Your Consumer Health: Grab your plastic, cashless society has arrived

Have you recently entered a retail establishment that had a sign stating that “Only Debit or Credit Cards” would be accepted for transactions? Such is the reality that consumers face now that legal tender lost its luster and we are pushed toward a checkless, cashless society.

When I first came to Greenville in 1986 I had an AMOCO credit card to purchase gasoline. On my first trip to the station I encountered a sign that stated customers who paid with cash were charged at a lower rate than those persons using their AMOCO card. So I started using cash.

What happened between 1986 and 2024 to render cash obsolete? I feel justified in asserting that two things drove cash from its 20th century pedestal to an unacceptable alternative: the internet and the development of personal computers that facilitated online personal banking. Examples are plentiful.

This column in some months past discussed Amazon’s implementation of what it called a “Just Walk Out” technology to permit shoppers to enter a grocery store, scan an identification, then shop and pass through the exit without the necessity of having their individual purchases scanned and charged by a cashier. This system relies on sensors and cameras to keep track of all items placed into a cart with a final charge made upon exit from the store.

Needless to say, the increased effort to move toward a checkless, cashless society has provided Amazon’s new technology a boost in the marketplace with the company opening airport stores that offer magazines, drinks, periodicals and other incidentals.

Travelers who have taken sailing vacations know that as ship boarding begins an attendant asks if you would like to place a credit card number on file to cover the cost of onboard services and products. Experienced travelers quickly agree and provide a plastic card that will be used to pay for merchandise, cover hair and spa salon services, and pay for beverages at the lounge.

Those facing this question for the first time usually do not realize that currency is not accepted onboard for any product or service with the exception of tips for ship personnel. Individuals who do not “register” a card face having to meet at the concierge desk at trip’s end to settle accounts.

Fans attending professional sports contests now find themselves facing an inability to use cash to purchase food, drink and other concessions such as athletic apparel. This past summer an 85 year-old fan attending a professional baseball game in New York City tried to use a $20 bill to purchase an alcoholic beverage but was rebuffed at the counter. He was told that cash could be converted to a plastic card at “reverse ATMs” in the stadium but there was a $3.50 charge for each transaction.

Perhaps the most dramatic indication is the government’s National Park Service deciding in 2023 that over 400 sites under its jurisdiction would transition to card-use only. This resulted in three U.S. citizens filing a lawsuit against the park service arguing that federal law required it to accept cash as “legal tender for all debts, public charges, taxes and dues.” The complainants seek no monetary compensation and simply want the park service to reverse its policy. They further acknowledge that a card-only approach is advantageous to the service but contend that it also discriminates against those citizens who do not have bank accounts or card alternatives.

A spokesperson for the park service countered that handling cash creates unnecessary responsibilities for park employees and is expensive. He pointed out that the Death Valley park spends roughly $40,000 annually to process and transport cash to banks. Cards also speed up the entry into popular parks, something that is desirable to anyone who has traveled to busy parks like Yellowstone or Yosemite.

As the dominance of credit and debit cards in the markets has continued, so has the volume of criminal efforts to perpetuate fraud on consumers. This problem is not unique to the U.S. and has occurred in Europe, where Sweden led the way in moving toward a cashless society. The digitalization of cash in Sweden has allowed banks to reap tremendous profits, however, profitability is being challenged by criminal gangs using online schemes that produce their largest source of income. This crime wave has also resulted in a level of gun violence that Sweden has never seen previously. And remember that there is no Second Amendment in European countries and individual citizens cannot easily acquire firearms.

The preference of credit and debit cards over cash is clear to see. But why and how has this move toward a checkless, cashless society evolved, who is responsible and does cash have a future in consumer retail environments? Read more in my next column.