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Is it time to toss out paper receipts?

31st May 2019

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There is growing awareness among consumers of a need for a more sustainable alternative to paper receipts. When we shop, we can pay at the till with a tap of our phone or card, but at the end of the vast majority of transactions we are still handed a paper slip with details of our purchase and how much we paid for it. This comes at a huge environmental cost and feels increasingly dated in today’s digital world.

Every year, UK retailers hand out around 11.2 billion till receipts, according to Parcelhero. Three quarters of those are thrown away unused, according to a survey commissioned by digital receipts provider Flux. Some 90% (of more than 1,000 people surveyed) said that when they do need to use paper receipts, they are usually lost, faded or have been thrown away.

Not to mention the potentially harmful impact on health. Aside from the wasted paper from so many discarded receipts, at least half of all receipts are printed on thermal paper, which contains harmful substances called bisphenol A (BPA), or its substitute BPS.

Both chemicals can be absorbed through the skin and can pose health risks. In addition, there are problems with recycling thermal paper as it can it contaminate the recycled paper used in cups, toilet paper, and so on. Burning it just releases more BPA into the air.

Some of the UK’s largest retailers are now offering digital receipts. Veronique Barbosa, co-founder of Flux, says these put the power back in the hands of the customers, “who can recall their favourite meal they might have bought a month ago, or find a receipt for that pair of shoes they want to return three months later”.

Giving customers more choice

The debate on receipts has a global reach. In California, lawmakers are considering a bill that would prohibit businesses from handing out paper receipts unless customers ask for them. Electronic receipts would become the default option.

In 2018, a Which? survey showed that nearly half of respondents had been offered a digital receipt in the past three months. Some merchants send receipts in emails or SMS messages. This works well when customers have already shared their contact details with the merchant.

Kaye Sotomi, co-founder of Chop Chop hair salon, says: “We are probably one of the most advanced digital salon brands out there because we have technology that allows our customers to book online, virtually queue, pay for services, select our stylists, rebook, pick up loyalty points.” Chop Chop salons take payments with iZettle, a card reader. Receipts, where needed, are sent directly to a customer’s email or telephone number.

iZettle offers merchants the option to print receipts but Chop Chop does not and Kaye says he has never had any complaints. “My experience is mainly freelancers tend to want the receipts because they have to either claim back in taxes, or report it as an expense.”

The benefits of e-receipts

That, says Veronique, is another benefit of e-receipts. “If you have a digital record, filing expenses becomes much more straightforward. Rather than having to take a photo of your receipt, having it in a digital format automatically is much simpler.”

In regular shops, however, adoption of digital receipts has been slow, partly because consumers understandably feel uncomfortable handing over their contact details to a stranger at checkout. Which? found that 59% of people were concerned their email address could be shared with third parties; and 42% felt it made it easier for companies to target personalised marketing at them.

There are other ways of providing digital receipts, via apps or QR codes that customers can scan. Veronique says the problem with all these services is that they add time to the checkout process.

“We’re all time poor. The idea of spending another two minutes at checkout is not OK for most people, especially if you’re at a supermarket, or even if you popped in to buy a pair of shoes. You don’t want to stand around and faff with trying to spell your name. The fact that there’s a lot of friction involved has been a problem.”

Receipts that live in your banking app

Flux, which launched in April 2017, offers a different service linked to a customer’s bank account. When a Starling customer connects it to their account, they will automatically receive full receipts in their banking app when they pay with their bank card at stores in Flux’s network, which includes Eat, Costa Coffee, KFC, Schuh, and a handful of others.

It is a neat solution, although Flux faces what Veronique calls “the classic marketplace problem”. Flux requires its retail partners to upgrade their software, in order to integrate the technology to transfer data to the banks on what items were sold. Veronique says: “Merchants want to know there are sufficient consumers interested before they commit to the work on their side.”

Flux is targeting the 20-30 merchants that account for more than 80% of spending in the UK. Further down the line, Veronique envisages forming partnerships with accountancy software providers, such as Xero, to simplify the task of dealing with expenses and end-of-year tax reconciliation for freelancers, in particular.

“As an SME myself, one of the biggest pains for me every quarter is the VAT reconciliation. With all the technology of Amazon Business, it’s still a massive, manual process to make sure we have all the right itemised invoices. So I really hope it’s a problem we can help solve sooner rather than later.”

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