By Marissa Laliberte
This article was originally published in Readers Digest.
1. You’ll value your purchases more
Volunteers in a study published in the Journal of Consumer Research bought a coffee mug for $4.94 (marked as $2 off the original price) using either cash or credit. Two hours later, the researchers told them to pick a price to sell back the mug. Those who’d used cash asked for almost $3 more than those who’d paid with credit. “You feel something when you physically part with your money, and there are different levels of pain depending on the type of payment,” study author and University of Toronto assistant professor of marketing Avni Shah has said. Watch out, though—there are some times when it’s actually better not to pay with cash.
2. Your purchases will feel more meaningful
In a follow-up, the same University of Toronto researchers gave people either cash or a voucher to donate to a charity of their choice, to find out if the reasons people valued the mugs more because of the effort and fees related to finding an ATM. Turns out the first study’s findings held true: those who’d donated cash felt more connected to their chosen charities and less connected to the ones they hadn’t picked. Cash might help you make more thoughtful, meaningful shopping decisions, Shah says.
3. You’ll buy less junk food
Shoppers who pay with plastic buy a larger proportion of unhealthy, impulsive foods than those who pay with cash, according to a study in the Journal of Consumer Research that followed households over six months. The authors conclude that paying with cash could boost feelings of self-control because it’s more painful to hand over cash than to swipe a card. Check out some more tricks from people who are really good at saving money.
4. Your kids will eat less too
Trickle down your junk food resistance to your kids by giving them cash for the cafeteria. Students at schools that only accepted payment from pre-filled accounts ate about 752 calories at lunch (441 of which were from non-healthy foods like cheeseburgers and dessert), compared with the 721 calories (378 being unhealthy) eaten by kids whose schools also accepted cash, according to a study in the journal Obesity. The study authors say prepaid accounts give parents less control over what their kids buy, and because they’re not sure how long the money should last, children are inclined to spend more.
5. You’ll save money
When asked how much they’d pay for a meal in various payment forms, participants were willing to spend more when paying with credit card than with cash, according to a 2008 study in the Journal of Experimental Psychology: Applied. Another experiment in the report found that volunteers who were given a $50 gift certificate paid more per item at a grocery store than those who received the same amount in cash. “Less transparent payment modes such as a credit card or gift card, which somewhat dull the pain of paying, are more likely to be associated with free spending,” the authors write. “A transparent mode such as cash is more likely to be associated with thriftiness and utilitarian consumption.” Use these psychological tricks to spend less while you shop.
6. You’ll spend less frivolously
In a study published in the Journal of Behavioral Decision Making, participants were given either a $5 gift card or the same amount in cash to spend at a shop the researchers set up. Those who paid with cash spent the money on more useful items, while those with gift certificates went for items meant for pleasure, not a practical need. Don’t be afraid to treat yourself, but be aware that the convenience of a credit card makes it easy to spend on things you don’t need. Learn the times you should never, ever pay with your credit card.
7. You’ll keep track of costs better
In one part of a four-experiment study in the Journal of Consumer Research, volunteers started by playing a word game that got them to think about either cash or credit cards. Next, they were shown the picture of a camera, along with its financial costs (like price and warranty charges) and features (like picture quality and zoom features). Those who’d been primed to think about cash remembered the prices better, while those who’d thought about the credit cards were more likely to think about the camera’s perks. Next, learn the money rules you should have memorized by the time you’re 40.
You can view the Reader's Digest article here.
By now, you know cash leads the way when it comes to the way people pay. But did you know cash is a major contributor to social cohesion and cultural unity? Read on to see how cash has the power to bring us together as a society.
Cash is king, particularly with low-value retail transactions. See why consumers continue to reach for cash to facilitate fast payments, and how cash can help with budgetary control. This is the fourth post in a series about financial inclusion and the importance of cash.
Cash continues to rule our economy. Read on as we explore just how convenient and simple cash is to access and use – and how it creates a system of trust. This is the third post in a series about financial inclusion and the importance of cash.
Cash continues to dominate the global economy. One way it achieves this is its universal status. Cash does not discriminate – it welcomes all users, all transactions. And, it doesn’t require complicated or expensive technology tools to use. This is the second in a series of articles that explore why cash is critical to financial inclusion.
Despite the advent today’s global, digitally-driven economy, cash continues to be exchanged billions of times around the world on any given day. Cash remains a pillar of our economic system, not just in facilitating payments, but also by enabling a system of financial inclusion where all consumers, regardless of income or social vulnerability, have the ability to access and utilize mainstream financial services and tools.
While advocates of the war on cash would like you to think otherwise, cash continues to be king and will be for a long time to come. It plays a leading role in our way of life, fostering a universal system of access, trust, efficiency and connections among people of all socioeconomic backgrounds.
Let's continue to support payment options together!
WASHINGTON – As more restaurants go cashless, a backlash is building, especially in the nation’s capital, where an increasing number of fast-casual eateries are only accepting credit or debit cards and mobile payments, the Washington Post reports. Sweetgreen, a national chain, doesn’t accept cash at most locations, including its Washington, D.C., unit, while Menchie’s, Barcelona Wine Bar, The Bruery, Jetties and Surfside in the District also refuse cash payments.
“By denying the ability to use cash as a payment, businesses are effectively telling lower income and younger patrons that they are not welcome,” said D.C. Council member David Grosso, who has introduced a bill that would require retailers to let customers pay in cash. Chicago didn’t pass a similar bill last year, and Massachusetts has a 1978 law on the books that’s for cash payments but it hasn’t been enforced regularly, according to the state retailers association.
For Surfside’s owner Bo Blair, not accepting cash has meant no armored vehicles for transporting money to the bank, no chance of employees stealing from the cash drawer, no robberies and no extra work for employees to reconcile cash receipts each evening. “Not having to worry about employees stealing or getting robbed is a huge lift off our minds,” said Blair.
Other retailers realize that “not everybody is able to buy a smartphone. Not everybody is in a position where they can get a credit card. Not everybody is even in a position where they have a stable bank account to be able to use the debit card. But they are hungry too, and have $10 in their pockets and they would like to spend their legal American form of tender, known as cash, with you,” said Arianne Bennett, who owns Amsterdam Falafelshop. “As society and technology evolves, we must ask ourselves always, not just ‘can we’? But ‘should we’?”
Starbucks has been testing a cashless store in Seattle, while Amazon Go announced it would be opening a second Seattle location of its cashier-less store. A recent study found that Canadians still prefer cash, especially at convenience stores, while many millennials also like to pay with dollars over credit or debit cards.
Article provided by NACS
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Even though you may have heard the term “pain of paying,” you’ve probably not given it much thought.
Did you know that scientific experiments using MRIs show that spending with cold hard cash triggers brain activity in the same regions as physical pain?
From this research, it is easy to hack your way into spending less with cash.
You see, using plastic to pay does not trigger the same pain sensation. This means that you are more likely to spend more using a credit card because you do not experience the natural stopping mechanism cash incites when you physically see and feel that your wallet is almost empty.
Millennials are considered the digital generation. So you would think that they would be the fastest adopters of technology like Apple Pay. But it turns out that when millennials shop in physical stores, they like to use cold hard cash.
The“Diary of Consumer Payment Choice,-.” published by the Federal Reserve reports that millennials have a higher propensity to use cash than do Gen Xers or Baby Boomers.
Whether it be local, regional or even a national brand, people are traditionally drawn to things they know. Consumers in the Millennial demographic (born between 1981-1996), however, have been steering away from large, corporate brands in favor of smaller, less recognizable companies. Known as the Reverse Branding Trend, younger consumers are less prone to promoting big companies with flashy logos and catchy slogans.
Spending trends suggest that affordability and value are of vital importance, closely followed by brands that tell inspiring stories and speak to Millennials ethically. A recent article from Forbes states that, “Generally, Millennials choose to vote with their wallets for brands that tell inspiring stories, conduct business ethically or contribute to their personal brands.” However, a Millennial consumer is known to be brand loyal, once they are won over.
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