Bakers Journal

Cashless Bakeries

January 28, 2021
By Bakers Journal

Considering the options of going cashless

Payment through phones, watches, and chips on debit cards are more popular than ever. Photo: © Rido / adobe stock

Dylan Erlendson, VP of sales for XTM Inc., knows how the food industry is one of the riskiest ventures for an entrepreneur, in terms of profitability. These days, there are risks to accepting cash that go beyond COVID contamination. He spoke of the advantages to going cashless in a Restaurants Canada-sponsored talk.

Erlendson understands that the bakeries are already asking themselves if they can get away with a few less staff working on the floor to reduce expense, are trying to renegotiate with their suppliers, removing fresh fruits and vegetables to promote some cost control on the supplies. He knows some may have already reduced their expenses to the bare bones. Erlendson recommends making changes to the menu or reusing items, or trying to find out where the time is wasted the most, to reduce staff expenses. 

Salaries and wages represent a third of the average café’s expenses. Cash is easy to miscount, and staff can complain they didn’t get the right amount or no tip at all; it can relate to payment disputes. (Managers aren’t supposed to handle cash according to most legislation in Canada.) However there are ways to mitigate the cost of staff without underpaying them or reducing hours. 

When it comes to picking up cash to dispense gratuities or sending cash to the bank, money itself presents the largest expense. Some companies hire an armoured truck company to pick up and deliver cash, an expense few restaurant operators are willing to pay, and some employees find it a dangerous venture to pick up tips and petty cash from the bank, to say nothing of the expense in paying for staff for their time.


Record keeping is a must; Maintain a log that staff has picked up their tips.

Erlendson illustrates one of the biggest time and money wasters as the “Due Back Dilemma,” where servers earn roughly thirty dollars a day in tips from customers who have paid digitally. Unable to sacrifice the time and expense in sparing staff to go to the bank on a daily basis, most businesses wait a week after letting tips accumulate, to reduce banking fees. Due-backs are confirmed; each amount is tallied and handed out in labeled envelopes. Then some accounting is done to reconcile the amounts in tips and the overall sales from the POS. Tracing payments and checking the amounts in the account can take over an hour a week, according to Erlendson. Pair those expenses with travelling to the bank (while incurring banking fees) accounting and doling out the tips another four to five hours. Erlendson makes the argument that an integrated POS system that automatically tallies tips and separates it saves a great deal of time and stress. By his calculations, travel, accounting, and doling out the due-backs can add up to roughly 9 hours a week, and at minimum wage ($18 an hour) cash –based adds up to roughly $648 a month. 

Consider the cost of installation, monthly fees and compare to the amount of money you might be saving

However, anyone considering the addition of a payment platform has to consider the following:

  • Will there always be someone on staff who is familiar with troubleshooting?
  • Will training (and some follow up training when updates are made) be available? 
  • What is the back-up plan if there is mechanical failure? 
  • Does the platform work from websites? Does the bakery have a website that can be maintained daily with updates on social media: If someone on staff for that task? 

If there is high staff turnover, or running a family business, an integrated platform might not be the best choice. However the returns might offer advantages, such as hygiene (no cash to worry about or pinpads to wipe down.) It may save time, but only if there is someone to take care of it.

In all, some platforms offer ways for integrate social media accounts and web sales. If your bakery team has a Communications officer or a staff member who is tech-friendly, and knows whom to call for tech support, adopting an integrated system that allows accounting for petty cash and tips might be an option. 

Features to look for in an integrated system could include: 

  1. Payout for employees gratuities instantly
  2. Reverse option available for payouts, if errors made
  3. Filter and export reports for accounting and reconciliation
  4. Multiple account managers with admin control for each
  5. Master wallet balance
  6. The system should be quick to install and easy to deploy

Venues like Chez Cora and Café Mercatto have adopted systems that are cashless, and accept digital payments like Apple Pay and Google Pay. Erlendson explains, “you have the ability to pay off your rent, your credit card, your phone bill, or a car payment in the app for free, and if you lose a bag full of cash in the back of a taxi or at a parking lot, good luck getting it back.  But, if you were to lose your classic debit card with your cheque money on it, simply go into the app, select ‘suspended card,’ and then go to your employer the next day and scan a QR code of a new classic debit card, and the proxy number would repopulate to the new card.” 

In all, convenience and security does offer safety in protecting bank balances as well as preventing contamination from handling cash, or risking theft by transporting cash. All a bakery owner has to consider are the budget in adopting and maintaining the system.

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