Do Discounts Make an Impact at the In-Person Point of Sale

Do Discounts Make an Impact at the In-Person Point of Sale?

March 09, 2026

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Are you, like me, a creature of habit? Do you drink your coffee the same way every morning? Are there two or three news sites you frequent day after day? Do you have a favorite shirt you wear every weekend?

Behavior patterns or habits, rooted in neuroscience, are often performed automatically. For example, when you approach a cashier at the grocery store, you may reach for your credit card without thinking. Is there anything that would persuade you to reach for your checkbook or debit card instead?

If you're thinking that the incentives for making a change would need to be strong, you're not alone. In a recent analysis with Oz Shy and Joanna Stavins, I learned that stated preferences and inertia lead us to use our favored payment methods. Discounts or surcharges offered at the point of sale intended to influence us to use other payment methods may not overcome those habits. The analysis uses data from the 2024 Survey and Diary of Consumer Payment Choice.

For in-person purchases we mostly use our preferred payment method. The 2024 survey shows that people who prefer using credit were the most persistent:

• People who prefer cash used it for more than half of their in-person purchases.
• Those who prefer debit used it for almost two-thirds.
• Credit users stayed consistent for almost three-quarters.

The payment method we chose for our last purchase matters for how we pay next. We tend to repeat a choice, even if it's not our preferred method. For example, a consumer who used a debit card or a credit card for a transaction is 32 percent more likely to use the same method for the next transaction, as compared to using a different method.

Demographics and characteristics of the transaction influence behavior. A consumer's income and educational level, the size of a transaction, and the type of merchant involved play a large role in influencing payment behavior. These factors outweigh discounts and surcharges when it's time to make a payment choice.

Cash discounts do not persuade card lovers to switch. The analysis found that cash discounts did not affect the probability that a consumer who preferred cards would use cash instead.

Discounting and surcharging remain rare. Of 3,449 in-person cash payments in October 2024, 166, or 4.8 percent, received a cash discount. Of 6,235 credit card payments, 185, or 3.0 percent, were surcharged. New data from 2025 is coming soon at Survey and Diary of Consumer Payment Choice on the Federal Reserve Bank of Atlanta's website.