/ Shopping, Technology

Is technology making it too easy to spend money?

Woman with calculator and lots of shopping bags

Modern technology continues to make shopping more convenient, with easy-to-use apps and devices that make cards redundant. So should we stop and ask whether money is becoming too easy to spend?

Shopping is certainly far easier now than it used to be. In 1994, Sunday trading laws were relaxed in the UK.

1996 saw Tesco open its first 24-hour supermarkets, and the early closing of shops in town on market days is now almost unheard of. But these changes in law and high street culture seem quite insignificant compared to the convenience new technologies are beginning to offer.

How technology changed retail

Amazon opened its virtual doors in 1994, with Ebay following in 1995. And while many consumers were initially cagey about spending online, we’re now far more accepting and can act on impulse the moment it strikes.

And then came smartphones, which not only brought a shop window to your pocket, but also the opportunity to instantly spend money on applications – and then spend money within those applications.

The beauty (if that’s the right word) of sale points like Amazon and App Stores is that you only need to enter your card details once, and then you can spend willy-nilly to your heart’s content. And the way we currently think about apps looks set to gradually change too.

Let’s get connected

At present, when we think of an app, we think of phones and tablets. But as more devices become ‘connected’ we’ll be downloading apps for our cars, fridges and bathroom mirrors, with each connected product becoming a new easy-to-use point of sale.

Panasonic has recently announced its direct billing service for the purchasing of apps and physical products using the TV’s remote control, so you won’t even need to get up from the couch.

And then there’s the rise of Near Field Communication (NFC) technology, which is promising an even easier solution to shopping. As with the Oyster Card on the London Underground, NFC smartphones and the forthcoming Google Wallet will merely require contact for a transaction to be made.

Not easy enough for you? Well how about an application enabling you to make payments simply by speaking your name? That’s what Card Case is promising. It’s an app coming from the US to Apple and Android devices in the coming weeks, and it’s been reported that around 20,000 businesses have already signed up to use it.

I can’t see the downsides

It all seems rather worrying, but when I try to think of the possible detriments, none really come to mind. There are questions around security of course, but common sense usually irons these out. Then there’s the often-lamented loss of social interaction, but buying albums from record shops were never social highlights for me.

It could even be argued that if it’s easier to spend money then it’s easier to run up a debt; but I think the propensity to go into debt is a personal characteristic rather than something to be blamed on technology.

So, I say bring on these new developments. In a few years’ time we’ll be looking back on them like we are today when we remember those first days of internet shopping.


Ben asks an important question. Undoubtedly the convenience is fantastic and future developments will make it even easier to spend money, but it’s about time to think about some of the problems.

Some people spend within their means but others get into debt, and with high interest rates it is difficult to deal with the problem and all too easy to carry on spending.

My biggest concern is the amount that is spent on replacing items that are still working or buying things that are not really needed and consequently are used very little. I’m not suggesting that we go back to the thrifty practices of my parents’ generation (e.g. darning worn clothes) but there must be a sensible compromise. Next time you visit a recycling depot, have a look and see what people throw away.

Internet shopping makes it harder to decide whether an item is suitable, whereas some goods can be inspected in shops.

On average we are living longer and need to save money to ensure that we can enjoy our retirement. That is a message we need to get over to young adults and it’s not good that students are introduced to debt through the student loans scheme. For some it will become a way of life.

The technology is not going to go away so children need to be trained to save up for what they want and that it’s not essential to spend savings.

Go back to the early 2000/1990s and earlier.

Shop A and Shop B were across the road from each other on the high street, in direct competition.
The only way for shop A or B to increase trade was to offer lower prices, or footfall drivers, to entice new custom into their shop.
The customer was king, as shop A and B fought over trade, we the customer benefitted. Things like price matching, special offers that were genuine special offers (as trading standards used to rule with an iron fist over retailers) meant that competition was healthy and prices fell and stayed low or either shop would have gone out of business.
The only information that shop A and B had, was the history of the cash spending from customers on any given day.

Fast forward to today and in the future, where marketing is king and the customer is merely a number.
Shop A and B no longer have to compete with each other, as businesses can now buy our information off each other.
Personal information is not allowed to be sold, but “a report of” or “analysis of data” can be sold on for more profit. This information gathering is killing competition.
For proof of this, I can list many prices over the past year where two of the big four supermarkets have had identical prices and “sales” in my area alone, within hours of them going onto the shelf.

The retail industry now know everything about the people in any given area.
Notice how an online sign up is required before many promotional features are given by a retailer!
Further proof is the way in which we are being pushed into shopping by devices that have no option to see what information is being gathered about our habits.
Next time you shop via your spanking new iphone or android, try to find out what cookies are being stored or information is being collected.
Pay for goods with a credit/debit card? Big mistake!
Convenience costs! There are reasons why businesses want you to pay by card, now some are even charging you for doing so, despite promises from those in charge that this would never happen.
For the customer it simplifies the process, for the business, it gives them vital information they can use to set their own prices and then sell on reports about.

Did you know that one of the big four supermarkets produces for the industry every year, “an earnings report” every year? Where are they getting their information to do this report on? YOU the customer are giving it to them everytime you pay using a card or use their “price comparison” website!
Loyalty cards are another false economy, they are designed for the sole purpose of gathering your information and shopping habits, the more information you give them, the higher prices for goods you will pay.

It cannot be right that I can pay £1.60 for a product, yet for the exact same product, bought at the same time in another time, they are on sale 10% cheaper. This is pricing by demographic, which the customer alone cannot change.
If we had a national “shop in cash week” the retail industry would be stuffed. It would throw out all their figures and reports would cease to accurate.
Final proof of how we are all being ripped off, is the comparison between local stores and national chains.
How can it be that a local independant store can sell a product cheaper, on a regular basis, than a national store who buys the same item in by pallet lot?
The fact is, an independant should not be able to beat the big national company on price, which demonstrates that prices are being set in areas, by how much the national company can get out of the customer.

Technology is killing the customer and genuine competition. The government, legislation and trading standards are playing catch up whilst the customer’s paying the price.
Convenience costs – making it easier to shop is a smokescreen for gathering your shopping information.

Shop local, shop in cash, tell business as little as possible about your shopping habits, then watch prices come crashing down!

One of the oldest and worst ways that technology makes it too easy to spend money is premium rate phone numbers. Many consumers don’t understand that when they phone a premium rate phone number, they are paying money to the called party through the artificially high cost of the phone call. This is even worse when the called party provides no service to the consumer, for example telephone voting lines for television programmes. If premium rate phone numbers were banned and consumers had to pay by other means (e.g. debit/credit card) for the service provided by the called party, then the consumer would think twice about wasting money on such a service. Telephone bills should be for telecommunications services only and should not contain charges for unrelated third party services.

Don’t forget mobile phone calls. Whether they are PAYG or included as part of a contract they can be expensive.

We’re talking about this on the podcast being recorded today. Lets not forget technology also helps us compare prices – and can offer useful impartial help as well!

When people use a website to compare prices, it gives the companies in that industry information, which in turn is used against the customer.

Look at all the things you can “compare” online at the moment;
– Car, pet, travel, home insurances
– Supermarket prices
– Mortgages
– Gas and electricity

One factor these and other compared items have in common?
All have record prices!
Think about it…