Why Does Card Payment Increase Unhealthy Shopping? Inattention to Health Risks

In the last three decades, the form of payment has undergone a major transformation. Now a majority of retail transactions are carried out through card payments instead of cash which had been the dominant form of payment for several centuries. Although sellers and buyers both have welcomed the cashless economic environment, an emerging stream of research has identified an unintended consequence of cashless payments: shoppers are more likely to spend money on unhealthy food items when they pay for their grocery purchases using plastic cards compared to when they pay in cash. Despite the seeming robustness of the effect, the psychological mechanism underlying this effect is not clear. We ran two studies including a skin conductance study to examine why mode of payment influences unhealthy shopping in grocery stores. Results suggest that the influence of mode of payment on consumer behavior is more pernicious than previously assumed. Mode of payment can influence psychological arousal, which in turn can bias shoppers’ attentional orientation to negative product attributes. The negative arousal caused by cash payments increases attention not only to negative monetary attributes such as price, but also to negative non-monetary attributes such as health risks of products. In contrast, paying by card reduces this negative arousal, which in turn, reduces attention to health risk of products. Thus, paying by cards (vs. cash) can increase purchases of unhealthy grocery products through an autonomous shift in shoppers’ attention to health risks of products without their awareness.