Innovations and Payment Systems

As stores speed up checkout, holiday shoppers risk overspending


A growing amount of research is finding that faster checkout makes for happier customers; but it also tends to significantly increase how much people spend.

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It’s getting easier to speed through checkout during the holidays and avoid lengthy waits at the cash register – but that can be a recipe for overspending.

Big box stores such as Target and Walmart are trying to ramp up sales and please impatient customers by investing in new technologies – such as in-store mobile checkout – that promise to make holiday shopping faster and more convenient.

But rather than try to speed-shop your way through your holiday gift list, you may want to pause and reassess how much is in your cart before you present your card or mobile phone for payment.

A growing amount of research is finding that faster checkout makes for happier customers; but it also tends to significantly increase how much people spend.

See related: Will mobile wallets make us poor?

Mobile payments can encourage feel-good purchases, impulse buys

Researchers at the University of Illinois, New York University and Nanjing University recently found mobile payments tend to boost the number of transactions stores record. People also tend to spend more money overall – especially on feel-good purchases, such as treats or entertainment.

“Switching to the mobile channel leads to more shopping overall, and it particularly affects more hedonistic shopping such as food, entertainment and travel,” noted study co-author Yuqian Xu in a news release. “But it doesn’t affect purchases like education or healthcare. So it’s changing consumer behavior.”

Other faster-than-normal payment methods have a similar effect. A recent survey by the British comparison site GoCompare found 17 percent of shoppers who tapped their credit cards or mobile phones on a contactless payment processor had a harder time keeping tabs on how much they spent. Meanwhile, 12 percent admitted they spent more on impulse when using contactless technologies.

Credit cards have also been singled out for years for prompting people to spend more than they would if they used cash. A number of studies have found people tend to spend more when using plastic – in part because it’s less painful to swipe or dip a card than part with cash. People tend to feel more connected to cash, by contrast, and to be more aware of how much cash they’re spending.

The ‘click-and-collect’ trap

Even payment methods that seem like they would limit what you buy – such as paying for purchases before you enter a store – can lead to overspending.

Many stores, for example, now let customers buy an item online and quickly pick it up at a store. Known colloquially as “click-and-collect” shopping, this payment method is more convenient than wandering through a store and then waiting in a long checkout line. However, research shows it can also prompt people to buy more than they would otherwise – in part because walking in the store gives people a second opportunity to eye the items on a store’s shelves.

study by the retail fulfillment company Order Dynamics, for example, found 37 percent of shoppers who ordered an item online and picked it up in the store wound up buying more than they planned. Shoppers who used click-and-collect more than once a year were even more likely to pick up more than they intended.

See related: Contactless cards get crucial boost as Chase embraces tap-and-pay

Beware of over-shopping

You don’t necessarily need to skip using faster payment methods or bring along cash to protect yourself from overspending. But you should be mindful of the temptation – especially if you’re finding that it’s easier than it used to be to pay for what you need.

If you still have gift shopping left to do this season, try not to let your eagerness to zip quickly through a store prevent you from thinking carefully about your purchases.

One benefit of standing in a long checkout line is that it gives you a chance to scan what’s in your cart and reconsider whether you really want to buy everything that’s in there. However, many stores are helping holiday shoppers skip waiting in those long lines by offering mobile checkout all throughout the store.

If a wandering cashier approaches you with a checkout-enabled tablet the next time you’re out shopping, don’t feel pressured to pay for your items right away. You may be better off pausing for a moment first so you can think through what’s still in your cart.

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