Just had some food at an Asian restaurant in the CBD, and they offered 5% off the bill on cash payment. Why?
As I remember, only Asian restaurants did that.
Why Are Some Restaurants Offering Discounts if The Bill Is Paid by Cash?
nignucial on 18/08/2019 - 18:26
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The local laksa place in our area is cash only with an ATM conveniently next to the counter - the place is packed 7 days a week and would be turning over 25K+ a week … surely running two books.
The government robs you so you must rob the government back
They can't charge "excessive fees" for using CC, but to get around this they offer 5% discount using cash instead, which is equivalent to 5.26% CC surcharge. I really hate businesses that do this kind of dodgy practice, they should be reported and hopefully get fined. It's the same as 50c fee if you pay by credit card for amount < $10. That's like 10% for $5 item.
only Asian restaurants did that
There's your answer.
It's so that they can pocket it as a cash sale and not report it, so they don't have to pay tax on it.
If you ever see a cafe/restaurant that is "cash only" it's because of exactly this.
They get $200,000 in revenue but only report $100,000 to the ATO, so they are effectively not paying tax on $100,000.
Also, seems wayyyy too easy to do, and wayyyyy too hard to detect.
Would be very difficult to prove restaurant made, for example $2,000 last week, when they reported it as $1,000. I can't imagine how they could easily catch them really, if they don't keep books showing the tax evasion and the average basic cash register doesn't save this type of thing, as far as I know.
ATO could say that they had higher than reported income, but proving it would be quite hard.
A popular Thai restaurant in Melbourne CBD very visibly advertises their credit card processing fees when you walk in which will get added onto your bill at the end, around 1% depending on which type of card it is.
What's interesting is when you get to the till, they then offer 5% discount for paying in cash. So since they haven't added the card processing fees on yet, you can tell that the 5% off has nothing to do with card processing and more to do with the other benifits of cash transactions…
Sounds like a very nauthai restaurant.
It's just another way of charging a 5% "credit car processing fee" which is illegal. But yeah, to avoid tax………..
Because many of them pay cash in hand and need the cash. Also to keep the BAS down. A few nail shops I know only want cash and one will only accept cash on Sundays. And those cheap $2 shops have started asking ‘do you want a receipt’ before they ring anything up. If you say no, they just no sale the till.