A study by researchers from the University of Adelaide found that when using cashless methods of payment, individuals tend to spend more when purchasing. But the positive effect does not translate to donations and tips.

“Against our expectations, we found that cashless payments do not necessarily lead to greater tips or donations, in comparison to cash,” says University of Adelaide PhD Student Lachlan Schomburgk, who led the study.

“This indicates that traditional cash-based ways of collecting money, such as tipping jars and spiral wishing wells, are just as effective as cashless point-of-sale terminals to collect tips or donations.”

For charities, the study says it is important to realise that traditional cash-based ways of collecting money are just as effective as cashless point-of-sale terminals to collect donations. Clearly, there are benefits to having alternative payment methods available, as consumers may not always carry cash. Thus, going forward, we recommend charities as well as employees reliant on tips to avoid going completely cashless.

The study, which was published in the Journal of Retailing , also provides useful insights for businesses and policymakers.