Why fast food and cashless service are not a winning combination

January 23, 2018

Fast food/quick-service restaurants (QSRs) have been trying to expedite service at windows, counters and tables by going “cashless”—that is, by requesting payment via either debit or credit card. However, a poll conducted by Civic Science and released this month finds that more than one-quarter (26%) of eateries that experiment with this concept could lose money in the process.

In fact, the segment that would turn away from the drive-through first would be the lower-income customers —those who earn less than $25,000 annually—who frequent fast-food outlets.  Of those, 11% would go there less often and 15% would stop going altogether.

“Whether these people don’t have access to credit or debit,  just prefer to pay with cash, or use EBT [electronic benefits transfer] cards, we’d venture to say that moving to cashless would hurt fast food chains,” Civic Science comments.

Independently owned restaurants would suffer the most, with a 34% dip for lost customers and a 29% decrease for those who would patronize them less often.

However, those who use payment cards would continue to frequent the fast-food joints: Civic Science found that 64% of American adults would keep purchasing at the same pace from a cashless QSR, while 10% actually would go more often.

Fast food quick service establishments—McDonald’s,  KFC, Domino’s— would retain the most business, with 29% saying they would patronize the chains more often and 28% saying they would go there just a little less frequently.

Next in terms of retention would be the casual eateries—Olive Guarden, Applebee’s, Denny’s— which would retain customers at a 30% rate but would see less frequent stops from 20%.

Hardly affected at all? Upscale eateries—Capital Grill, McCormick & Schmicks, BRAVO!—would see little change in business.

Research contact: mary@civicscience.com

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