Cash carries hidden costs that card payments help businesses avoid
WASHINGTON, D.C. – The average consumer is expected to spend $115 on Halloween this year, pushing total spending to a record $13.5 billion, according to the National Retail Federation. If those costumes, decorations, and treats were all paid for with credit cards instead of cash, merchants could save between $323 million and $431 million in processing costs. Handling the same purchases in cash would cost stores an estimated $635 million to $743 million, based on IHL Group research.
The savings show up even in the candy aisle. Shoppers are expected to spend $4.1 billion on Halloween sweets this season. When those treats are bought with a card instead of cash, stores save up to $131 million.
“Every Halloween, families look for ways to stretch their budgets, and credit cards help on both sides of the counter,” said EPC Executive Chairman Richard Hunt. “Shoppers get fraud protection and rewards. Store owners avoid the expense of counting, guarding, and hauling cash to the bank. For a small business heading into one of its busiest weeks of the year, that adds up. Lower costs for merchants mean better prices on the shelf.”
Cash is far from free for retailers. IHL Group research finds that grocery and warehouse stores spend 4.7% to 5.5% of each cash transaction on processing, compared with about 2.3% for credit cards. Those costs include equipment, security, theft losses, and staff time. The National Association of Convenience Stores has estimated that employees at some stores spend up to 20 paid hours a week just counting money.
Corporate mega-stores continue to argue that card acceptance is a burden on businesses. The numbers say otherwise. Electronic payments help merchants move customers through checkout faster, reduce the risks of keeping cash on hand, and keep overall operating costs in check. Those savings help keep Halloween affordable for families.
