The cashless society: Checks become of thing of the past

"I don't use the debit card to buy groceries," declared Iannucci, 67. "I never use it to buy gas. Never, never, never. I just don't have full faith in it."

For better or worse, the "cashless" society is slowly becoming a reality. Today, more often than not, Americans use plastic rather than cash or checks to buy everything from clothing to groceries, according to the American Bankers Association.

Cash and checks now account for just 47 percent of all purchases in stores, falling from 57 percent in 1999 and 51 percent in 2001. Today, we can use cards to pump fuel, feed parking meters, buy a Big Mac, grab a Coke from a vending machine or gamble at a casino. Younger people are more likely to use plastic and many, like Lepore, are ditching cash and checks altogether.

People are using cards even for very small purchases, which in the past almost exclusively were made with cash. MasterCard customers reported using debit cards for about one-third of all of their purchases of items costing $20 or less last year. That is a 61 percent increase since 2001, according to the company. Louise Gustafson, assistant manager at a candy store, knows the drill well. "Oh sure, they come in all the time and charge 59 cents or 79 cents on their cards," said Gustafson, as she kept a watchful eye on customers drooling over candy buttons and Sugar Daddies and Gummy Worms. "They don't carry cash ... and they have to have their candy!"

Her boss, Pon Sitandon, recalled an all-time low for a treat purchased with plastic.

"It was 15 cents for a junior gumball," she said.

"It's all about convenience," Sitandon said. "Yes, convenience is good, but sometimes we abuse it." Sitandon herself admitted to once paying for a $2 cup of coffee with plastic. "It was kind of embarrassing," she said.

Richard Feinberg, a professor of retail management at Purdue University, has seen the evolution toward a cashless culture in his own family.

"I don't believe my grandparents ever used a credit card," he said. "My parents used credit cards, but never debit cards. And I won't pay cash for anything." But the transition is happening less quickly than many thought, Feinberg noted. "Twenty years ago, people were predicting that no one would be using cash or checks within five years. So this transition has been long and slow. But we're definitely moving in that direction."

Marian Calabro, whose New Jersey company, CorporateHistory.net, writes and produces business profiles, likened the discussion to the "myth" of the paperless office.

"It's a figment of our collective imagination," she said. "Yes, we are seeing less cash. But will there ever be no cash? Never. Cash is tangible. Cash feels good in the hand. Cash is what all of these other things stand for." Research conducted during the past few years does show, however, that cash no longer is king for consumers and handwritten checks are falling out of fashion as well. Driving that trend is the emergence of debit cards, which with a quick swipe of the hand electronically deduct funds from checking accounts.

More than 30 percent of purchases in stores now are made with a debit card, compared to 21 percent four years ago, according to the Bankers Association. Credit cards account for about 21 percent of purchases in stores, a figure that has been holding steady, the group reported.

Joyce Gioia, a business consultant in North Carolina, is a big believer in the cashless culture.

"I can go across the country now with $20 or $30 in my pocket," said Gioia, an author and public speaker. With a debit card, she added, "You no longer have to go to an automatic teller to get money. It's certainly faster to get in and out of stores. And you don't have to worry about tracking what you are spending on a moment-to-moment basis."

But perhaps you should, others said.

"The idea that people can put a card into a slot machine and mindlessly feed money into it is a horrible thing," said Rob Bennett, who publishes and writes a daily blog for the Web site PassionSaving.com.

Bennett warned the convenience of the debit card in particular may cause people to lose sight of their spending.

"I have shied away from the debit card for just that reason," he said. "It's an abstraction. When you are planning to spend $100 in cash for dinner, you feel guilty. You think, 'Maybe I'd better get the cheaper wine.' With a card, you just forget about it."

Bennett said he typically uses a Discover card "that gives me a 1 percent kickback on everything I spend" and pays off the bill each month.

Martha Turner of Sacramento, who works for a state program that aids victims of crimes, relies on her good old checkbook to pay for most things.

"When I write checks, I have a paper trail, and I like that," she said. "It's bookkeeping to me."

Turner, 50, did have a brief ride on the debit-card bandwagon. "I definitely spent more, and the money was harder to track," she said. "So I went back to writing checks."

Iannucci, a retired middle-school principal, had a similar experience. "I worry that I'll forget to write down what I've bought," she said. Writing checks and counting cash, she said, also feels more personal and interactive than shoving a card into a machine.

In general, Gioia said, retailers love debit cards because checkout lines move faster. "It's quicker, it requires fewer skills on the part of the cashier and it reduces the number of people needed to serve as cashiers," she said.

But AARP warns its members that customers who use the cards may have less protection if something goes awry with a purchase. Banks may be reluctant to reimburse people for items that never were delivered, are damaged or don't work properly, the organization points out on its Web site. Banks may also charge monthly fees, as well as penalties for dropping below a required minimum balance.

Though a true cashless society may not be in our immediate future, some of the resistors are feeling the pressure to conform. But the financial dinosaurs do have their allies, including members of the Professional Numismatists Guild. The Numismatists are specialists in rare coins and money.

If cash disappears, "whose portrait do you want on your Visa card?" the Guild asks in its position paper on the subject. "How would you stash away a few dollars in a piggy bank? And when the Tooth Fairy visits, will children find a MasterCard under their pillows?"

(Distributed by Scripps Howard News Service, www.shns.com.)

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