Cash Free On-Board - Open Discussion

[jis]

In India small to medium, and even large business houses have traditionally maintained two sets of accounts, one for presentation to legal authorities and the other for keeping track of the actual accounts. The latter contains all of the information about so called "Black Money" transactions and barters, and is the most closely guarded secret of the company, with very few people having access to it.

Indian Statistical institute does a sample survey every year to try to figure out the extent and the value of transactions taking place in this shady sector, but no one has figured out a way of killing it, since most politicians are upto their necks benefiting from the system. They all talk a good talk about cashless corruption-less etc. etc. but in reality the underground cash/barter economy lives on no matter what happens in the legal world. The tradition is deep and goes back to at least the 10th or 11th century.

 

[OBS]

It seems logical to think that offering payment choices will increase sales, and eliminating modes of payment will reduce sales. But in recommending cashless sales for Amtrak (primarily to reduce theft by Amtrak employees), the IG report noted the experience of the airlines--sales went UP when the airlines went cashless. It makes sense: people have a limited amount of cash on their person, but they can spend up to the credit limit on their cards.

Here's what the IG said:

Amtrak should implement "cashless sales to remove the opportunity to steal cash. Although Amtrak officials have proposed moving to on-board cashless sales, no firm plans exist at this time. Yet there are many benefits to cashless sales, among them reduced inventory and cash losses due to handling errors, theft, and fraud. Cashless sales have been proven to increase revenues through higher individual check amounts and more customer purchases. Such a system would also simplify the LSAs’ work because there would be no need to carry or account for cash.

"Most domestic airlines have implemented in-flight cashless sales. During tests of cashless flights, airlines reported, customers spent more when using charge cards."

https://www.amtrakoig.gov/sites/default/files/reports/on-board_food_and_beverage_6_23_11.pdf

However, Amtrak's clientele is quite often different than Airline's. Also a problem Amtrak has is their CC machines can go for hours on LD trains without an adequate signal to verify credit card sales. You have no idea how many declined sales are left behind from LD trips. Many passengers are using cards that are near/at their limit, and without wifi signal to check, the CC machine keeps churning out sales whether the card is good or not. I can only imagine how many $mil are lost due to this situation....

 

[Mystic River Dragon]

I think cashless sales will be good for Amtrak, but bad for some passengers.

Studies have been done that show that people who pay cash spend less. Also, oddly enough, one study found that people who pay cash value their purchase more and get more enjoyment from it.

I always pay cash for small purchases when I travel because I want to know exactly how much I have each day without thinking of paying it off later. I already try not to buy anything in the cafe car, but if they go cashless, I will make sure to have a meal with me if I'm traveling for a long time during meal hours.

 

[jis]

I am almost certain that someone in the accounting department know the ratio between declined sales to total sales quite accurately. If so it is quite possible to figure out whether the losses are below some3 acceptability threshold or not. If necessary Amtrak could add a Satcom like planes have, for at least the use of company transactions. Amtrak already has Arinc communication for the operations side. Should not be that much more to add a channel for company transactions if the need is felt to be pressing enough. In short it is an entirely solvable problem if it is deemed to be important enough.

 

[zephyr17]

How are café prices listed between Seattle and Vancouver? Are they in US$, CN$ or both?

All cafe items are priced in USD. Canadian bills are accepted at some rate of exchange, and change is given in USD. Canadian coins are not accepted. Remember Canada has no bills under $5, $1 (loonie), and $2 (twoonie) are coins.

 

[zephyr17]

Thanks for posting this. The discussion in this thread seems to have lost track of the very basic truth that you sell more if you make it possible for customers to choose how they prefer to pay you. There will be a cost in lost sales if Amtrak refuses to take cash.

Except for the fact that when the airlines transitioned to a cashless cabin about a decade ago they actually increased revenue. "JetBlue spokesman Bryan Baldwin said average daily onboard revenues nearly doubled the first week after the airline went to plastic in late 2007"; Our onboard sales actually increased when we no longer accepted cash, [said] Midwest spokesman Michael Brophy".

Not a parallel situation. The airlines pretty much went directly from not accepting credit cards onboard to not accepting cash once they got the capability to accept credit cards. Cash on airlines was always problematic, because the flight attendants were dependent on pax having small bills and had a hard time making change. So it makes sense sales soared when the airlines accepted credit card, and avoided the whole "You only have a $10 bill? I'll bring you back change when I get some" hassle.

 

[jebr]

How are café prices listed between Seattle and Vancouver? Are they in US$, CN$ or both?

All cafe items are priced in USD. Canadian bills are accepted at some rate of exchange, and change is given in USD. Canadian coins are not accepted. Remember Canada has no bills under $5, $1 (loonie), and $2 (twoonie) are coins.

When I traveled on it in late September 2017, Canadian bills were accepted at parity to the USD (there was no exchange rate conversion done, and change was given in USD.) It was a good way to clear out a bit of leftover Canadian currency from the trip.

 

[zephyr17]

How are café prices listed between Seattle and Vancouver? Are they in US$, CN$ or both?

All cafe items are priced in USD. Canadian bills are accepted at some rate of exchange, and change is given in USD. Canadian coins are not accepted. Remember Canada has no bills under $5, $1 (loonie), and $2 (twoonie) are coins.

When I traveled on it in late September 2017, Canadian bills were accepted at parity to the USD (there was no exchange rate conversion done, and change was given in USD.) It was a good way to clear out a bit of leftover Canadian currency from the trip.

Hmmm, since I always used USD on the Cascades (I keep any leftover Canadian currency because I go to Canada a lot), I guess I just assumed they imposed some exchange rate.

If the are currently exchanging at par, they are losing money, plus they have to stand exchange costs. CAD is currently .77 USD. Bad business practice to exchange at par.

 

[Anderson]

Unfortunately, the oncoming 'train' of a cashless society can neither be slowed nor halted. The world population will have no choice but to accept it.

<snipped for length>

Those who've known me for a long time know I have an increasingly negative view of technology (frankly to the point that I'd happily throw a switch to kill off IT innovation for the rest of my life...I literally do not want to know what comes next).

I would point out that in a sense, the 'small guy' gets hurt by the tracking of transactions as well insofar as the economy has often operated on /not/ following the rules to the letter. For an example of this, ask anyone overseeing a railroad yard what happens when all of the rules are actually followed. This isn't the only industry that's like this. I actually think there's going to be a negative impact from a lot of this in the long term because of the govenrnment's 'cut' both in terms of time and money (e.g. I honestly do not give a flying frak if my handyman is insured, licensed, or bonded...I care if he fixes my broken toilet; I do not care if my barber is licensed, I care how my hair looks; and I only really care if my doctor is licensed because of how high the stakes are).

Setting aside the EMP threat, there's a real risk of a "Puerto Rico" situation (extended power cuts in an area utterly disabling businesses). After Isabel (in VA in 2003), I didn't get regular power back at my house for close to two weeks. This was mostly bad luck (my neighborhood has generally been pretty good about getting power back after a storm, but IIRC we just had a LOT of tree limbs down and there were other areas with more people that were easier to restore quickly) and I personally had a generator at my house (which we basically killed from overuse as a result...it was quite old at the time), but a power cut for 2-3 days isn't implausible in a lot of areas. If you get beyond that, you start having Problems. If the government was going to pair this push with requirements for a robust power network, that would be one thing, but that's...sort-of lacking. Yes, in the short term (and with trusted customers) you can quick-fix this with simply running a paper register and handling the formal transactions later (or indeed, if there are transactions going both ways just "washing" some of them); outside of situations like that, however, things get hairy quickly.

By the way, you won't eliminate bribes and money laundering. It will just become a bit more complicated. Straight cash under the table becomes a transfer to a 'charity' that in turn pays for the official in question to go on a 'fact finding trip' (or indeed, a lower-income charity that doesn't have to file much paperwork with the IRS and that mostly 'loses' its money). Yes, in theory you can trace it more easily...but it's sort of like trying to beat out a bump in the carpet (the bump tends to just move around). And of course, you can't eliminate barter...so it wouldn't be hard to envision a scenario a la John Wick where you have a not-insignificant number of transactions taking place in specie (which is fundamentally convertable) or in foreign currencies of some sort.

I'm also not convinced that the relevant levels of tracking are anything resembling a good outcome. Yes, there is a "slippery slope" argument here but given various "innovations" I am not sure it is invalid to worry about a shift from "we know where you purchased X" to "we know what you purchased", and I really don't want to be stuck thinking about my health insurance rates every time I just want a burger.

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As to the airlines, I suspect that the revenue increase occurred because (alongside the "making change" issue, which really shouldn't have been an issue most of the time) on shorter flights FAs were now able to actually cover most or all of the cabin.

 

[Walt]

Good idea. If going cashless helps Amtrak reduce costs and makes it possible to meet congressionaly mandated requirements, then we should be all for it ...

Not picking on @Palmland, but I though it was a good branching off point to mention who will pay all the fees? The 2% to 2.5% per transaction fee? The card terminal use fee? The communication fee? The gateway fees? And so on?

IMHO, it would be difficult to Amtrak to justify switching from fee-less cash system, to a fee-laden card system.

Amtrak already pays those base fees since it accepts credit card transactions. Of course the per transaction fee comes in and as DA explained earlier usually that is simply absorbed in higher price for the merchandise, and unless there is a special cash price it is the cash payers who get dinged with extra prices.

If the public is so willing to pay higher prices, why doesn't Amtrak simply raise prices and keep accepting only cash?

 

[jamess]

Nonsense, even public benefits are paid on cards today. You don't need a bank to buy a cash card.

Airlines are private. Amtrak is not.

Removing cash would result in an immediate lawsuit on disparate effect on low income riders and minorities (who are unbanked at much higher levels). Especially for routes where passengers can pay cash on board for their tickets.

If your goal is to cost Amtrak money, then going cash-only is one fine way to get there.

Oh really. Here is what the IRS has to say about taking cash payments for taxes. They charge a fee and I haven't heard of them getting sued.

https://www.irs.gov/payments/pay-with-cash-at-a-retail-partner

Here is what the Federal Reserve says: https://www.federalreserve.gov/faqs/currency_12772.htm

As mentioned by neroden, you can walk into an IRS office and hand over cash, with no fee.

https://www.irs.gov/pub/lanoa/pmta01942_7439.pdf

And from your very own link:

This statute means that all United States money as identified above is a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law which says otherwise.

Amtrak is not a private business.

Then you can go into "debt" and what exactly it means.

It doesn't matter. A disparate effect lawsuit means that a protected group is harmed by a specific policy.

We know for a fact that low income communities are unbanked at higher rates than the overall population.

Ergo, a policy requiring a card has a disparate effect on their ability to use Amtrak.

Open and shut case.

Look at every mass transit system in the country. Philadelphia and Chicago recently implemented the latest technology systems that support contact-less communication like Apple Pay and embedded chips. You can swipe your credit card straight at the turnstile and hop on the subway.

They also splurged for machines that will convert cold hard cash into a fancy contactless ticket.

Why? Because they would have lost a lawsuit had they otherwise not offered this option.

It's a fair guess that virtually every adult on an airplane has a credit or debit card. (Is it even possible to buy an airline ticket with cash anymore?) Not so much on Amtrak.

Yes it is!

Ever wonder how so many travel agencies stay in business? Aside from helping to plan complex trips, they do tons of cash transactions for folks without a card.

And yes, you can board a plane without ID either. Just get there 3+ hours early.

 

[PVD]

Low income in and of itself does not place one into a federally protected class. NYC SBS machines do not take cash.

 

[zephyr17]

Yes, but they do take a MetroCard, and you can get easily a MetroCard for cash.

 

[PVD]

Not at the sbs location. The cash options exist, but don't have to be at all locations.

 

[seat38a]

I had no idea we had so many lawyers on this site. I would have figured otherwise with all the Acela bashing.

 

[jebr]

Look at every mass transit system in the country. Philadelphia and Chicago recently implemented the latest technology systems that support contact-less communication like Apple Pay and embedded chips. You can swipe your credit card straight at the turnstile and hop on the subway.

They also splurged for machines that will convert cold hard cash into a fancy contactless ticket.

Why? Because they would have lost a lawsuit had they otherwise not offered this option.

I highly doubt that the primary reason those ticket machines exist (and especially the reason that the contactless tickets/cards issued by the fare agency exists) is simply because it avoids a potential Title VI lawsuit.

Contactless cards/tickets issued by the fare agency exist because most people don't carry contactless credit/debit cards in their wallet or use Apple Pay/Android Pay/Samsung Pay on a regular basis. I finally have a contactless credit card as of a month ago, and I've had credit cards for a number of years. Contactless just isn't prevalent in most cards issued in the US, and so there needs to be some way for people to convert their non-contactless payment into a contactless form. The easiest (and probably cheapest) way of doing that is to have people purchase contactless cards from the agency and refill them; the agency can process the actual credit card payment less often and at times where transaction time isn't of the essence (thus saving fees and boarding wait time.) It's also easier to have a physical machine to refill the card as not everyone with a card can easily log into a web browser to refill their card right when they need to. Some agencies even go so far as to not need the card to physically talk to the central server, thus not even requiring constant connection to the central office (which would absolutely be required to process payments on board.) Metro Transit in Minneapolis/St. Paul still has their system like this; transactions are processed on the card itself and uploaded to the server when the bus goes into the garage at night. This is despite the fact that most buses have a connection for the real-time tracking system and free customer wi-fi on board.

Once you've made the investment in machines and the backend to issue agency-specific cards (which is required if you want relevancy for most people) it's comparatively trivial to integrate cash refills into that system.

 

[Lonestar648]

Why not have a small machine in the cafe that takes $5, 10, 20 bills and gives out an Amtrak money card that would be read like a credit card or debit card in the scanner used by the Cafe and the Dining Car. The Cash boxes could be changed out when the train arrives in key cities like Chicago, LAX, WAS, NYP, etc. The same person could refill the blank cards. If the cash box is locked, the danger of theft is minimal.

258/

 

[Triley]

How are café prices listed between Seattle and Vancouver? Are they in US$, CN$ or both?

All cafe items are priced in USD. Canadian bills are accepted at some rate of exchange, and change is given in USD. Canadian coins are not accepted. Remember Canada has no bills under $5, $1 (loonie), and $2 (twoonie) are coins.

When I traveled on it in late September 2017, Canadian bills were accepted at parity to the USD (there was no exchange rate conversion done, and change was given in USD.) It was a good way to clear out a bit of leftover Canadian currency from the trip.

There most certainly is an exchange rate, which is calculated by the POS. If the LSA offered you dollar for dollar, then they had the pay the difference between what they took from you and what Amtrak valued that currency as.

 

[Triley]

Why not have a small machine in the cafe that takes $5, 10, 20 bills and gives out an Amtrak money card that would be read like a credit card or debit card in the scanner used by the Cafe and the Dining Car. The Cash boxes could be changed out when the train arrives in key cities like Chicago, LAX, WAS, NYP, etc. The same person could refill the blank cards. If the cash box is locked, the danger of theft is minimal.

258/

I feel like at this point we're in search of a problem so we can provide a solution. If we're already taking cash onboard the train in some fashion, why create another bottleneck and set up a machine somewhere where many passengers are going to have to stop at some point? Who's going to provide troubleshooting for that machine when it eats someone's money? Runs out of cards enroute? The cartridge where the bills go becomes full enroute? Where is the machine going to go, exactly? On the series 6 (older) Talgos, there's no space for it, unless we lose seating in the diner or bistro, and seating in the bistro is already extremely limited. Folks send their kids up with cash all the time because they have to baby sit their other kids, or a pet, etc., and if I've got 20 people in line, I just wouldn't have the time to help someone figure the machine out.

Same thing goes for the Amfleet cafes, except perhaps it's even worse, simply due to the ridership being much higher.

Also, I've heard several stories of vandals breaking in to cars in Sunnyside Yard and stripping everything out of cars. Coffee machines, seat cushions, you name it. Unfortunately, when there's a will, there's a way. And I think having that kind of cash sitting unguarded overnight would make it even more of a target for theft.

Anywho! Until such a time that there is a way that Amtrak can guarantee that the credit card machine can have a constant signal, I don't see cash going away due to the reasons I've already said, as well as what OBS has mentioned. As far as a satellite communication system being put in place just for the credit card machines? We need to picture how many food service cars are out there, and imagine every single one of them would need to be retrofitted with this equipment, which would be extremely expensive, while we can't have funding for actual diner service on three long distance trains now.

 

[caravanman]

Will this mean that one cannot buy a ticket at the station with cash?

While I am not too worried in truth about "Big Brother", I do feel that this slide towards folk being forced to leave an electronic record of their lives for others to use is wrong.

We gave up accepting gold in exchange for a promise that our bits of paper that we use for money will always have value... We should hold to that promise.

The majority of members here seem to be "better off folk", the sleeper users, so I expect that such a change would not affect them, but I guess some at least of the long distance folk in coach would be affected?

I can see the costs benefit to Amtrak of being cashless, but the step is one less convenience for their passengers.

I just flew back from Turkey on a budget airline. They were happy to accept cash for purchases, and at $3.60 for a duff coffee, I can see why!

Ed.

 

[jamess]

Low income in and of itself does not place one into a federally protected class. NYC SBS machines do not take cash.

False, one SBS fare machine at every stop takes cash.

Coins only, but cash.

Again, there's a reason for this.

Good luck finding a government service that doesn't take cash. You'll find that even if a cash option isn't immediately obvious, there is always a way. As someone above mentioned, Amtrak could probably get away with selling Amtrak meal tickets for cash at stations.

 

[rrdude]

This whole cash issue is a potentially politically charged one as people experienced in India, when currency notes with the widest circulation were demonetized one fine night without any prior notice, ostensibly in an effort to smoke out so called "Black Money" held in the form of ill begotten cash. It caused a lot of problem for the generally law abiding citizens, and the holders of the illegitimate cash were mostly able to exchange them for the newly issued substitute currency with a little underground help from their friends in the banks. So at the end of it most of the demonetized cash came back to the government and the holders of the illegitimate cash were mostly none the worse for it. They are now just holding illegitimate new currency cash.

So everyone claimed victory and life goes on. Only the little guy with no friends in banks got screwed. This suggest to me that merely moving away from cash will probably not fix the alleged problem that one is trying to solve, if it is something other than just not having to carry wads of it around in bags that is.

Pushing the entire country towards becoming a cashless society is one of the obsessions of the current government, and this in a country where more than a quarter of the economy is not even fully monetized, i.e. uses cash. There is a rather large "Barter Economy" which shows no sign of going away, let along going to monetized cashless economy.

JIS is correct, won’t “fix” issue, but helps eliminate ONE of the sources of losses

 

[me_little_me]

Actually, in many states there is at least one major bank system available for a no transaction fee withdrawal because the state makes that part of the deal with the issuing bank. Is getting a check and having a check cashing store take a cut, or paying a fee for a low balance checking account any better? Much better when people get robbed for their checks, or their mailboxes get pilfered.

In NC, the State Employees Credit Union has machines all over the state (where do state employees not exist?) and they charge no fee. We have 3 places in our town and all the remaining towns and populated "rural" areas have one or more. Wonderful!

Bitcoin - the legal tender of the Internet and the New Age. Free from political influence, free from national boundaries, free from illegitimate government seizure (which happens on Amtrak all the time).

And so safe to use! NOT! Too easy to scam.

 

[chrsjrcj]

Ive used Bitcoin (and other Crypto) for the last 5 years. Never been scammed.

How many people have had their credit card information stolen from skimmers or compromised (Target)?

 

[jis]

Ive used Bitcoin (and other Crypto) for the last 5 years. Never been scammed.

How many people have had their credit card information stolen from skimmers or compromised (Target)?

It is only a matter of time my friend. There are serious potential issues and problems of technical nature lurking. Ignorance is bliss.