Not Paying Cash Means Buying More Junk Food

Governments have been trying a lot of new tricks lately to get people to eat more healthily, from calorie-count labels to taxes on soda to banning fast-food outlets from whole neighborhoods. This study suggests a simpler approach might work: It found people buy less junk food when they have to pay cash.

Donuts, ice cream, corn chips and the like are often an impulse purchase, Manoj Thomas of Cornell and his co-authors reasoned, and impulses are sensitive to the way they're paid for. Cash is quick and anonymous, but spending it makes clear what you are giving up. On the other hand, "the abstract and emotionally inert nature of card payments" the authors write, will reduce "the pain of payment."

Thomas and his collaborators studied grocery-store receipts from a thousand shoppers (I gather in upstate New York) from January to June of 2003. Consistently, they found, shoppers who paid by plastic (credit card or debit, it didn't make a difference) purchased a higher proportion of unhealthy, high-impulse "vice products" (ice cream, donuts, chips) than did those who paid cash. Later, the team tested their theory with a simulated shopping trip in the lab, where 151 Cornell undergrads had to choose among "virtue products" (rice, milk, baby food) and "vice products" on computer screens. Those who were sim-paying for their sim-food with sim-plastic, again, had more vice in their shopping carts than did those who were simulating a cash payment.

Interestingly, in a final experiment on students from Binghamton University, the researchers first tested for their subjects' different spending styles, sorting out the "tightwads" from the "spendthrifts." They found that the inhibition-loosening effect of plastic worked most strongly on the thrifty people. "Tightwads" who used virtual plastic made more vice purchases by far than did those who had to pretend to fork over some cash. There was no such effect on "spendthrifts."

Only 14 percent of American grocery store purchases are made with cash, the authors write, so they think their findings might be relevant to rising levels of obesity. At the least, it's a good supporting argument for an idea Dan Ariely proposed in his first book, Predictably Irrational: Credit cards with pre-set limits for donuts, Twinkies, and other impulses.

Thomas, M., Desai, K., & Seenivasan, S. (2010). How Credit Card Payments Increase Unhealthy Food Purchases: Visceral Regulation of Vices Journal of Consumer Research DOI: 10.1086/657331

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