Cash payments found to help shoppers in a unique way, reveals a study. Unsplash

The journey towards a cashless society has gained momentum, with Americans largely embracing cashless transactions. However, recent research from Stanford University sheds light on a surprising advantage of making cash payments.

According to the study by Szu-chi Huang, associate professor of marketing at Stanford Graduate School of Business, consumers opt for credit cards to reinforce memory retention, whereas cash payments serve as a tool to forget certain purchases. 

The research, which analysed over 118,000 real-world transactions, points out that credit cards create a “paper/electronic trail” that enhances memory recall, making them suitable for significant or justified purchases. In contrast, when faced with purchases they’d rather overlook, consumers tend to lean towards cash transactions.

Moreover, cash payments prove useful in concealing purchases from partners, offering a level of anonymity that digital transactions lack, as per a report from Bankrate.com. The survey also highlights the common occurrence of financial secrecy among Americans, with one-third confessing to some form of financial infidelity, often involving excessive spending or hidden debts.

While cashless payments provide ease and convenience, embracing cash transactions can serve as a strategy to manage budgets. Experts suggest adopting the envelope method, dividing spending into categories represented by envelopes. Once an envelope’s funds are depleted, either spending in that category stops for the month or borrowing from another envelope is necessary.

The perspective given by the Standford study encourages consumers to consider the pros and cons of various payment methods, acknowledging the unique benefits that both digital and cash transactions offer in different contexts.



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