For consumers who want to shop online, but either don’t have access to a credit card or don’t want to use one online due to security concerns, Wal-Mart has a new option.
Cyber Monday
Wal-Mart will offer its online shoppers a “pay with cash” option. Shoppers select their items at Walmart.com and then select the cash option at checkout. Then, the customer must bring an email receipt with their order number to a Wal-Mart store within 48 hours and pay with cash. After payment is received, the customer can either receive their items shipped to the store or to their preferred address.
The program plays to Wal-Mart’s key customer, a low-income consumer who may have little access to credit cards and banking options.
According to Wal-Mart, the bulk of its customers use cash or a cash equivalent such as a debit card to make purchases. Only about 15 percent of all transactions are paid with credit, the company said.
Wal-Mart recently polled consumers and found that more than two thirds of those identified as “unbanked” or “underbanked,” which means they don’t have a bank account or a credit card or have limited banking options, would like to use cash as for online payment if the option were available.
One in four U.S. households fall into the unbanked and underbanked categories, according to a 2009 study by the Federal Deposit Insurance Corp. However, many of these consumers are online, with 81 percent of the unbanked and 63 percent of the underbanked having Internet access, according to research from Javelin Strategy and Research.
“Many of our customers shop paycheck to paycheck and are looking for more ways to purchase items online but don’t have the means to a credit, debit or prepaid card,” said Joel Anderson, president and CEO of Walmart.com, in a press release announcing the program. “Our new ‘Pay with Cash’ offering is designed just for them. It makes it easier for our customers to shop the way they want, where they have access to a broader product selection at Walmart.com coupled with the convenience of payment and shipping as they want.”
The strategy also may be a good way to boost Wal-Mart’s online business, which is an extremely small slice of its overall sales. The program also provides another chance to get to consumers into Wal-Mart’s stores where they could potentially make another purchase.
Questions? Comments? Email us at consumernation@cnbc.com. Follow Christina Cheddar Berk on Twitter @ccheddarberk.
