according to Rogers, Sangabriel, and Losch. Many are eager to learn how paying with cash supports local businesses, while others are surprised by the hidden fees involved in card payments.

“Most people love to help once they understand how much it benefits small businesses,” Rogers said. “I always make a big deal of ringing in a cash sale and thanking them for helping us save money.”

Losch said he’s even considered adding an ATM to Ruddick/Wood due to growing interest in paying with cash. He’s also exploring menu options that round prices to even dollar amounts.

“The idea is someone could lay down a $20 bill and pay for their meal or snack with no hassle,” he said. “Because there’s no tip, it’s a clean, easy transaction.”

Sangabriel said customers at Kopitos Cocina have also been quick to adapt.

“I think people are embracing it now,” she said. “They’re coming back with cash, and we really appreciate it. It’s helping the service industry, you know?”