Writing paper checks at the cashier counter used to be the standard payment method for in-store purchases (second only to cash). Using these checks can be a bit inconvenient for those standing behind you in line, but we've all done it (or know folks who have).
However, this popular American habit is on the decline nationwide. In Q1 of 2014, point-of-purchase (POP) paper-based check payments fell by a whopping 12 percent — a trend that closely mirrors the corporate community’s rapid abandonment of check-writing for B2B transactions.
But whereas both companies and consumers are increasingly leaving check-writing behind, their motivations are very different.
For businesses, check payments carry significant "hidden" costs, with some estimates placing processing expenses as high as $20 per check (after factoring in gas mileage, postage and delays).
However, when talking about check payments at POP registers, cost isn’t really an issue. Consumers don't normally care about business-related expenses when making purchases.
So what is driving this trend?
Why American Shoppers Don't Like Using Checks at Point of Purchase
There are several reasons why consumers are writing fewer checks at the cash register.
Part of the answer has to do with sheer convenience:
- It's a pain to write out checks. Shoppers have to remember to carry their checkbooks around at all times. They must find a working pen. And they have to dot all the i’s, cross all the t's, and show a driver's license to complete each transaction.
- There is also probably a social element as well. No one enjoys holding up the line and receiving angry stares from impatient shoppers.
- Very few consumers enjoy manually balancing their checkbooks on a regular basis. This is especially true in a world where online banking makes accounting easy and automatic.
Other consumers are probably motivated for environmental reasons. Checks aren't green. They require paper, ink and even petrol (when mailing checks via post).
And don't forget that many stores don't accept personal checks at the cash register (bounced checks carry extra fees and penalties).
But arguably the biggest driver of check abandonment is the rapid rise of faster, cheaper and more convenient electronic payment options, including:
- Credit cards and debit cards
- Electronic checks
- Mobile payments
The above aren’t simply more convenient at point-of-purchase cashier registers; they’re also incredibly useful for online shopping. Consumers who embrace these electronic options benefit from a truly unified payment system that fits conveniently in their wallets or on their smartphones.
Should You Stop Accepting Checks at Your Store?
Paper-based checks are more expensive to process, carry greater risks and are worse for the environment. And on top of all that, many of your customers probably don't use this aging "technology" anymore.
So should you stop accepting checks altogether?
Ultimately, it's a personal decision. There are still shoppers out there who will never completely abandon paper checks until they absolutely have to. However, you should explore expanding the number of payment options you do accept, thus casting the widest net possible.
For tips on how to get started, use the free link below: