You’ll value your purchases more
Volunteers in a study published in the Journal of Consumer Research bought a coffee mug for $4.94 (marked as $2 off the original price) using either cash or credit. Two hours later, the researchers told them to pick a price to sell back the mug. Those who’d used cash asked for almost $3 more than those who’d paid with credit. “You feel something when you physically part with your money, and there are different levels of pain depending on the type of payment,” study author and University of Toronto assistant professor of marketing Avni Shah has said. Watch out, though—there are some times when it’s actually better not to pay with cash.
Your purchases will feel more meaningful
In a follow-up, the same University of Toronto researchers gave people either cash or a voucher to donate to a charity of their choice, to find out if the reasons people valued the mugs more because of the effort and fees related to finding an ATM. Turns out the first study’s findings held true: those who’d donated cash felt more connected to their chosen charities and less connected to the ones they hadn’t picked. Cash might help you make more thoughtful, meaningful shopping decisions, Shah says.