Cash and Credit and Retail Payment Systems: How Retailers Choose What to Accept

The majority of shoppers still choose cash as their preferred payment method. Credit cards are used more frequently in department stores and dine-in restaurants, but nearly all other retail establishments receive a higher percentage of their payments in cash. Retailers may mistakenly believe this means they can safely remain a cash-only busy. Unfortunately, despite the apparent popularity of cash, it does not dominate the market as much as it did in the past. Credit and debit card usage increases every year and is slowly closing the gap. Business owners need to understand their customers and their habits to ensure their location is convenient for shoppers. Understanding why they choose a specific payment method is part of that formula.

When Credit is Used

Credit and debit cards have proven to be the popular option for younger shoppers and environmentally aware consumers who think paper money is wasteful. People choose cards not just for large, expensive purchases but for daily shopping. Many people avoid carrying cash because it is cumbersome and irreplaceable if lost. Another habit of credit card customers is using their cards for everything and making only one payment a month from their bank account to cover all their spending.

When Cash is Preferred

Some consumers remain with cash because they prefer their purchases remain private. Many also have understandable concerns about the risk of identity theft. Debt problems and a lack of self-control are two additional reasons why some shoppers avoid walking into any retail establishment with anything other than cash.

How Retailers Decide

The majority of business owners benefit from using multiple retail payment systems. This enables them to appeal to the greatest number of shoppers and to not lose a sale because someone only has one payment type available. The size of the business, the amount of the average sale and the age and spending habits of their customer base must be considered.

Every method of payment includes some type of risk for the retailer. Counterfeit money and cashier theft and error occur with cash. Chargebacks and processing fees are not uncommon for credit and debit cards. Checks and money orders are far from foolproof. Luckily, every method also offers ways for the retailer to protect their own interests and reduce the number of errors and fraud they experience. The first step is to find a reputable payment processing partner that will help to reduce all forms of risk.