Shoppers using cash instead of plastic

| April 21, 2008 | 0 Comments

A study by the British Retail Consortium (BRC) has established that a growing number of shoppers are using cash to pay for their purchases instead of credit cards.

The BRC said their survey showed a reluctance by people trying to control their finances to spend money they did not have and added that cash was alive and thriving.

The organisation carried out a survey of 17,000 shops and said cash is used for 60% of sales, up from 54% last year.

Stephen Robertson of the BRC said hard-up customers are increasingly reluctant to spend money they haven’t actually got in their hands.

While total retail spending continues to grow, there is a widening gap between the amount spent in cash and the amount spent using cards, suggesting customers want to keep tight control of their finances, added Mr Robertson.

The BRC added that debit and credit card companies should reduce the amount they charge retailers.

The organisation said a £20 transaction in cash costs the retailer approximately 4p, but a shopper paying by credit card would cost them over four times that amount.

Mr Robertson said the charges were unjustifiable and cost customers because retailers were forced to pass them on.

Since 2000 the Office of Fair Trading (OFT) has been investigating the interchange fees imposed by Mastercard and Visa and is expected to rule shortly.

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