Walmart’s Pay With Cash scheme allows shoppers to order online and pay with cash in store. But when paying for their goods, 40% of them chose to use other forms of payment - Retail Week’s content partner StorefrontBacktalk asks why.

Walmart released a handful of stats about its new Pay With Cash online program last week, and one figure stood out. 40% of everyone who used the cash-online program ended up paying with anything other than cash.

Why would almost half of the people who specifically are using a cash-only program end up using a payment card or check? Joel Anderson, chief executive of, told attendees at the Internet Retailer Conference & Exhibition in Chicago an interesting theory: Those shoppers may be scared to use payment cards online. In mid-2012, could this be true? Here’s the bizarre part: For Anderson’s argument to work, we have to believe that there are a lot of consumers who are fearful of entering their payment details online, but who are not so fearful that they hesitate giving it to an associate at the store. Even though the payment data is stored in the exact same place.

If consumers feel this way, we must understand that and be ready to deal with it, even if it makes little sense. Even though online systems are generally more secure than in-store, typing the card digits into a faceless screen can feel unnerving. The consumer is unsure of who is really seeing their details. Handing the physical card to an associate at the local Walmart doesn’t trigger those emotional cues. For many shoppers, it’s not an issue of which is safer, but an issue of which feels safer.

Shoppers like sites that store their payment-card data because they don’t have to type it in. That’s not merely for convenience. For some shoppers, it makes them feel at risk every time they type it in. Even though, from an IT perspective, it’s a little bit riskier allowing your data to be retained and reused, it sidesteps the act of typing it in. Again: less secure, but it feels more secure.

Part of the reason why these beliefs are so strongly resisted among retailers—which is why discussing Walmart’s 40% figure is so important—is that retailers know far too much. Consumers don’t understand how card-data databases work, what PCI requires or anything else. They know how things feel to them, and we need to listen to that.

The 40% figure also challenges a popular theory about Walmart’s cash online program, namely that it will be overwhelmingly used by the unbanked or by teens or others who can’t get payment cards. But if 40% end up paying with a payment card, it’s hard to reconcile that with almost all of these people being unbanked.

A few other interesting stats that Anderson released:

  • The cash online orders represented 2% of all Walmart online sales in the few weeks the program has been live.

Walmart didn’t release any supporting numbers, so it’s hard to put that into specific context. That said, 2% of all online orders from Walmart? Regardless of the context, that is a staggeringly large figure.

  • Nearly 30% of these pay-by-cash online shoppers are new to

This is good news for Walmart on two counts. First, this proves the chain’s fear that some shoppers weren’t going online because they didn’t have payment cards or didn’t want to use them online. Second, any program that brings in this many new customers is a win.

Without more specifics, of course, we don’t know whether these customers were existing Walmart store customers or if they were entirely new to Walmart. The best way to use this program is to get products that your local store has sold out of. How much of that is going on? Alas, no Walmart stats were released to help us answer that question.

  • Walmart’s online baskets are 50% larger when customers use Pay With Cash online.

This is more good news, but it’s harder to figure out. Why would the ability to order without a payment card make the orders larger? Is the abandonment rate higher than expected? It’s an interesting statistic, but we would love to hear more about why.


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