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Recently, I upgraded my wireless phone. My previous PDA, which I had replaced once already when the touch screen mysteriously stopped responding, developed a serious problem: The USB port through which the charger connected suddenly broke, leaving me with what would be a dead phone as soon as the battery discharged. At lunch time, I hurried to my wireless carrier’s nearest outlet and signed up for an upgrade, leaving me with a stylish Blackberry in my pocket and the promise of a fairly significant rebate from the company.
When the rebate finally arrived, I opened the envelope expecting a check. Already, in my head, I was making plans to go to the bank and cash it. You can imagine my surprise, then, when what I found inside the envelope was a Visa card.
Whether the rebate I was to receive was specified up front as coming in this form, I don’t recall. The immediate reason for sending a Visa card rather than cutting me a simple check is abundantly clear. I’m quite sure the company hopes some small portion of my card’s available balance will be left over when I make a purchase. No doubt there is someone at the accounting department at my wireless provider who is even now ticking off in his head the leftover dollars and cents from various balances that will never be spent. Think about it: If you know your “promotional Visa card” has a balance of $100, and you purchase something worth almost but not quite that much, are you really going to ask the clerk to charge, say, $2 and change to one card, then pay the remainder of the overage some other way?
Especially in today’s tough economy, this type of maneuver is not surprising. The average retailer counts on some percentage of gift cards sold at the holidays never to be used, or never to be used fully. Those unused funds are pure profit. I don’t think any of us really blames a commercial entity for trying to make a few extra dollars where it can, though in the case of my “rebate” it feels particularly cheap and annoying.
There is a much more insidious reason for issuing such cards, however. It is the same reason many stores issue magnetic-strip or even RFID shopper’s cards and key tags, trading price reductions and store promotions for the use of that card or tag. That reason is control.
Information is power. The ability to track your purchases, to build a database of what you buy, to compile a profile of information about you, what you do and what you like is the establishment of some amount of power over you. I remember how disturbed I was when I learned, years ago, that my video rental store kept a running database of every movie I had ever rented from them. I use a shopper’s club card at my local grocery store; that chain compiles a list of my purchases and sends me targeted coupons accordingly. Somewhere, floating in the ether of some credit card company’s computers, is a list of every hotel chain I’ve ever visited, and every car I’ve ever rented. Don’t like it? You don’t have much choice. Try renting a car or paying for a hotel room with cold, hard cash. They’ll gladly take your money when you check out or return the vehicle, but they insist on a “major credit card” when securing or reserving your purchase for you.
The death of cash represents the death of freedom in our society. Where previously those who wished to buy goods or services without a record of the transaction could always pay cash, it is now increasingly difficult to do so. We are willful participants in this trend toward tracked, electronic commerce, too: Very, very few of us even pay with actual cash anymore. I spent some time watching the checkout at a Starbucks not long ago, and every single person who bought coffee paid with a card. Not one of them had actual cash. Whether using credit or debit, every last one of them waved a magnetic-strip-equipped piece of plastic at the clerk.
The widespread use of electronic commerce creates increased vulnerability to hacking, identity theft and cybercrime. Your credit card is protected against unauthorized transactions, often at no expense to you. Let’s hope your debit card, linked to your actual checking account, is similarly protected. ChannelWeb reported recently that Heartland Payment Systems, a credit card processing company, had experienced a “breach” of its computer systems thought to be the work of an “international cybercime ring.” More than 100 million accounts were compromised, or at least potentially so, in what could be the worst security breach of such a data system in history.
The Heartland breach was high-profile and made national news. Much smaller but similar incidents occur every day. I’ve had a couple of cards canceled and replaced after they were compromised at a “third party location.” My father had a few mysterious items like electric guitars and other musical instruments show up at his house, unsolicited – after a hacker got his card data and started sending purchases to the billing address in the account. I worked at a firm not that long ago whose credit card account was hacked and used to purchase computers that were then shipped to Ireland, of all places. We’ve all experienced it or we know someone who has. The problem is only going to become more common.
The threats of increased tracking (and therefore control) over your consumer behavior, coupled with the increased security risks of electronic commerce, make using cash more attractive an option than ever before. Society, however, is conspiring against those of us who seek to pay with real money rather than virtual zeros and ones. The death of cash is the death of liberty. We must all fight this particular aspect of technological “progress” unless we wish to attend the funeral for our financial freedom.