“Cash? Not in my salon!” – A hairdresser breaks with tradition

The interview with Michael Bredtmann

Since the advent of coronavirus, our awareness of contactless and cashless payment has changed noticeably.
We now pay digitally in many places – from bread rolls at the bakery to haircuts at the hairdresser.
But how does it feel to run a business that completely dispenses with physical money?

What prompted you to switch to cashless payment?

Our hairdressing industry is known for generating black money. Recently, the tax office has been able to carry out spontaneous checks (cash register inspections) to see whether everything is above board. As we kept having small discrepancies in the cash register due to operating errors, I decided to do away with cash. As we only had 20% cash transactions, it wasn’t that difficult. This puts us on the safe side when the tax office checks us, as we can no longer generate black money! I also love paying privately with my smartwatch as it’s very practical and secure! On top of that, it saves us time when it comes to closing out the cash register in the evening. It saves us about 15 minutes a day. That’s almost a whole working day a month for an employee that we save.

Would you say that your customers have taken this rather well or badly?

We have experienced very mixed reactions. For the most part, the reactions have been very positive. Then there are customers who are afraid of total control and refuse to pay cashless. We have even had individual customers who have threatened us that we would have to accept cash. However, this is not the case as long as it is defined in the terms and conditions. The conspiracy theories of some cash enthusiasts are sometimes exhausting…

Is it really possible to run a company completely without cash?

It’s easier from the revenue side. Sometimes there are customers who don’t have a card with them. Children are also a bit of a problem. We solve this by offering vouchers that parents can buy in advance. However, this is a little inconvenient. The problem arises when we want to go shopping. As we no longer have any cash ourselves, we have to pay with a debit card. Our bank has not yet found a suitable solution for how we as a company can make completely cashless purchases. We are currently using a second card belonging to our boss, but this is not ideal.

What about the people who are hanging on to their cash? Can they no longer come to you?

We do without these customers. We have noticed that some wives from industries known for black money try to “launder” their black money with us. Unfortunately, we lose these customers. They are often the ones who make the most fuss.

Would you recommend the switch to other companies?

Hairdressing businesses in any case! I believe that the tax authorities will carry out very strict spot checks in future. Without cash, I feel more reassured as we are no longer the focus of the authorities. Another advantage is that cashless payments allow us to demonstrate publicly that we are a tax-compliant business. The strong presence of the mafia and clans with their money laundering activities is particularly noticeable here in Wuppertal. It’s really amazing what’s going on in our city at the moment. And that worries me. Card payments therefore stand for honesty! Another plus point: my employees are over the moon about the time saved. We have much less stress at the till. Many thanks to Mr. Bredtmann for the great interview. Please note that the interview took place some time ago.

Advantages of the cashless salon

1. Compliance with the tax office: By dispensing with cash, the company can ensure that there are no inconsistencies in cash management and thus meet the requirements of the tax office.
2. Prevention of black money: The cashless system prevents the generation of black money.
3. Practicality and security: Paying by smartwatch or cell phone is not only practical, but also secure.
4. Time saving: The company saves around 15 minutes a day when closing the cash register. Over the course of a month, this equates to almost an entire working day for one employee.
5. Positive customer reactions: Many customers have reacted positively to the switch.
6. Easier revenue side: It’s easier to process payments without cash, even if there are sometimes customers who don’t have a card with them.
7. Possibility of issuing vouchers: For customers, especially children, who cannot pay in cash, it is possible to purchase vouchers.
8. Strengthening the image of a tax-compliant company: Cashless transactions can convey to the outside world the appearance of a tax-compliant company that is not involved in money laundering activities.
9. Employee satisfaction: The cashless system reduces the stress of managing the cash register and increases employee satisfaction.
10. Distinction from black money activities: The company can clearly distance itself from other sectors in which black money is more common.
11. Demonstration of honesty: Card payments symbolize honesty and transparency.

Overall, cashless payment offers numerous advantages, including both business and image-enhancing aspects.

The challenges of cashless operation

1. Divided customer reactions: While many customers react positively to cashless payment, there is also a group that is against it, for fear of “total control” or for other reasons.
2. Strict customer demands: Some customers have even threatened and demanded that the company continue to accept cash.
3. Conspiracy theories: The company has to deal with conspiracy theories from cash fanatics, which means additional stress and communication effort.
4. Problem with child customers: Children, who naturally do not have their own bank cards, pose a challenge. Although vouchers solve this problem, they are cumbersome.
5. Purchasing challenges: The company is faced with the challenge of making purchases without having cash to hand. The current solution using a second card from the boss is not ideal.
6. Loss of customers: There are customers, particularly from sectors that generate black money, who no longer come to the company because they can no longer “launder” their money there.
7. Dealing with incomprehension and criticism: The company has to deal with customers who do not understand or criticize the switch to a cashless system.
8. Terms and conditions: It must be ensured that the terms and conditions clearly define that no cash payments are accepted in order to be on the safe side legally.

While switching to a cashless system offers many advantages, it also brings with it some specific challenges that need to be taken into account.

Conclusion

The decision of a hairdressing business to switch completely to cashless payments is driven by a variety of reasons. The primary driver is compliance with tax office regulations and the desire to protect against potential disparities and allegations of black money. A side effect of this change is increased efficiency in day-to-day business operations, as the time and effort required for cash reconciliations is significantly reduced. Customer reactions to this change have been mixed. While many welcome the convenience and security of cashless payments, there is also a significant group that is opposed for various reasons, including deep-rooted beliefs and fears. The transition has also brought operational challenges, particularly in relation to shopping without cash and handling young customers who do not yet have their own cards. Despite the mixed reactions and some operational hurdles, the company stands by its decision, especially in light of growing digital trends and the importance of compliance. The switch to cashless payment is not only a symbol of modernity and adaptability, but also a clear sign of honesty and integrity in an industry that is often associated with black money problems.