Cashless Retail: Marketing Imperatives vs Inclusion?

As we have observed before, moving closer to the cashless society is not only a matter of technology, but of ethics. Cashless retail excludes the unbanked and underbanked – who make up a quarter of U.S. consumers – from buying at the retail establishments that practice it. Whether by accident or by design, that works to make those retail establishments less socioeconomically inclusive. What, if anything, ought to be done?

A plea for inclusion in retail, this Wired opinion piece is interesting less for its argument and more for identifying some of the marketing imperatives and aspects of consumer psychology encouraging retailers to go cashless. Short enough to read in class, it could serve to ignite classroom discussion on the ethical aspects of going cashless. >>>

LINK: Cashless Stores Alienate Customers in the Name of Efficiency (by Randy Kohl for Wired)

Brands increasingly seek to provide “frictionless” experiences—a sense of ease and efficiency that enables users to engage with them on their terms. However, in a small but growing number of cases, frictionless means eliminating cash as an accepted payment method.

This is a seemingly minor but significant shift in the retail landscape. As a society, it signals a shift away from inclusive commerce toward what might better be described as the age of the preferred customer.

Interestingly, the pushback against cashless business practices has mostly come at the state and municipal level. … New Jersey and Philadelphia passed laws requiring that all retailers accept cash payments, and San Francisco, Chicago, New York City, and Washington, DC, are considering similar legislation. Why?

Almost 1 in 4 US consumers (which equates to 32.6 million households) are unbanked or underbanked. That means these people either have no access to banking products like credit and debit cards, or must pay exorbitant fees to use instruments like prepaid debit cards. … It’s one thing for luxury brands to self-select their customers on the basis of price point, but it’s another for a retailer to deny access to a person trying to buy a pack of gum.

Beyond the altruistic arguments that merchants use for going cash-free, there’s another, unstated reason they’re drawn to this model: Consumers spend more.

Increases in average order size can more than offset the roughly 3 percent transaction fee merchants pay to payment processors.

Brands need to consider inclusive commerce a core part of their overall customer experience. Cash may no longer be king, but its place in the retail landscape will remain for decades to come.

What do you think?


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