Cash Is Still King For Many Phoenix Consumers, Businesses

Published: Thursday, December 15, 2016 - 2:19pm
Updated: Thursday, December 15, 2016 - 3:16pm
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(Photo by Christina Estes - KJZZ)
Pete's Fish & Chips has an ATM for customers who don't carry cash.

'Tis the season for spending. The National Retail Federation expects sales in November and December to increase about 3.5 percent. The group’s annual consumer survey finds debit and credit cards are the most popular payment forms — with only one in five shoppers planning to use cash. But in some places, dollars remain dominant.

Cash Only

Most restaurants are proud of what they serve and that applies to Pete’s Fish and Chips.

“Best onion rings in town,” said owner Kathy Adams, who is equally proud of what they do not serve.

“We don’t serve ketchup! We serve Pete’s sauce,” she said. “We make it.” 

They also don’t serve credit- or debit-card users. When Adams’ father, Pete, opened his food stand in Phoenix, no one even had credit cards. Fast forward 70 years. Pete’s has grown to 8 Valley locations and not a single one will take a single card. 

“We don’t owe anybody, and no one owes us anything,” Adams said. “We close our books, and we start fresh the next day.” 

They also don’t have to pay fees that banks charge retailers. They’re typically 2 to 4 percent of each transaction.  Mesa resident Brandon Louie is a fan of Pete’s signature meal and its business model. 

“I’m not in favor of a cashless society, because I think it hurts the poor,” he said while munching on fish and chips.

What’s In Your Wallet?

Louie says he carries cash every day, so do nearly 70 percent of consumers, according to the Federal Reserve Bank of San Francisco.

“For a lot of consumers, there’s a tipping point,” said Wendy Matheny.

She said the tipping point for the average person to choose a credit card over cash is about 25 dollars.  Matheny co-wrote the Fed’s report on the state of cash released last month. It’s based on diaries in which people tracked what they bought and how they paid. 

“Cash is still the most frequently used payment form,” she said.

But cash’s share of payments has dropped 8 percentage points since the Fed’s last consumer payment diary in 2012. Still, it doesn’t mean cash is dying. Matheny said growth continues in what the Fed calls “currency in circulation.”

“It’s basically the difference in what comes in from banks and depository institutions and what we send back out, what they’re asking from us,” she explained. “And so what we’ve seen over time is the demand going out has actually increased.” 

Why Cash Demand Increases

Sometimes that’s attributed to natural disasters — for example, people may rush to withdraw cash if they know a hurricane is heading their way. 

Sometimes, Matheny said, demand spikes when people in other countries lose confidence in their money, “But I might hold on to U.S. dollars because I know the full faith and credit of the United States government is backing this one hundred dollar US bill whereas my day to day currency may not.”  

And, sometimes demand jumps based on the time of year — like Christmas.  At Pete’s Fish and Chips, the desire for dollars never drops. 

“We still believe cash is king,” Adams said.

She does her best to get that message across. Painted on the buildings and plastered on menu boards are the words “Cash Only.” Most people catch it, but for those guests who don’t — they’re invited to use the ATM parked near the register. 

Did You Know?

  • Phoenix is home to a cash processing center where banks make deposits and withdrawals. To go along on a KJZZ tour, click here.
  • The $1 note makes up about 45 percent of currency production.
  • The $20 note has a portrait of Andrew Jackson on the front and a vignette of the White House on the back.
  • The $100 note is the largest currency in circulation today.
  • The U.S. Treasury stopped producing the $10,000 note in 1969.

Test Your Cash Knowledge with this quiz.

7 Things You May Not Know About Money.

Take A Closer Look At Cash with this gallery of currency.

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