May 24, 2018

In retail, options are mandatory



If you know anything as a retailer, it’s that shoppers want what they want when they want it. We want to shop from our couches at 11 p.m., or we want to drop into a store and have an experience; we want to get things delivered, or we want to pick them up the same day. We want every option so we can create the experience we want and need in the moment.


It’s really no different with how we pay for purchases. We want options that fit our needs in a place and time, whether that’s credit, debit, check, mobile payments or cash. Despite some retailers and restaurants trying the cashless route, studies have shown consumers prefer to have the option to pay in cash. Even Amazon came up with Amazon Cash so that cash shoppers can still make online purchases.

Where we use cash and why

Research company Mode3 surveyed nearly 1,000 shoppers in the grocery, convenience and fast food segments to find out more about where they used cash and why, and the results should come as no surprise to anyone familiar with the Federal Reserve’s research.

  • 62 percent of respondents said they had used cash in the last month at a grocery store.
  • 78 percent of respondents who had shopped in a convenience store used cash there in the last month.
  • 100 percent of the fast-food diners surveyed said they had used cash in the last month.

Across these segments, the top reasons for using cash in these stores were:

  • “I only use cash when I buy one or two items.”
  • “Using cash helps me budget and spend less as opposed to using a card.”
  • “It is just a habit; I always have paid with cash.”

Building loyalty with cash shoppers

Americans are generally still big fans of credit cards, particularly store credit cards. Forty-one percent of us have them, but some retailers are altering their loyalty programs to allow shoppers to get benefits without signing up for a card. Macy’s recently created a new tier for non-cardholders to enjoy benefits and discounts, and Target is testing a similar program.

Why give people a chance at discounts even if they choose to eschew store cards, which usually create a healthy revenue stream for a retailer? Because 31 percent of transactions are in cash, and a combined 66.7 million Americans (more than 20 percent) are unbanked or underbanked, making cash their primary way to pay for purchases. Cash is a vital part of our economy, but the cost of accepting it is simply far higher than it could – or should – be for most retailers.

Hidden costs of accepting cash

Think you don’t need to worry about the cost of cash? You do. Most retailers think of cash as a low-cost payment instrument, dithering more over the cost of credit. Because cash is generally over-handled, unseen costs creep up.


Keeping the cost of cash at bay

One way to keep the cost of cash under control is to simply handle it less. There are a variety of technologies available to count and secure funds, but don’t box yourself into an inflexible solution that doesn’t future-proof your operations or infrastructure. This can happen with enterprise-wide implementation of a single type of device or a managed services agreement.

Instead, focus on handling cash less while also increasing the control and visibility you have over it. A comprehensive platform that addresses cash challenges throughout your business will give you options for your operations at each store today and in the future.