Monday, September 30, 2013

Cash In on King Cash

Jack Kleinhenz, Chief Economist with the National Retail Federation, recently posted a paean to cash payment. Dr. Kleinhenz reports that Americans use cash at retail almost half the time, most often for transactions of less than $10. But even with larger purchases, continue to be ready to make change rather than changes in how you accept payment.
     Last year, launched their “Pay with Cash” program. “Pay with Cash” is designed for customers who lack a checking account and credit card, but want to take advantage of the broad item selection and ease of shopping online. The customer places an order via and pays with cash at a Walmart store within 48 hours, at which point the order is shipped. The seed of “Pay with Cash” was Walmart’s epiphany that only 15% of transactions at the stores use some form of credit. The Walmart shoppers are needing to, or at least preferring to, pay with cash.
     And there’s PayNearMe, which last January revealed they’d received $10 million in venture capital funding they’d use to expand the cash payment platforms available for retailers to implement. The company estimates the percentage of American households not having a bank account running as high as 24%. A target market for PayNearMe is teenagers too young to have their own credit.
     When your customer pays for a large purchase in cash, be sensitive to the possible reasons:
  • A desire for privacy. This sort of shopper might react negatively to your requests for further information, such as how they learned about your store or how they plan to use the merchandise. 
  • A limited credit history. These customers might be of any age, but there’s a skew toward the young ones. Consider these individuals a source of future business, so in your dealings, help them become discerning, appreciative consumers. 
  • Exceeding the credit limit. Some of these people might be compulsive shoppers who will ultimately appreciate you not pushing them to buy when you see them looking highly uncomfortable. 
  • Fear about the economy. The appearance of discomfort might also reflect doubts about banks and investments. Dr. Kleinhenz’s analysis is that one reason the volume of U.S. currency in circulation has more than doubled since December 2007 is that in times of financial turmoil, people start storing their wealth in cash. These customers will be most likely to buy from you value-priced items and relatively inexpensive luxuries. 
Click below for more: 
Credit the Appeal of Cash 
Build Trust Before Asking for Information 
Educate Children as Consumers 
Compulsive Buying Disorder. Okay, Laugh 
Expand Marketing to Credit Risk Consumers

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