Supermarkets lose their appetite for cash withdrawals at the checkout
Decades ago, big retailers eagerly offered cash out at checkout because they profited from handling cash. Today, it costs them money — and they’re clamping down.
Cash withdrawals from supermarkets – “cash out” – have plummeted, but industry observers argue this reflects cost management strategies by supermarkets rather than a lack of demand.
Analysis of Reserve Bank data by Qi Insights shows that cash out at major retailers fell 15.1% in the last year and 12.9% over the past two years to the end of May, largely at major retailers. Conversely, ATM withdrawals rose 4.5% in the last year and 2.0% over the last two years to May.
“ATM withdrawals now make up 90% of all cash withdrawals, the highest it has ever been,” Payment Services managing director Brad Kelly told Capital Brief. “Withdrawals done at the supermarket make up the other 10%, and they are falling in popularity, down 6%. Free options are harder to come by. If you want cash, chances are you need to pay a whacking great ATM fee on a non-bank ATM — up to $5 in some cases.”
Kelly cited Australian Prudential Regulation Authority data showing the big banks closed more than 8,200 ATMs since 2017. However, he argued supermarkets and other big retailers had introduced limits which were pushing cash users towards ATMs. The average cash withdrawal is $300, he said, but the average retailer cap on cash out is $200 and more frequently cash out is only allowed with a purchase.
