The Cashless Trend

Several organizations are making changes to go cashless or at least pilot the concept, including Massachusetts’ MBTA, American and United terminals in select airports (Miami being the latest) and Shake Shack’s recently opened cashless location in New York, to name a few.  Living in the Seattle area, I have access to two very publicized cashless pilot stores – Starbucks and the new Amazon Go store – so I thought I’d go check them out.

Starbucks Cashless Pilot Store

The Starbucks cashless pilot store is located in the Russell Investments Center in downtown, Seattle. This location is, ironically, reached from the street by passing through a Chase bank lobby and a row of ATMs. Credit, debit and gift cards are accepted as well as mobile pay through the company’s app.  To me, the checkout experience felt no different than checking out in any other Starbucks location – as a frequent patron, I rarely see customers paying in cash when I visit.
Out of curiosity, I also stopped into the Starbucks directly across the street from the pilot store (because it’s Seattle…), and I spoke with one of the baristas there.  He estimated he hears two to three complaints each day from customers who’ve tried to use cash at the pilot store and couldn’t.  This figure constitutes a pretty small percentage of customers who would visit a busy location like this, but as with any change, not everyone will embrace it.

Amazon Go

The new Amazon Go store (also located downtown Seattle) takes cashless to another level by removing the checkout process altogether.  After downloading the app, customers are prompted to connect their accounts and payment methods to their Amazon Prime accounts/payment information. Upon downloading the app, customers will receive a QR code. They are then prompted to scan their QR code in the app upon entering the store.  This code needs to be scanned for anyone walking into the store— if multiple people will be using one person’s account, each individual will need to scan the QR code from the device connected to the account they’ll be using.

The Cashless Trend: Amazon Go
A view outside the Amazon Go store

The Cashless Trend: Amazon Go
The view from inside the Amazon Go store

While shopping, customers simply take the products they want to purchase from the shelf, and then walk out of the store.  No product scanning or checkout needed.  It’s that simple.  A receipt appears in the app within 2-4 minutes and another one is emailed within 15-30 minutes.
The Amazon Go app tutorial indicates that as items are removed and put back on the shelf, they are added and deleted from your virtual cart.  While this is the process in the background, customers are not able to see their virtual cart to verify this, which means that you don’t see the total of items in your cart until your receipt is available after leaving the store.  While easy to keep a mental tally when shopping by myself, this could prove to be more difficult to when multiple people are shopping with one account.
Overall, shopping at the Amazon Go store was a great experience.  The biggest questions that I’m left with are:

  1. What happens if someone’s payment fails? Customer’s accounts are tied to their Prime accounts, so there’s likely a method of recourse through this.
  2. How great is the risk of fraud with customers placing returns? To obtain a refund, you simply swipe left on the item in the receipt you want to return and the refund is issued immediately. No returns are required.  This return process is essentially based on the honor system. It appears that Amazon has taken the approach that most people won’t take advantage of this, and the company feels the risk here is relatively low.

The Cashless Trend: Amazon Go Receipt
Screenshot of my Amazon Go receipt

The Cashless Trend: Amazon Go Receipt
Screenshot of my Amazon Go refund receipt

One could argue advantages and disadvantages of going cashless. Certainly not every customer will always be on board; but there is definitely a trend in moving in this direction.  Many experts feel that cashless is the future. They believe that cashless will continue to increase in popularity across multiple industries.  It is a trend to watch as organizations look to ensure a positive customer experience, keep payments secure and keep risk and fraud mitigation strategies on par with these advancements in payments.
For further discussion, contact Tina at [email protected].

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