I think that cash should always be an option. That said, I can't tell you the last time that I wanted to use cash instead of plastic. Why would I use cash when I receive additional rewards for making the same purchase? Given the volume of purchases I make, I can essentially purchase a trip for myself and my family every year with rewards points. Why wouldn't I use plastic?
I don't think the OP is suggesting a plastic-less society. The points simply lay out the reasons to keep cash on the table as a viable option. I actually agree with you both. I spend a good deal of energy maximizing the rewards points I get. However, I love being able to buy a [insert product here] from another individual without an institution or government knowing about that purchase. The disenfranchisement is a HUGE issue. You and I live on plastic, but SO MANY people I work with live in a cash only world. Whether impoverished or living on cash by choice (it's actually something I recommend when counseling people on budgeting - there's a whole system) - some people CANNOT live in a plastic world.
I don't think the OP is suggesting a plastic-less society. The points simply lay out the reasons to keep cash on the table as a viable option.
Yes, that's why I started my comment with, I think that cash should always be an option.
Whether impoverished or living on cash by choice (it's actually something I recommend when counseling people on budgeting - there's a whole system) - some people CANNOT live in a plastic world.
I couldn't agree more, if yo cannot spend responsibly with plastic, cut the card up RIGHT NOW. Otherwise, get yourself a rewards card that maximizes points in the areas where you spend, fuel, travel, groceries etc and rack yourself up some points and USE THEM. Otherwise, dirkson is right that most businesses factor in the cost of processing credit in to their pricing structure and your paying for someones rewards points. -They might as well be yours.
I use cash at the bar so I don't have to wait in line to cash out my tab. I tip in cash so that people I'm tipping don't have to get taxed. I use cash so that I can just slap it down and walk away instead of waiting for my transaction to go through. I give homeless people cash (fuck the people who say that you should only give them food and that they will only use the money for drugs and booze. I give homeless people money so that they might have some chance of a small pleasure or succor in their otherwise horrible days, be it money for a hotel, a shower, drugs or booze these are all things that I enjoy why shouldn't they). I use cash because I know that paying for my coffee with my card scrapes 5% of the merchant. I want to see the business I frequent stay around and prosper, it gives me more pleasure knowing that the bloodsucking credit companies don't get to buy another boat or mansion but the guy who owns the food cart gets to buy their kids something nice than the points off my coffee purchase ever will. I use cash because I don't really want to expand their dossier of my consumption habits anymore than I have to.
Your points are no less valid given what I'm about to write, I only write it because it's nice to have an accurate picture. The guy at the food truck is likely using Square to process his transactions, like 90% of them do. If so, it's a flat 2.75%. It's still a cost, and they are certainly better for having your cash but honestly, unless a business owner is an idiot, they're not paying 5%. In fact, I know a lot about this stuff and since I know you are opening a business, I'd be glad to consult with you via PM. There are right and wrong things to do. Businesses processing at 5% tend to be ones that make the mistake of getting in to a POS system that mandates a particular payment processing company. Guess what? Now you are fucked because they'll steadily jack up your rates and unless you are willing to divest yourself from the $20k POS system you put in, you're not going anywhere. It sucks. The credit card processing industry is a very nefarious one with a lot of crooks and criminals walking around in suits and ties, signing people up for 3-5 year contracts and terminal leases at $300 a month for something that can buy for $50. I purchase most things with my card and here is how I handle the scenarios you raise: 1. I'm an exorbitant tipper, much to my wife's chagrin. Honestly I tip 25-35% on average. 2. There are many situations when paying with a CC is actually faster than cash. Grocery stores come to mind etc. It's amazing how bad people are at making change these days, I guess we can blame CC for that. 3. Homeless -I've taken to carrying $5 Gift cards that I hand out to the homeless in our area. There's one spot near a Starbucks where they are often panhandling. They seem glad for it when I give it to them and I know they're not buying drugs with it. But your point isn't lost on me. Cash rules if you are a business and I think it's cool of you to accommodate that.
Yeah, or they could get a sandwich. Their call, but it's certainly more than they had prior to me giving it to them and in no way harms them. I try to give it with a kind word and a smile which seems to be of more value than the card/money.
I don't know how much the kind word is valued, I don't appreciate the vocal tip at work (sans monetary especially, It's good to know I'm doing my job alright I suppose). Seeing an ancient skeletal begger weep at a $20 is pretty heavy. So little meaning so much is not something I find uplifting, makes me feel sick about the world.
Im of the mindset that you can never go wrong with kindness. I've dolled out a few of those $20 gifts to homeless myself. It's a cool experience for both involved for sure. I've NEVER only given a verbal tip.
I hate giving my money to the homeless, nothing cool about it. I want to spend that money on myself and my family. I have a tiny sliver of understanding about how shitty their lives are and it compels me to give up a small portion of my hard earned bread to them, out of...compassion I guess, maybe sorrow. I should give every cent away if I were a decent human being but you know what, Fuck em, they probably made their bed and they will get what I give them, my shitty crumbs I guess. I've seen people who's hearts I admire more than any others give their last 5 bucks to shitty gutter punks who were traveling. I wish I were that kind if person but I'm just not. I hate that homeless people get my money but I hate the idea of anyone needing it that bad. Whole thing, my loss their desperation, makes me sick.
Why not? Because the money you're saving is actually money you're paying anyway. Although it seems free to you, merchants have to pay a rate to the plastic-processing companies to accept your card. Usually between 3% and 10% of the purchase price, depending on various factors. And when merchant costs go up, the cost of the product they're selling goes up. So prices today, in the age of plastic, are inflated slightly more than they would otherwise be. Your reward points are just the card company sharing some of its gains with you, to encourage you to push their product. So here we have a tragedy of the commons - Individuals are better off defecting, so that they can partake in the rewards. But society in general is worse off as individuals defect, because now goods cost more than they otherwise would. Cheers!
Why is it that cash discounts rarely exist? A big reason is that (wait for it...) many businesses don't mind accepting credit cards at 2-3%. I know you'll find it hard to believe but it's true. They like the ease of pay and in many industries they get paid much more quickly than they would with ACH. Many people can have a card on file and get paid NET 10 when with ACH, they fall back to NET 60+ which is horrible for cash flow purposes. This is why bitcoin is such an attractive thing to many merchants, it carries with it the ease of pay and convenience of plastic but without the 2-3% transaction fees. Also, if plastic were to disappear tomorrow, do you really think that retailers would lower their prices 2-3%? Nope. I could also argue that in a cashless society, there is a far lesser need for in house accounting, check writing, paper-invoicing, bad debt collection, factoring etc. There are advantages and disadvantages to both cash and plastic. In my opinion the craziest thing is that the banks can charge .5-1.5% to process debit cards. This is essentially risk free, cash transaction that has zero rewards attached. That's a racket. I see the industry changing drastically in the next 3-10 years though with the advent of crypto currencies and peoples willingness to participate in the digital payments space.Why not? Because the money you're saving is actually money you're paying anyway.
Okay, but in lieu of cash discounts (which rarely exist), it's money I am paying regardless, so I might as well receive the rewards. Also, unless you are running a highly, highly risky business there's no way you are processing at 10%. The national average for V/MC in retail is 2.62% Amex is slightly higher and typically is about 2.89%.
I would like to add to this - while saying I agree with every point made in the above post - Mastercard, Visa, and US financial regulations provide recourse in the case of unlawful billing. This doesn't just mean "someone stole my card and used it" or "someone charged my card when I told them I couldn't" - you could argue that without plastic (using only cash), at least the latter circumstance wouldn't occur, although theft (of cash) is always a concern. There's also "I bought something and it wasn't what the merchant said it was" and "I bought something that never showed up" (if you are paying with credit), for example. This is not a reason to eschew cash completely. However, I think when considering the pluses and minuses of currency types, it's important to consider that you are protected using plastic in a way that you are not protected with cash. However, you have the privacy, which I consider extremely important. I wonder if gov'ts are pushing for cashless societies because it would take a toll on the black market? However then I anticipate the black market would just become a barter system.
aside: I know that there are people in foreign countries that, because they can't send cash (over a certain amount) to the US, will do debt swaps in order to pay someone. For example, I owe a guy in china 25k and a guy in China owes you $25k. Instead of me paying the guy in China, I'll just pay you and the guy that owes you will just pay the guy I owe money to in china and everyones happy. This is a method of money laundering that occurs. So much shizzle going down in the world of payments these days. Exiting times, not sure what the future holds.I wonder if gov'ts are pushing for cashless societies because it would take a toll on the black market? However then I anticipate the black market would just become a barter system.
There's no doubt that money laundering is far more difficult with credit than it is otherwise. Still, businesses in the US that make a transaction over a certain dollar amount have to report it thusly, whether it's on credit or otherwise. It's much easier to hide cash though. You can hide $10k influxes in to a cash business like a bar/restaurant much more easily than you can in a b2b space that typically uses ACH/Credit. That's why those gangsters are always running bars/stripclubs/casino's. -Over the counter cash transactions.