Cash makes a comeback

The rise of plastic may have killed off the humble cheque, but cash is proving hardier.

by
Last Updated: 31 Aug 2010

It seems shoppers are choosing to abstain from their card-happy habits and are returning to cash, as the economic tide gets tougher. The British Retail Consortium says cash is being used for 60% of all checkout transactions, up from 54% last year. That familiar fearsome combo of household bills, rising food and fuel prices and concern about job security has apparently had people leaving the cards safely at home and going back to hard currency instead.

It makes sense. Taking on debt has suddenly become a major concern, especially when compared with the recent ‘your heart's beating so you qualify for a loan' approach to credit. Without plastic, if you've only got £20 in your pocket, it's impossible to come home ruing the fact you just splashed 400 notes on that ‘must-have' jacket and bag combination, when you'd only popped out for a packet of batteries. Of course, that's not the only reason shops would be happy to for the charade to carry on: cash is expensive to handle, and can go walkabouts all-too-easily via carelessness or theft.

Meanwhile the cheque, a veteran of payment since 1659, is in terminal decline - the UK Payments Council reckons that by 2016 it will be involved in only one payment in 50. Much of the high street, including Tesco, Asda, Boots, WH Smith and M&S already refuse to accept them.

According to Debenhams' chief exec Rob Templeman, people at his stores are ‘already paying much more in cash'. He isn't complaining: Debenhams' customers also seem to be ‘trading up', treating themselves to its designer offerings, and this has helped the store claw back market share from its main clothing rivals. Like-for-like sales in the year to August 30 fell by 0.9% - a far smaller decline than the recent performance of Next and M&S. This is a rare piece of positive news from the beleaguered chain, which only a year ago reported its lowest-ever share price, shortly after returning to the stock market from the hands of private equity. 

So the a tale of the credit crunch continues to be one of winners and losers. While credit card fraudsters are suffering, it's good news for buskers and beggars.

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