Is Cash Dead or Just Temporarily Ill?
By Melissa Chefec, Business Development Manager
You go to the deli to buy a sandwich, chips and a soda and it comes to $13.20. You give the guy $15 and he gives you back $1. You ask, “hey, what about the 80 cents?” to which he replies, “we don’t have change.”
You need quarters for the washing machine at the corner laundromat. You go to the nearest bank with ten bucks for a roll of quarters only to be turned away because you don’t have an account there and they are not giving change to non-customers.
You go to a boutique in your neighborhood to buy a new shirt only to learn they don’t accept cash.
What’s going on? Is cash no good anymore?
What’s the problem?
One might say that this is nothing new, that banks and other credit entities and retailers have been trying for years to get people to go cashless. Banks have been building their digital offerings to allow people to complete many transactions without cash or even without leaving their homes. Retailers have joined in on the cashless game with their own branded credit cards and most willingly accept a wide variety of “plastic” or digital wallet options. People exchange money via Zelle, Venmo and other person-to-person transfer technologies all the time.
However, added to the mix right now is the coronavirus pandemic, and with that, money is being perceived as dirty and potentially riddled with germs that could cause COVID-19. Whether it’s true or not is unclear, but it is, nevertheless, a perception held by some. Moreover, during the pandemic, many people are keeping a very low profile and not shopping as much or eating out at restaurants. Less commerce means less cash and coins in circulation.
In fact, it has been widely reported in the mainstream news that there is a coin shortage happening right now in the US. As reported by Fox News, “Coin shortage hits retailers, laundromats, tooth fairy. The US Mint and Treasury Secretary Steven Mnuchin have urged Americans to use coins or turn them in to banks to help.” The whole supply chain and normal circulation of coins has been completely disrupted by the pandemic and experts say that, while there are enough coins in the system, the slowed circulation has reduced availability in some areas.
So, cash may not be dead yet, but it has certainly fallen ill because of the pandemic, and a coin shortage is one of the prevailing symptoms.
MKP communications inc. is a New York City-based communications company that delivers spot-on strategy, smart, fresh creative, and flawless execution, exclusively for financial services clients.