Download This PaperCost of Cash: Evidence from Cashiers
58 Pages Posted: 17 Apr 2020 Last revised: 15 Mar 2021
Date Written: March 1, 2021
Abstract
An important but overlooked cost of payments in retailing is the cost on checkout cashiers. This paper examines the compensating wage differential that cashiers require to handle payments in cash. First, a multi-country panel data study shows that cashier wages increase with retail cash usage, consistent with cashiers requiring compensation to handle cash. Second, in a discrete choice experiment where supermarket cashiers chose between collecting card and cash payments, 8 of 10 cashiers preferred card to cash. Among those who preferred card, the median cashier required a wage premium of S$37.50 (US$27) a month to handle cash. The premium was lower among cashiers who are local, less risk averse, and younger. Third, in a laboratory study, subjects traded off earnings against stress. With higher frequency of cash payments, high-earners experienced greater physiological stress than low-earners. Earnings also increased with abilities in arithmetic and coping with stress. Collectively, these studies show that cashiers require higher wages to handle cash payments, in part due to higher stress. We offer policy, managerial, and research implications for job design, payment systems, and workplace stress.
Keywords: Stress, Compensating wage differential, Payments, Cash
JEL Classification: J31, E42, M52
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