Shoppers, stop: Paying by cash makes you more attached to what you buy
If you look at shopping as a therapy, here’s something you should take note. When it feels easy to pay for something, it might just make us feel less connected to what we are buying, researchers, including one of Indian-origin, have found.health and fitness Updated: Jul 10, 2016 13:20 IST
If you look at shopping as a therapy, here’s something you should take note. When it feels easy to pay for something, it might just make us feel less connected to what we are buying, researchers, including one of Indian-origin, have found.
“Debit and credit cards rule the marketplace, and while going cashless is convenient, that convenience may come at a price,” said Avni Shah from University of Toronto in Canada.
Across two experiments, researchers looked at the potential consequences of paying with cards over cash by focusing on how connected consumers felt towards what they bought. The first experiment asked participants to buy a coffee mug normally priced at 6.95 dollars for the discounted price of two dollars with either cash or credit.
Two hours after the purchase they were then asked to sell back their mugs at a price of their choosing. Despite the fact it was the same mug owned for the same amount of time, those who paid cash wanted nearly three dollars more than those who paid with a card. “Those who paid with cash also reported feeling more emotionally attached to their mug,” said Shah.
In the other experiment, researchers wanted to eliminate possible reasons for the cash-payers charging more for their mugs because of the effort tied to finding an ATM and paying bank fees, or the added bonus for card-payers earning rewards points for their purchase.
Here participants were given five dollars in either cash or voucher to give to one of three charities and a ribbon lapel pin corresponding to the charity they chose. “We found that people who donated by cash felt more connected to their chosen charity than those who donated by voucher. Cash donors also reported feeling less connected to the charities they did not chose,” said Shah.
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“In other words, paying by cash made people feel more attached to what they bought and less connected to what they did not buy,” she added. According to Shah, paying with cash makes you value something more than paying with a card because of something called “pain of payment.”
“You feel something when you physically part with your money, and there are different levels of pain depending on the type of payment,” said Shah. “Something tangible like cash will feel more painful to part with than paying by cheque, which will feel more painful than paying by card and so on,” she said. The findings were published in the Journal of Consumer Research.