Being in Vegas was a vivid reminder that the further someone is away from actual cash, the more likely they are to spend. The only place cash was accepted in Sin City was to buy poker chips. It’s far easier to toss one of those on the table than a $10 bill, and more likely that you’ll forget it’s real money you are playing with.
The same principle applies to credit cards — it doesn’t feel as real to swipe as it would to pull bills out of a wallet. It’s true for credit cards, too — which in part is why retailers push them. Buying with either type of card is less painful (in the short term) and more likely to encourage purchasing. Even writing a check is one step removed from cash and often makes big payments like taxes or a mortgage more palatable than handing over a stack of real bills.
There are many ways to encourage spending or giving. Move away from cash and accept electronic payments. Create a longer time horizon between payments, such as offering annual plans. Consider subscriptions, automatic renewals, or automatic monthly payments. Allow people to buy “points” to use instead of currency. Combine services into a package so your customer only has to make a single money decision.
Design your financial transactions like poker chips to make this behavioral phenomenon work on your behalf.
