Does Paying With Cash Increase Your Emotional Investment In A Purchase?

Say you go to the store with a friend and you each buy the same lamp for $150. The only difference is you pay in cash and your pal pays with plastic. The dollar amounts are the same, the purchased product is identical, but a new study finds that your levels of emotional investment in that lamp are likely different.

This is according to researchers from the University of Toronto, the University of North Carolina – Chapel Hill, and Duke University’s Fuqua School of Business, who recently published their findings in the Journal of Consumer Research.

Over the course of four tests, the researchers compared the post-transaction connections of shoppers who made purchases with debit or credit cards with those who went the cash/check route. In the end, they found that cash-payers had an increased emotional attachment to their purchase, that they were less likely to consider the alternatives they didn’t go with, and were more likely to be a repeat buyer.

For example, subjects of one study were each sold mugs for two dollars, with half directed to pay in cash while the other half were required to use credit or debit cards. When the subjects were later asked to sell those mugs back, the cash-payers asked for an average of $6.71 while those who paid using plastic only sought an average of $3.83.

Subjects in a second test were given either $5 in cash or a $5 voucher, then asked to donate those funds to one of three charities, none of which were known to the subjects in advance. They were subsequently questioned about their feelings of connection to their chosen charity and those who used cash expressed a slightly higher level of connection.

They were also asked about their sense of connection to the charities they didn’t choose. Here, the cash-users felt significantly less connected to the non-chosen alternatives than the plastic-users.

It’s worth noting that these subjects, unlike those in the mug test, were not using their own money, so it appears their sense of connection/disconnection may be related to the method of purchase.

“The form of payment clearly influences the subsequent value of the purchase to the consumer, even when the objective monetary cost remains constant,” conclude the study. “Using cash or check seems to increase the psychological ‘pain’ or sacrifice of the act and creates more affinity with the product or brand.”