A narrative that has permeated the retail landscape for the past two decades as technological advances improve our standard of living, is the continuous call for a cashless society. The convenience provided through our reliance on mobile payment tools, credit cards, and even cyber currency threatens to do just that. However, a large segment of retailers understands the value of cash and the need for it.
Cash has proven resilient because of its benefits – and there are plenty. While consumers don’t tend to use cash for large purchases, such as cars and furniture, it remains king in many other areas. Cash is the most convenient, inclusive and agnostic form of payment for small purchases, which is why it is used in most transactions under $10. Some retailers and eateries accept only cash to avoid payment card fees, which allows them to offer better prices to customers. As such, cash helps keep transaction costs down. That’s why some gas stations charge less for fuel when paid in cash.
Buyers who use cash don’t have to divulge any personal information, which isn’t possible with other forms of payment. Mobile wallets and payment cards leave a trace, making it impossible for a buyer to remain anonymous. When it comes to budgeting your expenses, cash is the most effective way to keep track of how much is spent and how much remains inside the wallets. Legal tender is also good to have in an emergency; as winter storms, hurricanes, and other weather events have intensified in recent years, power outages have become more common in certain areas. While the power is out, it is virtually impossible to transact business without cash.
Negotiating a transaction that involves cash is typically easier than when payment cards or some type of financing is involved. For instance, a car dealer is more likely to offer a discount for a cash purchase. Even if the transaction involves a bank check, it is essentially cash – and cash in hand is usually more attractive than receiving payment in installments.
Cash is also convenient for travel. Cab drivers, pop-up street vendors, and some parking meters often take only cash. Workers who accept tips always prefer to get them in cash. Putting tips on credit cards could take a week before servers get them, and some employers deduct card fees from the tips. Lastly, when it comes to gifts, recipients generally prefer cash over a gift card for a wedding, graduation or birthday.
To summarize, cash benefits include:
- Convenience for small purchases and tipping
- Lower transaction costs
- Negotiating power
- Buyer anonymity
- Budgeting and debt avoidance
- Preparing for emergencies