Turns out paying with plastic is not for everyone and cash really is king. In fact, keeping cash payment as an option will help retain and grow your customer base. Here are three reasons why:
1. Not all consumers have access to credit cards… or banks. Approximately 7% of the population do not use a credit card. With limited avenues for payment, these individuals often rely on cash to complete purchases.
Furthermore, its estimated that around 10% of the U.S. population do not have a bank account. As such, this portion of the population often resorts to cash, money orders, and wire transfers to make payments.
On a related note, LPM Insider highlights data that shows that 63% of those who make under $50,000, which is 70% of the population, opt to pay with cash.
2. The largest portion of the population prefers cash. Millennials make up the largest segment of the population. Similarly, Pew Research Foundation found that at 35% millennials make up most of the employed population. More millennials in the workforce means more discretionary income for this segment overall.
A population segment often associated with digital this and digital that, millennials may not prefer electronic options when it comes to purchasing goods and services. CNBC found that 80% of millennials use cash and that 64% carry it most of the time. (Plus, no matter their age, consumers generally prefer cash and, as such, cash makes up around 12.6% of U.S. GDP.)
William Delforge, a 24-year-old actor and Chicago-based millennial “oftentimes prefers to make my purchases with cash because it helps me budget. Also, in most cases, it is a more convenient option compared to using digital or plastic payment.”
A recent USA Today article called going cashless a “risky strategy,” specifically when considering the influence of upscale millennials. The article went on to say that restaurants in particular consider this segment “among the most coveted of diners because of their youth and affluence.”
As a population whose 2020 projected purchasing power totals trillions and as a generation on its way to surpassing the Baby Boomers, it is especially important to be aware of millennials’ payment preferences.
3. Exclusivity may hinder an establishment’s brand image. Deleting an avenue for payment could lead consumers to question a company’s inclusivity. Brands beware – a company’s ability to accommodate needs is valuable.
Authentic kindhearted efforts build a loyal consumer base. It’s not all about products, prices, and services. Generally, whether consciously or unconsciously, consumers notice the good a company does.
As such, consumers could perceive trimming payment options as intolerant of needs – otherwise known as discrimination.
Due to the discriminatory nature of this exclusivity, the government has become involved in cases brought against retailers attempting to go cashless.
USA Today highlighted Alderman Edward Burke’s proposed requirement that all Chicago merchants be required to accept cash. The media outlet also touched on Massachusetts’ Discrimination Against Cash Buyers rule preventing merchants from eliminating cash as a form of payment.
So how does a corporation harness the benefits of accepting cash and simultaneously eliminate the seemingly costly management of it?
Turns out the perception that managing cash is always costly is a fallacy. Technologies and processes exist to automate many of the manual steps often associated with cash management.
Evention is a pioneer in this space. Our cash management solutions provide comprehensive automation for back-office operations. We make provisional credit, employee self banking, and automated reconciliation possible.
By delivering one-of-a-kind, innovative solutions that streamline financial processes, Evention eliminates the costly errors and inefficiencies stemming from manual cash counting and reconciliation for 1,000+ hotel, restaurant, retail, airport, and casino locations world-wide.
Our software and hardware solutions, which offer total cash control from drop through deposit, save time for cashier and management employees alike.
Since cash will continue to reign, it’s important to consider options that allow you to manage it effectively.