Reverting to a Cash Society

By | May 19, 2009

A lot of interesting things have happened in the past several months as people from all walks of life learn how to stretch their money. A lot of changes have been accelerated by the fuel shocks during the summer of 2008; in a lot of ways we seem to be reverting to the frugal sensibilities of a past generation. More people are choosing to be more picky about when they swipe their credits cards even if that means not buying things until they have money in their bank accounts, the days of the $0-down mortgage seem to be numbered, and there is a lot more acceptance of environmentally-friendly technologies that promise to reduce our overall dependency on foreign oil even if it means taking a hit to the excesses that used to define our quality of living.

An interesting new trend being taken by small businesses is the practice of officering discounted prices to customers willing to pay in cash. This is not the same as paying “under the table” – rather, the store saves its merchant processing fee and passes those savings on to the customer. The idea is a good one in principle – paying in cash forces consumers to take stock of what they are spending as much as it saves stores from transaction fees.

Of course there are drawbacks to the plan. When people pay with cash, they tend to be more conservative with their spending since they tangibly feel their money leave their possession. That will cause stores to lose profits because customers will think twice before buying high-margin “impulse” products at checkout whereas before they might not have thought twice before charging it to their cards. Increased volumes of cash handling opens stores to loss through employee theft from the till, not to mention controls that need to be put into place to count and deposit physical currency.

Our family has saved a fortune by switching to cash. When getting to the bottom of your change jar means no more purchase power until your next pay period, you really start to appreciate the fine art of merchandising and the expertise applied to make you want to buy more and more. Cold hard cash feels more organic, and helps us to appreciate the effort it takes to maintain our lifestyle.

1 Comment so far
  1. The East Wants In | Ignorant Mouth November 11, 2009 9:24 pm

    […] American power has either waned in he face of economic crisis or it remains intact. Either we are reverting to a cash society with great emphasis on frugality and saving or we are not. Regardless of what those answers may be, […]

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