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UK facing 'cash crisis' despite cashback schemes, warns Which?

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·3-min read
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Cash crisis
A new scheme allows people to check their balances and get cashback of up to £50 at the till without buying anything from the store, but this is still not enough to avert a cash crisis. Photo: Getty

A new scheme that allows consumers to request cashback in shops without making a purchase is not enough to prevent a "cash crisis" in the UK, consumer group Which? has warned.

Just one in six (16%) people knew about the cashback without purchase scheme four months after its launch, according to a survey of more than 2,000 people.

Of those who were aware, only 31% have used the scheme to withdraw cash — equivalent to just 5% of the UK population.

This suggests that the scheme is not enough to protect access to cash for people who rely on cash as more bank branches and ATMs are closing across the UK, according to Which?

The scheme allows people to check their balances and get cashback of up to £50 at the till without buying anything from the store.

People can withdraw cash using chip-and-pin, contactless, Google Pay (GOOG) or Apple Pay (AAPL). The service will only work with debit cards issued in the UK.

Almost half (46%) of people who said they were unlikely to use the service said that the cashback without purchase scheme would not be a convenient way to access cash.

Read more: Only one in 10 UK small businesses have moved online despite pandemic push

Some 17% said they would be put off by the lack of privacy when withdrawing cash and one in six (16%) would be "worried about security issues taking out cash in this way".

A quarter (25%) of people who said they are unlikely to use the service, were concerned that it would feel unfair to the shop or business to handle the cashback service.

Any amount from 1p to £50 can be withdrawn. However, a third (33%) of consumers stated that they would not be comfortable taking out £50 in this way.

In 2021, the UK government changed legislation in order to allow people to request cashback from local shops without needing to make a purchase or pay a fee.

The introduction of the service is the only tangible action that the government has taken to protect access to cash, according to Which?

Cash machine network LINK recently announced that the service would become available in 2,000 shops across the country via PayPoint to support access to cash.

Which? said it welcomed the decision by major banks to share services to help people and businesses maintain access to cash. However the group said banks will need to demonstrate that these measures deliver what is needed.

Read more: Facebook and Twitter failing to tackle fake review factories

Jenny Ross, Which? money editor, said: “Schemes like cashback without purchase have a role to play to protect access to cash for those who rely on it, but they won’t be enough on their own to plug the gaps in the UK’s fragile cash system.

“Our research highlights clear limitations of these schemes, with very low awareness and uptake among consumers, and many people viewing cashback as an inconvenient and insecure way to access cash.

“It’s been almost two years since the government promised to legislate to protect access to cash, so it must move swiftly to ensure that consumers will continue to be able to access cash for as long as it is needed.”

Watch: How to save money on a low income

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