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Woolworths clarifies cash policy amid social media uproar
It is cheaper for any supermarket to disburse cash from a till (including interchange) than to actually transport it and bank it.
Woolworths. Image Supplied
Despite a fair amount of consternation regarding the ostensible changes, Woolworths Food customers have no need to worry! The retailer’s stores will still accept cash as well as card payments as legal tender.
The furore began this past weekend when a customer snapped a signboard of some sort. It states that: “From 16 January 2024 we will no longer accept cash, as we’ve joined a global responsible business initiative that prioritises customer and staff safety. We’re sorry for any inconvenience.”
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Peculiarly, the most recent Woolworths ‘Good Business Journey Report’ has not a single mention of the word ‘cash’. (It has only a single mention of the word ‘responsible’.)
The problem, of course, is that the Woolworths poster carries no discernible branding besides the Woolies logo. This led many on social media to assume that the supermarket would no longer be accepting cash, which caused a sizeable storm on social media.
Coffee shop concessions
The truth is that it will, in fact, no longer be accepting cash at its W Café outlets from later this month. This was confirmed by the brand’s social media accounts during the weekend.
It started introducing these changes towards the end of 2023 with certain cafes no longer accepting cash in the latter months. These, seemingly, did not receive the social media fanfare that this most recent round did.
W Café is the concessionary outlet chain it operates adjacent or inside its premises across the country. These are coffee shops, not supermarkets. In the last financial year, these concessions consumed over R800 million of goods from Woolworths Food outlets.
The stock is ‘purchased’ and then prepared for sale in its stores. The margin is probably 40-50%.
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Given the level of cash usage for grocery purchases, it is incredibly unlikely that any supermarket, least of all Woolworths will say ‘no’ to cash purchases any time soon.
If one were to hypothesise over something like the Shoprite/Checkers group, it is entirely likely that the former will take cash for many years to come, while the latter may be more circumspect.
The cost of cash
W Café is not the first outfit to ‘prefer’ cards. Starbucks operations in the country have refused cash purchases since late last year. Reportedly, PNA will soon no longer accept cash. With W Café, that’s three.
It’s no surprise, given that the cost of accepting cash is increasing almost monthly. Given the immense levels of risk in transporting cash, holders of it will do anything they can to reduce their holding.
Any wonder why supermarkets will offer anyone cash at till at a fraction of the normal rate of withdrawing money?
It is cheaper for any supermarket to disburse cash from a till (including interchange) than to actually transport it and bank it.
The issue is that these decisions from ‘fringe’ retailers/coffee shops will sooner or later start to become the norm in upper-middle class South Africa. When the W Café next door stops accepting cash, what’s to stop the independent spot a few doors down?
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The decision (and that of Starbucks, one guesses) has caused a huge amount of consternation. The Reserve Bank maintains that “all banknotes issued by the SARB [South African Reserve Bank] remain legal tender and retain their respective face value”. Notably crypto assets are not legal tender.
This could prove to be a problem in the weeks and months to come as more retail outlets elect to no longer accept cash. Given the above, this is not technically legal. But is it practical?
This article was republished from Moneyweb. Read the original here
