One Theme Park Just Went Cashless. Is Disney Next?
When was the last time you paid cash for something?
Some of you will answer today, while others will pause for a moment before realizing it’s been months.
The reality is that we’re moving toward a cashless society. In fact, we’re in the final stages of the transition.
That’s why a recent story proved so fascinating. A competing theme park just announced it will turn entirely cashless. Is Disney next?
The Realities of Modern Society
I recently had to pay for something with a check, and I froze. I’m a middle-aged man. So, it’s not like I’m unfamiliar with checks.
For most of my life, they were a necessity. However, when this vendor requested a check, I couldn’t even remember where my checkbook was!
My wife went off on a frantic search, knowing that I’d never find it on my own. Thankfully, we found an old but still valid checkbook with about 20 checks in it.
Part of me thought, “I’m screwed when I use that last check.” I felt that way because I don’t even know how to resupply checkbooks now.
However, I quickly ignored that reaction as I realized, “I’ve written three checks in five years.” That checkbook might last me into the 2050s!”
You see, I was one of the earliest adopters of a cashless society. I never liked money as a method of payment, vastly preferring debit and credit cards.
During the past decade, the rest of American society caught up with me. But, in truth, it was the pandemic that proved the tipping point.
By the end of 2020, people had decided that they were over cash. More than 80 percent of Americans prefer credit cards.
Approximately three-quarters of all Americans own and use a credit card. For this reason, only one out of every ten people pays for everything in cash.
Conversely, most people haven’t fully kicked the cash habit, though. Roughly seven out of every eight Americans still use cash at least occasionally.
Ergo, I’m in the minority. I mean, a family member recently paid me back in cash, and I immediately realized I wouldn’t spend that money until an early December hotel stay.
At this point, I use cash almost exclusively for tip money.
The Tipping Point
Speaking of the pandemic, the prolonged closure of several theme parks proved opportune for theme park operators.
For once, they enjoyed an unprecedented chance to reevaluate all park systems.
Executives in this industry want to get leaner, spending less money by trimming the fat.
Disney’s leaders have referenced algorithms they employ to unearth cost-cutting measures.
These strategies could involve anything from cheaper, longer-lasting lights to different bus routes.
Thanks to big data, the company can place literally any part of theme park management under the spotlight to decide how to save money.
Well, Disney’s not the only place doing that. In fact, if we go back to the early years of Disneyland, one of its most bitter rivals has done something bold.
After the park’s founders, Walter and Cordelia, passed away, the family refused to sell to Disney because they harbored a lifelong grudge.
Today, Cedar Fair Entertainment owns and operates Knott’s Berry Farm, and it just made a cataclysmic decision.
As of November 15th, Knott’s Berry Farm will no longer accept cash payments.
Instead, the park will employ a cashless transaction system. Obviously, management understands that people won’t recognize this overnight.
So, during a courtesy period of an undetermined length, Knott’s Berry Farm will host Cash-to-Card kiosks. These will allow guests to load cash onto a kind of debit card.
To enter the park, guests must pay with a credit or debit card or some sort of smart device like Apple Pay or Google Pay.
Knott’s Berry Farm employees will not accept cash as of Monday, instead directing guests to the kiosks.
What’s the Benefit Here?
There’s an obvious benefit and a hidden one. Let’s talk about the latter one first.
Cedar Fair won’t charge guests an exchange fee for converting cash to a credit card.
Knott's Berry Farm is going cashless. Starting November 15, all of our in-park locations will only accept credit cards, debit cards, Apple Pay and Google Pay. It’s faster and always secure. For more information, visit: https://t.co/Ew6g266wDP pic.twitter.com/TkTKoRJJ1l
— Knott's Berry Farm (@knotts) November 10, 2021
However, the vendor will limit the conversion amount from $1 to $500, and cards aren’t refillable.
Let’s say that you spend $100 in cash for a card but have $30 left on it after your trip.
If you forget about this card or lose it, Cedar Fair will start to deduct $3.95 per month after 92 days.
So, the company will make money on forgetful people or those who tend to misplace things. As such, guests should only fill cards to the smallest amount.
Will most of them do that? It remains to be seen. Since I can’t find my keys half the time, I’m guessing Cedar Fair will make some money this way, though.
The obvious benefit stems from reduced staffing and currency-based expenses.
If you’ve ever stood in line while a cashier tries to do the math, you know that some of us take longer than others.
Workers could spend that time being more productive in other areas. By switching to cashless transactions, Cedar Fair eliminates that problem.
Also, theme parks must transport cash to banks. This process actually gets pretty expensive. Those Brinks Truck jokes exist for a reason.
Paying for the secure transfer of money ain’t cheap. By switching to cashless, Knott’s Berry Farm never has to pay for that again.
Several cottage industry expenses stem from cash transactions, not the least of which involves, well, theft.
Tracing digital theft is much easier than counting cash…and more accurate, too.
Will Disney Switch to Cashless Payment?
Absolutely yes. At some point, Disney will switch exclusively to cashless payment.
Will Disney theme parks do this soon? I’m inclined to say no, but Disney has been full of surprises lately. So, I cannot rule out such a move.
Consider the matter from the big picture perspective. Knott’s Berry Farm tracked 4.2 million guests during 2019, the last non-pandemic year.
Disney parks hosted 156 million guests. So, Disney suffers a factor of 57 more expenses from cash-based transactions.
Now, that’s only half the story. Disney similarly pays a set fee for debit and credit card transactions as well.
However, cash is dying as a form of payment. So, its expenses will increase as it becomes less frequently used.
Right now, data suggests that vendors lose 9.1 percent of all cash payments…and it’ll only get worse from here.
Contrast that to 5 percent or less for many forms of cashless payment. If you were running a business, which of those numbers would jump off the page?
You’d pick the cashless payment system and not think twice about it.
Well, that’s the calculus Disney is doing right now.
When is the soonest that the company can save money by switching to cashless payment without alienating some fans?
I suspect Disney will wait until it has time to study the data from Knott’s Berry Farm
Presuming that everything goes well, I’d expect Disney to switch to exclusively cashless payment at its American parks by 2023, 2024 at the latest.