Much money and effort has been expended by credit card companies and others trying to compete for your methods of payment. So it is that we note the irony buried in the findings of the Economists Incorporated study, “Retailer Payment Systems: Relative Merits of Cash and Payment Cards” released earlier this month.

Whereas the groups promoting the death of cash argue fiercely for a reduced number of payment options, it is interesting to note that this study defines the advantages for Retailers who accept multiple forms of payment choices, including cash and cards. This seems to agree with the findings released in the recent US Federal Reserve System’s Diary of Consumer Payment Choice.

Considering the results from these two studies, it seems safe to say that consumer choice will be a major factor in preserving the longevity of cash. Perhaps the proponents of a cashless society would be well served to redirect their efforts – not to try and compete with cash, but rather with each other. Cash is ubiquitous, secure and the lowest cost payment option for individuals and retailers alike.

Clearly, the right to a choice is the clear winner in this misdirected contest.

For your review, we offer here a summary of the Economists Incorporated study, “Retailer Payment Systems: Relative Merits of Cash and Payment Cards”.

Study Explodes Myth That “Cash-Only Can Be More Profitable For Retailers” Analysis of small retailers showed costs of payment card acceptance is dwarfed by value created

11/21 PRNewswire A study which analyses the point-of-sale practices of small retailers demonstrates that retailers that adopt a cash-only strategy make fewer sales, of smaller dollar-value, yet  still incur costs associated with handling cash. The study, Retail Payment Systems: Relative Merits of Cash and Payment Cards, was released today by Economists Incorporated.

The study weighs the costs and benefits for merchants of different payment systems and in doing so explodes the myth that merchants do not incur costs or any significant disadvantage from rejecting electronic payments and operating on a cash-only basis. The study is the latest contribution to a mounting body of publically available work which quantifies and demonstrates the extraordinary value of payment card acceptance to merchants of all kinds.

The paper, which details case studies of five merchants – a fast-food restaurant, a full-service restaurant, a gas station, a convenience store, and a small, independent grocery store – and the experiences of a florist who added the use of credit cards, reveals that:

Merchants can expect significant increases in sales when they add payment cards to their mix of accepted forms of payment

The difference in merchant costs associated with credit card transactions and cash transactions is relatively small

The additional value that merchants derive from payment card acceptance is large relative to any associated costs

Economists Incorporated is a premier economic consulting firm in the fields of law and economics, public policy and business strategy. With offices in Washington D.C. and San Francisco, Economists Incorporated offers expert consulting and testifying services in the context of litigation, arbitration, proposed mergers and acquisitions, regulatory hearings and business planning.