Tip Chop: Restaurants Face Losses Of £482 Million In Cashless Society

Restaurants could face losses of more than £482 million in a cashless society, according to a new study from financial analysis experts.

According to the research, two in three (63%) consumers would avoid tipping if they couldn’t use cash, equating to losses of £482,882,037 for restaurants based on a standard 10% tip.

Habitat Cafe in Aberfeldy was forced to go cashless after their local bank branch was closed down. Speaking on their Facebook page about the reduction in tips as a result of contactless payments, they said:

“Contactless cards now make up around 80% of customer payments (at least in our business). They are fast and less bother than chip & pin or cash. Just hover and go. Our customers love contactless.

“Technology has begun to kill the tip. At least with chip & pin, customers had the option to add a tip onto the payment. But with contactless that is not possible, or at least not practical.”

Speaking of the findings, Nigel Frith, senior financial analyst at, said:

“It’s clear that a move to a cashless society is on the cards, as consumers have been encouraged to use cashless payments during the pandemic.

“The net gains of that move could be positive; the ease of digital payments combined with the rise in challenger banks and payment-enabled devices mean it’s a more accessible payment method than ever before. Yet the impact on those in service industries cannot be ignored.

“To move with the times, either the hospitality businesses themselves, or those making use of their services, will need to change their behaviours – either continuing to allow a level of cash payment, or making tips via cashless payment a clearer option.

Clare Bailey is an independent retail analyst and she shared her advice for restaurants to mitigate their losses in light of a cashless society:

“For those businesses who do decide to move to cashless, there are plenty of options. One is to start with the British Independent Retail Association; membership is free at the moment, and they offer lower cost payment options for small businesses.

“There are also the technologies that plug into the bottom of mobile phones that allow card payments, so even retailers without physical stores like market traders can have them. Or for those who are smartphone enabled, you can simply bump phones to take payment using things like Google Pay and Apple Pay.”

“When you talk about tipping, for example, there are forms of contactless tipping. The technology exists and if people move away from cash, those technologies will become more accessible.”