Target will stop accepting personal checks on July 15, 2024. The retailer cites “extremely low volumes” of check usage as the reason.
This decision aligns Target with other retailers who have already discontinued check acceptance. Personal check usage has declined by 70% since 2000, according to the Federal Reserve.
Elderly Consumers May Face Challenges
The discontinuation may affect elderly consumers who prefer checks. Approximately 55% of check users are over 55 years old.
Some older adults may struggle to adapt to digital payment methods. Only 61% of adults over 65 own smartphones, compared to 96% of those aged 18-29.
Alternative Payment Methods Remain
Target will continue accepting various other payment forms. These include digital wallets, SNAP/EBT, and buy now/pay later services.
Credit and debit cards remain popular options. In 2023, 80% of consumers preferred credit or debit cards for in-store purchases.
Surprising Check Usage Among Youth
Younger generations reportedly write more checks than expected. Gen Z and Millennials self-report higher check usage than Gen X.
This contradicts the general trend of declining check use. In 1995, 49.5 billion checks were written annually; by 2018, this number dropped to 14.5 billion.
Other Retailers Reject Checks
Target joins other retailers in discontinuing check acceptance. Aldi and Whole Foods already don’t accept personal checks.
The number of retailers accepting checks has decreased by 30% since 2010. Electronic payments now account for over 70% of all non-cash payments.
Checkout Experience Undergoes Changes
Target has implemented several changes to its checkout process. The retailer limited self-checkout to 10 items or fewer.
Management can now set self-checkout operating hours. These changes aim to combat retail theft, which cost retailers $94.5 billion in 2021.
Self-Checkout Limitations Address Theft
Target’s self-checkout restrictions target rising retail theft. Retailers lost an average of 1.44% of sales to theft in 2021.
Self-checkout areas are particularly vulnerable to theft. Studies show that theft rates at self-checkout are up to five times higher than at staffed checkouts.
Price Cuts Combat Declining Sales
Target slashed prices on over 5,000 items recently. This move aims to attract inflation-wary customers.
Target’s comparable sales fell 5.4% in Q1 2023. Inflation peaked at 9.1% in June 2022, the highest rate in 40 years.
Digital Payments Continue Growth
The shift away from checks reflects growing digital payment adoption. Mobile payment users in the U.S. are expected to reach 125 million by 2025.
Contactless payments grew by 150% between March 2019 and March 2020. The COVID-19 pandemic accelerated this trend, with 79% of consumers using contactless payments in 2020.
Check Fraud Concerns Retailers
Check fraud remains a significant concern for retailers. Check fraud attempts rose 23% in 2021 compared to 2020.
The average loss from a fraudulent check was $1,491 in 2021. Digital payments offer more secure transaction options for retailers.
