Yahoo Finance Cashless warning after Aussie pays $1,300 for a sandwich: ‘Shocking’
Finance guru Scott Pape is urging Aussies to slow down and double check their tap-and-go payments.
Tap-and-go payments have exploded in use since the pandemic, with Aussies among the biggest users of contactless payments in the world. But an Aussie finance guru is warning cashless payments can come at an expensive cost if you’re not careful.
The Barefoot Investor Scott Pape is urging Aussies to slow down and double-check how much they are paying before tapping after a man was accidentally charged more than $1,000 for a sandwich. Pape said he received the “shocking” letter from a reader of his column, who said her husband was mistakenly overcharged at a local bakery.
The reader said he did his “usual routine” of ordering, tapping his card, entering his PIN and getting his chicken sandwich for the day. But he later noticed he had been charged $1,300, not $13, for the sandwich by the bakery.
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“He called the bakery, thinking it was a mistake. However, the owner accused him of being a scammer and refused a refund!” the reader said.
“He then disputed it with the bank. The bank said that entering his PIN meant he had authorised the charge. So we’re now out $1,300 for a sandwich!”
Pape encouraged the reader to gather evidence and get the bank to verify the merchant was the bakery and print off a statement.
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“I’d hand it to the bakery and ask very politely that they reverse the transaction,” he wrote in his latest column. “And if they refuse, I’d tell them that your next stop is to the police station where you’re intending to press charges for theft.”
Pape shared he was guilty of “tapping” and “going” and said he never got receipts after making purchases at the grocery store.
He recommended people enable the feature on their phone and Apple watch that displays transactions as soon as they are made.
The Australian Competition and Consumer Commission said Aussies should first contact the business itself to fix a problem.
“Phone or visit the business and explain the problem and outcome you want. Do this as soon as possible,” it said.
The share of consumer payments made using cash has plummeted from 70 per cent in 2007 to just 13 per cent in 2022, according to Reserve Bank of Australia data.
Along with the potential to mistakenly overpay when using cashless methods, some research also suggests people are inclined to spend more money when paying via card rather than cash.
This is known as the "cashless effect" with researchers finding the "pain of paying" is greater when you use cash and physically count out your money and hand it over. In comparison, cashless payments don't require you to lose something tangible and you can simply tap and go.
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