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D.C. café finds credit-only ops are a Snap


The familiar greeting of "Cash or credit?" is no longer a question for restaurant owner Margarita Uricoechea, who nearly10 months ago decided for all her customers that plastic was the way to go.

At the limited-service Snap in Washington, D.C., it doesn't matter if guests are purchasing a $2 bottle of water or an $8 meal, the business only accepts credit or debit cards as forms of payment.

With no signature required on any purchase, Uricoechea said that the transition to a credit-only operation has resulted in a 25-percent to 30-percent increase in sales, as well as a faster table-turnover rate.

"During our first year we broke even on sales," she said, noting that Snap opened on Aug. 1, 2005. "But since then we've been doing much better." The place switched to its credit-only policy in April of 2006.

Uricoechea said she decided to make Snap a credit-only business after taking a trip to Santa Monica, Calif.

"I saw some fancy businesses in Santa Monica that were cash only and I was confused," she said. "I asked some of the owners why they would do that and they said it helps with [fighting] tax evasion. I started thinking, 'If you have several businesses, how do you account for all the cash?' Especially if the restaurants are located in different cities. I thought, 'They should only accept credit'. So I called my attorney and asked, 'Is this a stroke of genius?' My attorney checked and it was legal."

Uricoechea said her policy has several advantages, including less worry for herself. "All the transactions are accounted for now and if I go away somewhere, I don't have to worry about who I'm leaving in charge," she said. "Also, I don't have to be concerned about leaving the restaurant with cash at the end of the night. We close at midnight sometimes and now I don't have to worry about being robbed or leaving the cash in the store and having it broken into."

Uricoechea said she has a sign in the window that says the business only accepts credit cards to deter potential thieves, as well as to alert her customers of the policy before they head to the counter.

"Our clientele has been very accepting of the credit-only policy," Uricoechea said. "Many of them thank me that there's no minimum charge and they don't have to take cash out to buy something. We have a low price point with an average check of about $10 so it's surprising to many people that they can use their debit and credit cards."

The clientele at Snap is primarily young professionals, Uricoechea said, also noting that about 17 percent of business is students and about a quarter are foreigners. "I was surprised because I originally thought our primary demographic would be college kids. We're located right between George Washington University and Georgetown," she said.

Uricoechea credits Snap's upscale clientele to the product she serves. "We have a captive audience with our crepes and bubble tea," she said. "You can't find good crepes anywhere in the area or bubble tea anywhere at all. We offer good food and reasonable prices that draws a sophisticated clientele. And they all have plastic."

Uricoechea noted that many businesses are hesitant to switch to a credit-only policy because of the cost. She said that before the switch, only about one-fourth of Snap's sales were credit. So before imposing the credit-only mandate, she called her bank and asked that her fixed charge to be lowered, especially since her transaction totals were relatively low.

"I got lucky and they switched my transaction charge from 25 cents per transaction to 10 cents per transaction," she added. "So it does cost a little more, but we're confident that our sales will continue to increase and it won't be an issue."

Customers pay for their items at the counter, where their card is swiped and returned to them immediately. "This also relieves some worry for the customer since their card is never out of sight like at full-service restaurants," Uricoechea said, adding that customers place their order and pay, then sit down and are served by employees.

"When we accepted cash, a lot of times we'd get so busy and run out of change," Uricoechea said. "Then I'd have to send someone to the bank and sometimes the bank wouldn't give me what I needed and it would be a pain."

Uricoechea said that she didn't receive any negative feedback for her decision not to accept cash until after Snap started getting press. "After I did some interviews, blogs started popping up all over the place about how I was ridiculous for doing such a thing and criticizing the credit-only policy," she said.

In response to claims that she is discriminating against those who don't have credit or debits cards, Uricoechea said: "We don't have a clientele that would feel discriminated. We don't have the same customers as McDonald-s or 7-Eleven. Like I said before, our clientele is primarily young professionals, and even the younger people who come in always have plastic."

Uricoechea did add that if someone comes in Snap who definitely does not have credit or debit and it upset with her policy, she will take their cash, but reminds them that she doesn't have change.

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