‘Dirty’ money? People pay in cash to forget about guilty purchases

NOTRE DAME, Ind. — Credit cards may be convenient, but cash is king when it comes to guilty purchases. A researcher from the University of Notre Dame found that people tend to pay in cash when making purchases that are hard to justify. That way, there isn’t any lingering evidence, or a credit card bill, to remind shoppers of purchases they would rather forget.

Whether it’s an $18 beer at the airport, or a clandestine trip to the local doughnut shop while you’re on a diet, many people have made purchases that they’d like stricken from the records. Cash allows us to make such purchases and then purge them from our minds, the study authors say, whereas using a credit card or other digital payment methods pretty much guarantees there will be a reminder about the questionable decision later on.

“When a purchase is difficult to justify — like buying an overpriced bottle of water at the airport, cigarettes or candy — consumers pay with less-trackable methods, like cash, so they can eliminate the paper or electronic trail and ‘forget’ this guilty purchase,” says Christopher Bechler, who specializes in consumer behavior and social psychology with an emphasis on attitudes, persuasion, and financial decision-making, in a university release. “When a purchase is easy to justify, consumers have no problem paying with trackable methods like credit cards that create paper or electronic trails.”

Woman making withdrawal of cash at local bank
(© Syda Productions – stock.adobe.com)

While plenty of research has been conducted on financial decision-making in behavioral economics, consumer behavior, and social psychology, researchers say this project was the first ever to conduct an in-depth assessment of how people choose to pay for their goods and services.

Researchers analyzed real transaction data pertaining to 118,042 purchases, and then manipulated the justifiability of purchases consumers imagined making across six experiments encompassing over 5,000 individuals. Study authors hoped to capture the causal effect of hard-to-justify purchases on consumers’ intentions to use cash versus a credit or debit card with this approach.

“I think a lot of consumers — particularly those who diligently track their card expenses — recognize that they use cash so they don’t have to think about certain purchases again,” Bechler explains. “In fact, this strategy of using cash to hide purchases from ourselves if we feel bad about them is something my co-authors and I admitted to doing ourselves.”

All in all, researchers speculate that merchants should take note of this work — saying that it’s a good idea to be strategic about the types of payment methods allowed at a business.

“A doughnut shop could benefit from letting its customers pay with cash because they may want to forget their unhealthy purchase,” Bechler concludes. “A salad shop might not see the same benefit.”

Nowadays, there are more ways to pay than just cash or credit. As cryptocurrencies and other new payment methods continue to emerge in the marketplace, researchers say this study underscores the huge implications for both merchants and financial institutions when designing payment methods for the future. A stronger understanding of the factors influencing how consumers choose to pay could prove invaluable in terms of predicting which new methods will attract widespread adoption.

The study is published in the Journal of the Association for Consumer Research.

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John Anderer

Born blue in the face, John has been writing professionally for over a decade and covering the latest scientific research for StudyFinds since 2019. His work has been featured by Business Insider, Eat This Not That!, MSN, Ladders, and Yahoo!

Studies and abstracts can be confusing and awkwardly worded. He prides himself on making such content easy to read, understand, and apply to one’s everyday life.

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