It is possible that they are asking for more money because:
1. few people pay with cash and the company must handle those transactions differently for those few people. This may be seen as an unacceptable inconvenience and may cost the company more in employee training and the handling of the funds
2. customers that pay in cash may have no choice, or may choose to pay in cash on principle
In the second case I am speculating that they may be exploiting a niche population that they believe will pay the higher price. Consider that while some people may choose not to pay in cash due to the higher cost, case 2 accounts for those specific customers that will knowingly pay the higher amount in cash.
That seems plausible. There is a trend happening where businesses are increasingly offering different prices to different customers. The Odd Lots podcast just did an episode about it. One of the more memorable examples discussed was to offer a higher price to customers who have probably received their paycheck today.
Handling cash is inconvenient. It has to be counted and secured. It has to be regularly deposited in person. Change has to be maintained. There is a risk of theft and counterfeit.
1. few people pay with cash and the company must handle those transactions differently for those few people. This may be seen as an unacceptable inconvenience and may cost the company more in employee training and the handling of the funds
2. customers that pay in cash may have no choice, or may choose to pay in cash on principle
In the second case I am speculating that they may be exploiting a niche population that they believe will pay the higher price. Consider that while some people may choose not to pay in cash due to the higher cost, case 2 accounts for those specific customers that will knowingly pay the higher amount in cash.