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The end of no cash? Not so fast

More Canadians are going cashless, but that doesn't mean grocery retailers should go the way of Amazon Go

JORDAN STEAD / AmazonJORDAN STEAD / Amazon

Chances are, you don’t have cash on you right now. According to Payments Canada, there are steep declines in the frequency of cash use: 42% of Canadian consumers use cash less than four times a month, compared to 20% in 2018. While digital payments will no doubt continue to grow, not everyone is ready to make the leap into a cashless future.

Amazon Go—a cashier-less concept with automatic app payment—launched in the United States last year with much fanfare. But as the concept expanded, the backlash against cashless stores started to grow. Those opposed say the practice unfairly disadvantages people without bank accounts or credit cards, or who simply prefer to pay with cash. This past May, Amazon Go opened a new store in New York—the first Amazon Go in that city and the first to accept cash.

While it’s tough to say if a similar backlash would happen in Canada, there aren’t a lot of retailers here rushing to adopt cashless, says Michael LeBlanc, senior retail advisor at Retail Council of Canada. “These aren’t the days when you can turn customers away. I’m not sure why you would eliminate the potential of having customers in such a competitive marketplace.”

READ: As cashless stores grow, so does the backlash

He adds that the cashless discussion is similar to that of self-checkout and automated checkout. “If you talk to three customers, you will hear three different things—some don’t find it convenient, some find it very convenient, some find it convenient occasionally. That’s not dissimilar with cash.”

Andreas Park, associate professor of finance at the University of Toronto, points to the ongoing backlash against self-checkouts, with shoppers complaining they have to do the work for the retailer. “If the store passes on the savings to the consumer, I can consider it. But what this is really about is to increase shareholder payoffs at the expense of people who are already getting very low, minimum wage salaries,” says Park. “That is one of the reasons people were reacting quite negatively, too. It just feels wrong.”

READ: Amazon warns Philly about proposed cashless store ban

Justin Ferrabee, chief operating officer at Payments Canada, notes that taking away a payment method for a back-office savings has a high cost on topline sales because people make choices based on the convenience of paying. For example, 73% of Canadians will choose an online retailer based on its payment method. “When you take away a payment option, you reduce convenience, and when you add a payment option, you increase convenience,” he says. “We are at a state in payments and commerce in Canada where adding is better than taking away.”

For retailers like Walmart Canada, the digital push doesn’t mean doing away with cash or cashiers altogether. The retailer recently opened a new urban Supercentre concept featuring its “Fast Lane” technology that allows customers to use their My Walmart app to scan products as they shop. At checkout, they scan the barcode on their order and have their order charged to their credit card on file.

In an email to Canadian Grocer, Steeve Azoulay, Walmart Canada’s senior director of public affairs, said the goal of Fast Lane, as well as its self-check- outs and Scan & Go system, is to help make the customer shopping experience more convenient. “These options add other choices for our customers to help them check out faster and navigate the store quickly,” he said. “[At the same time], our goal is to have a cashier option available at all times for our customers who prefer to check out with an associate.”

As with most things in retail, it’s all about giving customers options. “Cash use is declining, but we still see it being needed,” says Ferrabee. “We just don’t see it disappearing, not any time soon. It is one option.”

This article appeared in Canadian Grocer’June/July issue.

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