September 4, 2014
Cash on life support? Don’t cue up a funeral dirge just yet.
While some (can you save Visa? MasterCard?) are checking out burial plots for cash there are number of recent events that prove that is not the best use of their time.
First, we learn that Home Depot has now joined the ranks of Target, PF Chang’s and Neiman Marcus in having their credit card files breached. So more of their customers are paying with greenbacks.
Second, the Wall Street Journal had a front page article stating that with all the credit card problems there is now a renaissance in the use of “knuckle busters”. For readers not of a certain age, knuckle busters are mechanical devices on which a merchant places the credit card, layers on a small stack of thin plan and carbon paper and then moves a slider back and forth across the paper, imprinting the card's embossed information. Security can be improved but with the extra labor and costs cash is a more attractive alternative
And third, this past weekend, making a $10 purchase at a local mom and pop retailer I gave the clerk $20. She gave me $10.50 in change. I asked if the fifty cents was a senior discount. She said no, it was for paying in cash. That’s an idea that is catching on.
Earlier this year the Federal Reserve Bank announced that in the last year currency in circulation has again increased, 8%, and now stands at $1.29 trillion. This cash is not going to be buried; it is going to be used in commerce.
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