The end of bulging wallets and purses
ParcelHero’s Head of Consumer Research, David Jinks MILT, says within five years printed receipts, loose change, cheques and high value notes will be as obsolete as Green Shield stamps and 1/2p coins.
The technology developed for e-commerce payments is likely to end wasteful paper receipts, useless small change, cheques and even some bank notes inside five years.
The rise of debit cards, contactless payment technology and Pay Pal mean every aspect of the familiar store checkout payments will shortly be as obsolete as 1/2p coins, signing for a card payment or Green Shield stamps.
It’s time to bin receipts
It takes 12 trees to make 1 ton of unrecycled paper. Every year, British retailers hand shoppers 11.2 billion paper receipts, at a cost of £32m. The combined weight of all these receipts is over 7.5 million kg (over 7,300 tons). At a time when the Government and retailers are cracking down on environmentally damaging items such as plastic bags and cups, highly wasteful paper receipts must surely follow rapidly.
Assuming the majority of receipts are not 100% recycled, 11.2 billion receipts is the equivalent of 87, 000 trees felled a year simply to supply the UK with printed receipts.
Move beyond the UK and the sheer amount of resources used simply to produce paper receipts becomes astonishing. Over 250 million gallons of oil, 10 million trees and 1 billion gallons of water are consumed each year in the creation of receipts for the United States alone, generating 1.5 billion pounds of waste. Receipt paper demands in the US gobble 640,000 US tons (571,000 Imperial tons) of paper per year.
And worldwide the e-receipt pioneer Flux says 300 billion paper receipts are produced every year, consuming 25 million trees, 22 million barrels of oil (924 million US gallons) and 18bn litres (4.7bn US gallons) of water.
Small wonder environmentalists and indeed many retailers themselves are becoming increasingly convinced that paper receipts should be withdrawn. And this environmental impact is all the more concerning considering the solution already exist in the form of electronic receipts.
Many retailers are clearly aware of the impact of all this paper being used for little purpose. Argos, for example, not only offers email receipts, but its paper receipts are on FSC Mix paper: meaning a mix of Forestry Stewardship Council paper from certified forests, controlled wood and reclaimed paper. Many other retailers have introduced similar ‘greener’ receipts.
None the less, compared to e-receipts the consumption of the Earth’s resources in producing printed receipts is clearly extremely wasteful. Happily, technology is rapidly catching up with them, and the writing is on the wall, if not the FSC Mix paper, for the printed receipt
The electronic wallet
As the use of e-receipts become more widespread, some consumers are expressing concern about the loss of printed receipts; because they fear it will make keeping track of spending and expenses more difficult. Organisations such as Age UK are particularly worried about the loss of paper receipts for older shoppers, unfamiliar with keeping records online.
However, the solution might well be the online wallet. We are all already familiar with the option of emailed receipts from the likes of Argos, but these are as easy to lose, buried in your inbox, as printed statements down the back of the sofa. Electronic receipt wallets valid for High Street and online purchases mean that we will always be able to track down even the smallest receipt in the future.
Tesco, Debenhams and Topshop were amongst the early companies to experiment with e-receipts, and many local stores and petrol stations today give customers the option not to take a printed receipt. Companies such as Tesco make great play of the fact you can track your spending by seeing all your Tesco transactions in one place.
And Apps such as Barclays’ Launchpad can already store all your digital receipts together, ensuring shoppers never lose a vital receipt. Launchpad has introduced the system by adopting the innovative start-up Flux’s digital receipts system. Flux is already providing electronic receipt services for Starling bank, and has introduced e-receipts in Costa Coffee, Pod, EAT and itsu.
Says the company: ‘Flux is on a mission to digitise the world’s receipt data because we think it’s insane that in the 21st century the only way to see exactly which items you bought in the real world is via paper records!’
And a variety of other Apps, such as the US-based Shoeboxed, enable shoppers to scan paper receipts as well as store digital ones. Interestingly electronic receipts are also increasingly popular with people who are self-employed and have to keep proof of purchase for tax purposes. Long gone are the days when HMRC would only take hard copies of documentation, including receipts.
Remember you must keep your electronic receipt and a safe back up copy for six years if they are being submitted as part of your tax returns. It’s recommended your back up copy is stored in a separate system entirely, preferably offsite.
Returns, receipts for disaster?
Returned home delivery items can become a vexed issue if there is no accompanying receipt. E-Receipts are the perfect solution for all e-commerce returns and just as legally valid as paper ones as a proof of purchase.
Companies such as New Look offer the choice of using printed or electronic receipts. It says: ‘Simply show your e-receipt in store and we’ll process your refund as normal.’
Some retailers, such as Zara, go further; it actively promotes the use of the electronic receipt for returns. Says Zara: ‘You will find it attached to the notification e-mails you receive when your order has been sent, or in the My Account section in the details of your purchase. Please remember that the receipt is essential for returning or exchanging items. You can show it on the screen of your mobile device or print it.’
However, while Courts have accepted copies of receipts as legal proof of purchase, providing appropriate authentication standards have been met, there is still a concern amongst some retailers that electronic copies can be altered. This means some staff, and indeed some stores, are reluctant in practice to accept copies of receipts printed from e-receipts. As the use of e-receipts increases better staff training will hopefully eliminate these issues.
If this is not the case the pendulum will undoubtedly swing further in favour of e-commerce sales, and against High Street purchases, in order to eliminate returns problems.
Online shoppers already have a big advantage returning items compared to those who purchased their items in store: online purchases have a 14 day ‘cooling off’ period under the Consumer Contracts Regulations, within which an item may be returned for any reason. This does not apply to shop-bought items, which are only guaranteed a refund if they are faulty (under the 30-day return terms of the Consumer Rights Act.).
Of course, an electronic receipt is accepted as a proof of purchase for online returns for any reason and should be recognised for all store returns for faulty items as well. For more information about returns, don’t miss ParcelHero’s comprehensive refunds consumer guide.
Checkmate for cheques
Paper receipts are far from being the only traditional element of shopping that is facing its final checkout.
The cheque was first introduced 350 years ago but the impact of modern payment method means the number of cheques issued has collapsed from 4 billion in 1990 to just 405 million in 2017.
Back in 2008 the payments industry announced it would phase cheques out by October 2018. The Payments Council said cheque use was in ‘long-term, terminal decline’. It forecast cheque use would decline to 1.6 million a day by 2018, from 3.8 million a day in 2008.
In 2011 the Cheque Guarantee Scheme was scrapped, and it looked as if the cheque would indeed be bounced out of existence by 2018. However, in the same year, the Payments Council was forced into a change of heart by MPs who said no viable alternatives for the vulnerable and elderly were in place.
However, today no major UK-wide supermarket chains accept the payment method any longer, nor do most petrol stations and high street stores, due to the relatively high costs of processing them – around £1. Even though the cheque looks like surviving beyond the year of its planned demise, they are likely to be stubbed out within five years.
All change please
Cash now accounts for just 22% of purchases, according to the British Retail Consortium. That means time is running out for the humble penny as copper coins follow printed receipts and cheques into extinction. Inflation means the 1p coin is now worth less than the 1/2p when it was abolished in 1984. That means six in ten of UK 1p and 2p coins are today only used once before being put in a jar or discarded
Three quarters of all purchases are now made by plastic. And the future for small change looks even less certain as UK Finance also revealed an estimated 3.4 million people hardly used cash at all last year.
This year the Chancellor’s Spring Statement launched a Treasury consultation document about the mix of coins in circulation, which appeared to pave the way for the end of 1p and 2p coins.
The Treasury document said: ‘From an economic perspective, having large numbers of denominations that are not in demand, saved by the public… does not contribute to an efficient or cost-effective cash cycle.’
And many countries – including Canada, Australia, Brazil, and Sweden, have already cashed in their low value coins.
However, just as the Government wobbled over the future of cheques, it soon backtracked on any firm plans to scrap low value coins. A spokesman for the Prime Minister quickly stated: “One of the elements was whether the denominational mix of coins meets the public need. From the early reaction it looks as if it does.”
However, even the Bank of England’s official blog claims ‘As inflation steadily erodes the purchasing power of low denomination coinage, the case for its removal becomes stronger’. Referring to the previous successful abolition of the 1/2p it said: ‘Many of the arguments that were made in the early 1980s around the inflationary impact of removing that particular tiny coin are being made now. However, the evidence, including our own work on UK price data, suggests they are unfounded.”
With the Bank of England coming out in support of the demise of low denomination coins, change is certainly in the air for today’s coins.
Notes on notice
It may not only be small change whose number is up. Some bank notes may well also fold as more and more shoppers go cashless. The first to go is likely to be the £50 note.
The Treasury’s spring consultation document says the £50 note is rarely used for purchases and that money in long-term storage at cash processors is not good for the economy. It also stated: “There is also a perception among some that £50 notes are used for money laundering, hidden economy activity, and tax evasion.”
And even though the £50 note is legal tender, many shops actually refuse to accept them, particularly in payment for low value items. And stores are quite within their rights to refuse any sale.
The Bank of England’s web site says: ‘The current £50 note, featuring Matthew Boulton and James Watt, was issued on 2 November 2011. We will make a decision on when to issue a new £50 note, and whether to print it on polymer, in due course.’ Not exactly a ringing endorsement.
This lack of any positive statement on the £50 note’s future has fuelled speculation the £50 may soon be waste paper. Tellingly, according to official Bank of England figures, there were no new £50 notes made in 2016/17 or 2015/16.
And Peter Sands, the former chief executive of Standard Chartered, who is an adviser to the British government, says eliminating the £50 note will help to combat tax evasion. He believes that electronic payments have made the high value tender redundant, with most people only using cash to buy items such as coffee and food goods.
So once again e-commerce and electronic payments look like spelling a swift end for a venerable but little used method of payment.
Retail is in a state of revolution – and not only because of the impact of e-commerce. A transformation is also on the way for how we physically shop on the High Street. And it’s this imminent sea-change that could well spell the ultimate end for all the obsolete payment methods we have looked at.
Cashier-less stores now being introduced to the High Street by the likes of Amazon, Tesco, Sainsbury’s and the Co-Op mean it’s goodbye to printed receipts, as well as cash and cheques, in the next few years. Automated stores will not be able to produce printed receipts or accept cash or cheque payments.
Amazon Go cashier-free grocers introduced the concept of till-free stores in the USA. The shops use an App on your phone, simply monitoring what you have taken from the store and charging you accordingly.
And the idea has already been embraced by many of the leading UK supermarket chains. The Co-op has unveiled a new mobile App that allows shoppers to pay for purchases in the aisle and avoid visiting a till. The ‘shop, scan and go’ initiative is being trialled at the Co-op’s store in Manchester. Sainsbury’s is also in the process of trialling its Smartshop App that allows customers to pay for items on their phone, while Tesco has the Pay+ mobile wallet payment app so you can ‘shop like a pro’, as the advertisements would have us believe.
All of these solutions eliminate any need for the familiar but environmentally unfriendly printed receipt, as well as coins, cheques and bank notes.
ParcelHero believes the sensible money is on the end of printed receipts, cheques, low-value coins and high-value notes soon. Which will at least mean your next wallet will last a lot longer!