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Several months ago, Walmart introduced a “Pay with Cash” option for online purchases. This innovative program is pretty simple—consumers place an order online and then go to any store within 48 hours to pay for the purchase. According to the FDIC, 1 in 4 US households either do not have a bank account or credit card, or have limited banking options. Typically these households would be unable to order products online, but Walmart’s pay with cash option opens the web to these millions of consumers. But are people taking advantage of the program?
According to the Summer 2012 Online Shopper Intelligence survey, 16% of Walmart.com purchasers have opted to use the “Pay with Cash” option. I expected usage to be higher among lower income households who likely have more limited access to banking and credit, however usage appears to be highest among households with an income of $100k or greater.
When asked why they chose this payment option, the majority of consumers stated that it is easier to manage their budget if they pay in cash. Only 14% of “Pay with Cash” users indicated that they did not own a credit or debit card. It seems that instead of the intended audience, Walmart is attracting budget conscious consumers with its “Pay with Cash” option.
The good news for Walmart is that 80% of consumers had a positive experience using “Pay with Cash.” In fact, 1 in 4 said they would use this payment option again. Even more important from Walmart’s perspective is that 30% of consumers actually purchased more items when they went to pay for their online order. This is the holly grail for retailers—increasing order size while making shopping more convenient for the consumer!
With happy consumers and a larger pay day for Walmart, it appears that “Pay with Cash” is a win-win. I am curious to see if other brick and mortars follow suit. And what about online pure plays like Amazon who cannot offer this payment option? Pay with Cash might just be the ticket to Walmart closing the gap between itself and its largest online competitor. Will you give Pay with Cash a try for your next online order?
Debra Miller Arbesman is senior associate, retailer and consumer products at Compete, a Kantar Media company that helps brands improve their marketing based on the online behavior of millions of consumers.