Reconciling spending in a cashless world

  Batch 18:45 31 Mar 2012

I've always had concerns about moving towards a cashless society and a couple of things recently have prompted this posting.

Firstly, I've received a new debit and a new debit card, both of which include contactless payment by default (and I'm not really sure that I want this facility - for reasons I'll explain below). Secondly, I have just read an article that suggests moves are a foot for Sweden to be completely cashless by 2020.

Now, I certainly use both debit & credit cards as a convenient means of payment for higher value items/bills (and for some online purchases regardless of value).

However, I find the idea of paying for a very large number of transactions with anything other than cash to be a potential nightmare. The reason for this is quite simple. For every transaction when I pay cash, I implicitly reconcile the cash side of the transaction in real-time. E.g. if I hand over a tenner for a purchase of, say, £1.73 I give the change a quick eyeball to satisfy myself that I've received (about) the right amount (£8.27) - i.e. I've reconciled the cash side of my purchase.

Contrast this with using plastic. In order to reconcile the monetary side of a transaction, What choice do I have than to keep a receipt for a trivial purchase, add it to a growing pile of such receipts at home. Then, periodically, go through a statement with hundreds of entries on it and check off all of the receipts just to make sure that I haven't been defrauded or that some processing error has not occurred (and left me out of pocket). Of course, contactless payment means that there is even more reason to reconcile in this way.

Purchasing low value items using plastic has become commonplace, so do these people do as I've outlined? Or do they just not bother about checking and risk getting mugged by their bank or someone else in the electronic food chain?

BTW, I realise that some people don't like carry cash as they are concerned about being robbed. But in reality the risk is incredibly small (most people go through life and never get mugged) and keeping track of the cash seems a heck of a lot easier than using plastic.

Any comments?

  Kevscar1 19:49 31 Mar 2012

Unless you have statistics to comppare the amount of people being mugged to the amount having work sums taken fron their bank account you have no idea which is more likely to happen to you.

  Aitchbee 20:18 31 Mar 2012

I use cash, all of the time, but even then I get 'done' at checkouts at my local big-name store, when items that have been reduced in price are charged at the top have got to be ever vigilent.

  Batch 21:05 31 Mar 2012

Kevscar - I agree. But my own 60 years experience tells me that physical mugging is unlikely (I live in London and I've never had a problem and I rarely use a car - my neighbours probably think I'm strange as I walk so much). But my point is really about whether people who don't (or rarely) use cash bother about reconciling or not and I'd be interested in other views on this.

Aitchbee - I think what you are describing is something entirely different and would happen regardless of payment method.

  [email protected] 22:31 31 Mar 2012

Normally when you use a Chip and PIN terminal, it tells you onscreen the amount that will be charged to your card. I think it would be very difficult for a crooked cashier to be able to steal money from you without it being displayed on the screen that you were being charged an incorrect amount, provided of course that they aren't able to obtain your card number which under normal circumstances they would not.

  Woolwell 22:35 31 Mar 2012

A monthly credit card or bank statement lists all outgoings and to me is much simpler than recording cash outlay.

  Batch 12:23 01 Apr 2012

Woolwell - isn't the whole point with cash that you don't need to record each spend as you implicitly reconcile it in real-time as you spend (i.e. change received = money proffered less cost of goods). You can't do that with electronic card payments, so to reconcile you have keep all the receipts and and then laboriously check them periodically against a statement.

  Forum Editor 12:41 01 Apr 2012

"you have keep all the receipts and and then laboriously check them periodically against a statement."

Well yes, but when you use a credit card you're spending someone else's money, and I would have thought you have a vested interest in checking how much you've borrowed.

It's pretty obvious that it's much easier to track payments you make in cash, but then with a credit card you're going to pay for the convenience of using it, and a part of that payment is the small effort of checking how much you've spent once a month.

  Pine Man 14:05 01 Apr 2012

Everything in excess of about £1 goes on my credit card. Last year my total spend on my main credit card was £18000. At the end of the year that meant I got £180 cash back at 1%.

So I have to keep the receipts for a while but for £180 it's a no brainer.

  Woolwell 16:39 01 Apr 2012

Batch - I go the hole in the wall and extract cash. I then pay a taxi and give a tip, get a haircut, put in a collection box, etc all paying by cash. I am not given any receipts. I know that I have been given the right change and that is all. When I get home I have to remember what I spent where otherwise I have no record on what I have spent it on. With a credit card I get a complete record and I get a receipt at the time. I haven't used the contactless part of my card as I haven't found it necessary.

  Batch 18:09 01 Apr 2012

Woolwell - horses for courses. I typically go to the ATM once (sometimes twice) a month and withdraw a good wedge. I don't see any value in having to remember what I've spent small sums of cash on. I've spent it and reconciled it at that instant, end-of. So what would I want to keep a subsequent record for?

FE - "Well yes, but when you use a credit card you're spending someone else's money....". One of the things I was trying to establish is whether bods that use DCs/CCs for low value transactions generally bother about checking it all off against a statement as I rather suspect that there's an awful lot of bods that don't bother. Although the view coming over on here is that the respondents would tend to check (as I would if I went down that route). But I wondered if there was some aspect that I was somehow missing.

And personally, for speed and ease of use I prefer cash for low value transactions. I cringe every time I see someone using a card at a self-service checkout and just how long it all seems to take. Although contactless may, at long last, eradicate most of that time lag.

Pineman - would it be unreasonable to assume that the number of low value transactions are v. high, but the overall value is relatively small? If one were to use, say, 80/20 rule (for the sake of argument). Then without all the low value transactions one would still get the vast majority of the cashback without having to track the high volume of transactions.

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