INFORMATION TO USERS

This material was produced from a microfilm copy of the original document. While the most advanced technological means to photograph and reproduce this document have been used, the quality is heavily dependent upon the quality of the original submitted.

The following explanation of techniques is provided to help you understand markings or patterns which may appear on this reproduction.

1. The sign or "target" for pages apparently lacking from the document photographed is "Missing Page(s)". If it was possible to obtain the missing page(s) or section, they are spliced into the film along with adjacent pages. This may have necessitated cutting thru an image and duplicating adjacent pages to insure you complete continuity.

2. When an image on the film is obliterated with a large round black mark, it is an indication that the photographer suspected that the copy may have moved during exposure and thus cause a blurred image. You will find a good image of the page in the adjacent frame.

3. When a map, drawing or chart, etc., was part of the material being photographed the photographer followed a definite method in "sectioning" the material. It is customary to begin photoing at the upper left hand corner of a large sheet and to continue photoing from left to right in equal sections with a small overlap. If necessary, sectioning is continued again — beginning below the first row and continuing on until complete.

4. The majority of users indicate that the textual content is of greatest value, however, a somewhat higher quality reproduction could be made from "photographs" if essential to the understanding of the dissertation. Silver prints of "photographs" may be ordered at additional charge by writing the Order Department, giving the catalog number, title, author and specific pages you wish reproduced.

5. PLEASE NOTE: Some pages may have indistinct print. Filmed as received.

Xerox University Microfilms 300 North ZM b Road Ann Arbor, Michigan 40100 77-2512

STRAW, Steven White, 1930- AN ANALYSIS OF CONSUMER USAGE OF COMPUTER CONSOLES FOR CREDIT CARDS, AN EMPIRICAL EXPLORATION OF RETAIL CUSTOMER BEHAVIOR.

The Ohio State University, Ph.D., 1976 Business Administration

Xerox University Microfilms , Ann Arbor, Michigan 40106

(£) Copyright By

Steven White Straw

1976 AN ANALYSIS OF CONSUMER USAGE OF COMPUTER CONSOLES

FOR CREDIT CARDS, AN EMPIRICAL EXPLORATION OF

RETAIL CUSTOMER BEHAVIOR

DISSERTATION

Presented in Partial Fulfillment of the Requirements

for the Degree Doctor of Philosophy in the Graduate

School of The Ohio State University

By

Steven white Straw, B.S., M.A.

The Ohio State University

1976

Reading Committee: Approved By

Dr. Bernard J. LaLonde Dr. John R. Grabner Dr. James E. Robeson J i Je. f Adviser Department of Marketing and Logistics ACKNOWLEDGEMENTS

Completion of a task of such magnitude as this dissertation would have been impossible without the assis­

tance and encouragement of many individuals too numerous

to thank individually. A few people made major contri­ butions to the research effort and encouragement to the author during the many months consumed in doing the work.

The author is particularly indebted to the following in­ dividuals and gratefully acknowledges their invaluable assistance and inspiration.

Dr. Bernard J. LaLonde, "James R. Riley" Professor of

Marketing and Logistics, The Ohio State University, who served as Chairman of the Dissertation Committee, gave unselfishly of his time and expertise on innumerable occasions. His guidance was felt in each and every phase of the research and the preparation of this dissertation.

A skillful blend of help and criticism led the author to higher achievement and greater effort than would have been possible without Dr. LaLonde's influence. He was a personal friend and an outstanding human being in addition to being a demanding scholar. Dr. John R. Grabner served as a reader on the

Dissertation Committee. Many improvements in the study

came as a result of his guidance. His comments and sug­

gestions were very helpful and scholarly.

Dr. James E. Robeson served as a reader on the

Dissertation Committee and was a warm and encouraging

person in many private consultations. His influence was

great in helping to motivate the author to do his best and

to see the project as a task which could be accomplished.

Dr. James II. Davis served as a reader on the

Dissertation Committee. His close reading and detailed

comments were valuable in making the final product of much

higher quality.

Dr. Roger D. Blackwell made important contributions

to the methodology of the study and interpretation of the

data. He was willing to help at any time and was respon­

sible for a good deal of logical thinking and growth on

the part of the author.

Dr. Wayne Talarzyk was a key individual in helping

the author understand statistics and statistical methodo­

logy. His help was willingly given and eagerly sought.

The many members of the research panel who filled out

and returned the completed questionnaires several times were of significant help. Without their cooperation the

study could not have been accomplished. iii Carol Jones, an advisor in the Computer Department at

Florida Atlantic University, gave many hours in advising the author on available programs and helping to get the data processed correctly on the computer.

Finally, much gratitude and thanks are due to my wife,

Irene, and the members of my family who had faith and gave encouragement all along the way. My wife typed the in­ numerable drafts and corrections and also the final manu­ script. Without her faith, encouragement, and help this project could not have been completed. VITA

June 23, 1930...... Born - Price, Utah

1954...... B .S . in Business, University of Utah, Salt Lake City, Utah

1954-195 5 ...... Salesman, Procter & Gamble Company, in Northern Utah and Southern Idaho

1955-196 0 ...... Manager, Forest Hill Market Salt Lake City, Utah

1960-1969...... Owner and Manager of Silver Dollar Markets, Salt Lake City, Utah

1969-1972...... Research Assistant, Technical and Business Services, The Ohio State University, Columbus, Ohio

1973...... M . A * in Consumer Behavior, The Ohio State University Columbus, Ohio

1973-1976...... Assistant Professor of Marketing, Florida Atlantic University, Boca Raton, Florida

FIELDS OF STUDY

Major Field: Marketing

Minor Fields: Consumer Behavior Logistics

v TABLE OF CONTENTS

Page

ACKNOWLEDGEMENTS...... ii

VITA ...... v

LIST OF TABLES...... ix

LIST OF FIGURES...... XV

Chapter

I. INTRODUCTION...... 1

Nature and Purpose of the Study...... 1 Background...... 4 Statement of the Problem...... 7 Guiding Hypotheses...... 11 Methodology...... 12 Limitations of the Study...... 15 Potential Contributions of the Study... 16 Organization...... 17 Summary...... 20

II. CONTEMPORARY VIEWS ON CONSUMER CREDIT, CREDIT CARDS, AND RETAIL ELECTRONIC FUNDS TRANSFER...... 21

Historical Setting of Credit...... 21 Contemporary Credit Practices...... 23 Volume of Bank Credit Card Usage...... 27 Electronic Funds Transfer...... 28 Point-of-Sale Technology in Retail Stores...... 3 8 Why the Interest in Computerized Credit by Banks, Retailers, and Computer Manufacturers...... 48 Credit Cards, Consumer Life-Style and Attitudes...... 62

vi Page

Demographics and Life-Style of the Users of Credit and Credit Cards...... 65 Changing Consumer Attitudes Toward Credit and Credit Cards...... 69 Steps to an EFTS Economy...... 72 Summary...... 78

III. RESEARCH DESIGN...... 81

Introduction...... 81 The City National Bank Test ...... 81 Basic Design of the Research...... 85 Sample Selection Procedure...... 87 Data Gathering Procedure...... 89 Information Collected...... 94 Data Analysis and Statistical Procedures...... 96 Merchant In-Depth Interviews...... 98 Merchant Questionnaires...... 100 Summary...... 101

IV. FINDINGS AND ANALYSIS OF THE RESEARCH...... 104

Introduction...... 104 Findings Relative to the First Underlying Hypothesis...... 105 Findings Relative to the Second Hypothesis...... 109 EFTS Users Compared to Department Store Card Users...... 113 Terminal Credit Card Use As An Alternate Method of Payment...... 118 Consumer Attitude Clusters and Use of Automated Credit Cards ...... 120 An In-Depth Analysis of Respondents Who Used the Automated Terminals.... 126 Findings From the Merchant Questionnaires...... 131 Store Personnel Perception of the EFTS Test ...... 131 Customer Understanding and Use of the Computer Console...... 135 Merchant Response to Open-Ended Statements in the Questionnaire 136

vii Page

V. SUMMARY AND CONCLUSIONS...... 140

Summary of Purpose and Design...... 140 Summary of the Research Hypotheses and Findings...... 14 3 Consumer Usage of EFTS...... 143 Demographic Tests ...... 143 Consumer Attitudes and Likert Tests ...... 145 The McNemar Test ...... 145 Customer Use of EFT ...... 146 Implications and Conclusions...... 146 Ideas Not Supported By the St u d y ...... 16 2 Dysfunctional Aspects of EFTS ...... 166 Suggested Improvements in EFTS From the Respondents...... 168 Contributions of the Study ...... 169 Some Suggestions For Future R e search ...... 171

APPENDIX

A ...... 174

B ...... 201

C ...... 214

D ...... 273

E ...... 295

F ...... 300

G ...... 306

H ...... 308

1 ...... 313

J ...... 337

K ...... 342

L ...... 344

M ...... 347

N ...... 350

LIST OF REFERENCES 352 v» m t » LIST OF TABLES

Table Page

1. Credit Card Volume and Outstandings, 1967-1975...... 27

2. Null Hypothesis Tests, Mailing Number T w o ...... 107

3. Null Hypothesis Tests, Mailing Number Three...... 108

4. Demographics and Credit Card Use of Computer Terminal Users Versus All Respondents...... Ill

5. Demographics and Credit Card Use, Computer Terminal Users Compared With Department Store Credit Card Users...... 115

6. Total Use of Credit Cards, Mailing Number Four...... 118

7. Cluster of Questionnaire Statements Answered Positively to Electronic Funds Transfer/Automated Credit Card Terminals...... 121

8. Cluster of Questionnaire Statements Answered Negatively to Electronic Funds Transfer/Automated Credit Card Terminals...... 122

9. Cluster of Questionnaire Statements Where Respondents Were Undecided About Automated Credit Cards or EFT... 124

10. The McNemar Test For Significances of Changes Between Mailings Number Two and Three...... 128

ix Table Page

11. The McNemar Test For Significance of Changes Between Mailings Number Two and Four...... 129

12. The McNemar Test For Significance of Changes Between Mailings Number Three and Four ...... 130

13. Favorable Store Employee Response Toward the EFTS Tested where They Worked ...... 132

14. Unfavorable Responses By Store Employees Toward EFT ...... 133

15. Merchants' Estimate of Customer Reaction and Uses of Computer Terminals For Credit Cards ...... 134

16. Responses By Store Personnel to Open-Ended Statements...... *...... 137

17. Frequency Count of Shopping Activities, Mailings Number One and Four Compared...... 202

18. Number and Size of Charge Transactions By Month at A Supermarket in Upper Arlington, Ohio ...... 215

19. Profile of BankAmericard Customers at a Supermarket, Upper Arlington, Ohio, March 1972 ...... 216

20. Likert Summated Rating Analysis of All Attitudinal Questions in All Four Mailings...... 217

21. Likert Rating on Questions Favorable to Credit Card Use By the Thirty Respondents Who Used the Computer Terminals, Mailing Number One Compared With Four...... 238

x Table Page

22. Likert Ratings on Questions Favorable to Credit Card Use By the Thirty Respondents Who Used the Computer Terminals in Mailing Number Two and Three...... 240

23. Summary of Measurement of Responses to Attitudinal Questions of Four Mailings...... 242

24. Likert Summated Ratings Showing Individual Total Scores For All Four Mailings...... 243

25. Likert Scores of Respondents Using Computerized Terminals During the Last Three Mailings, Test Group Only...... 245

26. Likert Summated Rating of Item Analysis of Attitudinal Questions in Which the High and Low Twenty-Seven Percent of the Respondents Were in Agreement in Direction of Response...... 248

27. Likert Summated Rating Item Analysis of Attitudinal Questions Which Show Areas of Strongest Expressed Feeling.. 253

28. Likert Summated Rating Item Analysis of Attitudinal Questions Which Had the Highest T Scores...... 259

29. Likert Summated Rating Item Analysis of Attitudinal Questions Which Showed No Significant Difference Between High Twenty-Seven Percent and Low Twenty-Seven Percent of Respondents At the .05 Level of Confidence...... 264

30. Frequency Count of All Likert Statements Where Fifty Percent or More of the Respondents Agreed With the Statement...... 267

xi Table Page

31. Frequency Count of All Likert State­ ments Where Over Fifty Percent of the Respondents Disagreed With the Statement...... 270

32. A Complete Listing of Responses to the Merchants' Questionnaire Statement: "The Biggest Problem With the Program Was...,"...... 274

33. A Complete Listing of the Merchants' Responses to the Statement: "The Major Disadvantage of the Program to the Customer Was...."...... 275

34. A Complete Listing of Merchants' Responses to the Statement: "The Biggest Problem With Operating the Console Device Was..,."..... 276

35. A Complete Listing of the Merchants' Responses to the Statement: "The Major Disadvantage of the Program to the Merchant Was ... . " ...... 277

36. A Complete Listina of Merchants' Responses to the Statement: "If I Had a Choice, I Would Change the Program By...."...... 278

37. Frequency Count of Responses to Likert Type Statements By the Owners, Managers, and Employees of the Twenty-Eight Stores Accepting BankAmericard Using the Computer Consoles...... 279

38. Merchant Questionnaire Part C: Estimate of Customer Participation At the First of the Test Compared to Participation at the End of the T e s t ...... 282

39. A Complete Listing of the Merchants' Responses to the Statement: "Relative to the Program, Most of My Customers Thought____" ...... 284

xii Table Page

40. A Complete Listing of the Merchants' Responses to the Statement: "The Best Part of the Program Was...."...... 286

41. A Complete Listing of the Merchants' Responses to the Statement: "The Major Disadvantage of the Program To the Customer Was...."...... 288

42. A Complete Listing of the Merchants' Responses to the Statement: "The Consumer Advertising Program Sponsored by CNB-BankAmericard W a s " ...... 289

43. A Complete Listing of the Merchants’ Responses to the Statement: "The Orientation and Training Given To the Merchants by City National Bank and BankAmericard Was...."...... 290

44. A Complete Listing of the Merchants' Responses to the Statement: "If I Had Another Opportunity to Participate in the Same Type of Test, I Would...." 291

45. A Complete Listing of the Merchants* Responses to the Question: "The Major Advantage of the Program to the Merchant Was...."...... 292

46. A Complete Listing of All the Merchants' Responses to the Question: "Do You Have Any General Comments on the Program Which Would Help Us to Evaluate Its Effectiveness?"...... 293

47. The Participating Merchants Who Had Computer Terminals, Listed By Shopping Centers...... 307

48. Likert Questions Favorable to Credit Cards and the Null Hypothesis Tests...... 310

49. Demographic Null Hypotheses...... 311

x• n * i * Table Page

50. Demographics of Users of Lazarus Department Store Charge Cards Compared With Computer Terminal Use r s ...... 314

51. Demographics and Charge Card Use, A Cross Tabulation of Frequency Count and Null Hypotheses Tests ...... 316

52. Cross Tabulation of Selected Demo­ graphics With Lazarus Charge Card Use, Mailing Number Four ...... 3 20

53. Cross Tabulation of Demographics By Three Categories of Users: Heavy, Light, and Non-U3ers of Bank Credit Cards, Mailing Number One ...... 324

54. Demographics Cross Tabulated Against Total Number of Times Any Credit Card Was Used During the Last Thirty Days Previous to Mailing Number Four...... 326

55. Frequency Count of Demographics By Test Group, Terminal User Group, and Control Group, Mailing Number T w o ...... ~...... 329 329

56. Selected Demographics Cross Tabulated With Users of BankAmericard on the Computer Terminals During the Last Thirty Days of the City National Bank Test...... 332

57. Summary of Null Hypothesis Testing For Demographic Characteristics of the Respondents...... 334

58. Dates and Page Numbers of Advertisements Run in the Upper Arlington News During the BankAmericard Test ...... 338

59. Frequency Count of the Voluntary Re­ sponses in Answer to the Statement: "Your Comments on this Study Are Encouraged," Mailing Number Four 34 3

60. Net Public and Private Debt, End of Calendar Year, 1916-52...... 345 xiv LIST OF FIGURES

Figure Page

1. Map of Columbus, Ohio Showing Location of Research Areas...... 296

2. Flow Chart Showing Date, Number and Percent Return for Each Mailing of Ouestionnaires One Through Four, and Total Returns...... 297

3. Total Number of Credit Cards Held By Test Group Families...... 298

4. Total Use of Credit Cards, Last Thirty Days...... 299

xv CHAPTER I

INTRODUCTION

Nature and Purpose of the Study

Banks have entered the credit card business during

the last twenty years in large numbers. They were attemp­

ting to capture a larger share of the retail credit market.

Bankers were slow to enter the credit business for small,

non-durable products; however, the market for this kind of

credit has been growing rapidly. EFTS, Electronic Funds

Transfer Systems,^ are being used by a few banks. The

balance of the industry was vitally concerned as to whether

the old-style banking instruments of cash and checks would be replaced by electronics; if so, to what extent and how rapidly. The banking industry has faced many dynamic 2 changes and the introduction of advanced technology.

^EFTS, a system of movement or transfer of money or funds from a customer to a business. The transfer of actual physical money or a check is not a requirement of an EFTS. The debit and credit to the accounts involved is all accom­ plished electronically. A computer and its retrieval and storage components are an integral part of the total system. EFT is the movement of funds from customer to supplier electronically. See Appendix M for a glossary of acronyms used in the electronic credit or funds transfer industries.

^Payment Systems Newsletter, 7 (February 1975): 2.

1 Computer manufacturers have introduced new equipment for retail stores. Automated electronic cash registers and complete computerized electronic inventory and pricing systems were offered by several manufacturers. Since the market is very large and competition is keen for sales of electronic systems, the manufacturers are very interested in whether automated check stands will be accepted by con- 3 sumers and, therefore, by retailers.

Retail store operators are constantly evaluating new and better ways to do business. They are being asked by 4 bankers to accept bank credit cards and by equipment manu­ facturers to install automated check stands and electronic data processing devices. Retailers need to know whether customers will support the electronic automated front-end in the stores.

Bankers, equipment manufacturers, and retail store operators have a common need to know what the customer re­ action is to extensive use of automated check stands and computerized credit card systems. The new systems are called EFT, electronic funds transfer, or EFTS, electronic funds transfer system, in the industry.

The purpose of this study was to determine customer reaction to the introduction of a computerized credit card

■*"Proof Positive Electronic Check-Out Devices Pay Off For Buyers, Vendors,” Barron1s , May 13, 1974, pp. 3-20.

^Bank credit card and bank charge card will be used interchangeably throughout this study. system, which was in reality a basic EFTS, into retail stores where it had not been available previously. Retail stores in Upper Arlington, Ohio, which installed computer consoles to implement an electronic funds transfer system were: a grocery supermarket, drug store, ladies' beauty salon, travel agency, dry cleaner, jewelry store, hardware C store, and a restaurant, along with others. A longitu­ dinal study of a panel of consumers and an in-depth survey of the retail store personnel operating the computer termi­ nals used in conjunction with the BankAmericard credit cards, plus several trips to observe actual operation of the terminals, and a summary of data collected by a super­ market internally were the means of data collection uti­ lized.

This study was exploratory in nature. Several studies have been made of bank credit cards or of credit cards in general; however, none of them had studied consumer re­ actions and attitudes toward the introduction and use of an alternate medium of exchange, that is, credit cards. A dimension not covered in previous studies but contained in this study was the use of computer terminals and, there­ fore, an electronic funds transfer system, EFTS. The final area of interest explored was supermarket credit purchases*

^See Table 47, Appendix G for a list of the twenty- eight merchants who participated in BankAmericard com­ puterized credit card test in Upper Arlington, Ohio. 4

Since there was a combination of three variables new to the respondents of the survey it was difficult to deter­ mine the unique effects of each one separately. The three new variables were:

A. Credit card acceptance by a major, national supermarket in the respon­ dents' local market

B. Computer consoles used in conjunction with bank credit cards

C. Widespread acceptance of BankAmericard on computer terminals in twenty-eight different retail stores located in three shopping centers in one community

Background

Credit has been one of the integral parts of marketing from the very beginning of selling, or the exchange of goods between two parties. Bartels says, "Mercantile and retail credit has been inseparable from distribution itself...... g and has universally been regarded as a marketing function."

Early credit transactions were simple and were limited for the most part to face-to-face exchanges between two parties. Later, installment selling and the charging of interest became common in marketing transactions as

^Robert Bartels, The Development of Marketing Thought (Homewood, 111. : Richard D . Irwln, Inc . , 1962), p. 66. 5

businesses began to issue credit.^ The next entry into the

field of consumer credit was the bank credit card, combined

with electronic equipment at the check stand, EFT, which

allowed the customer to charge his purchases at a large

number of affiliated retail outlets, and the funds transfer

was accomplished electronically. The customer was not re­

quired to establish an account at each of the retail stores

where purchases were to be charged. A credit card was

issued by a financial institution, which shows the merchant

that the customer has established a line of credit against

which he may make purchases. There were three major types

of credit cards. The first was the bank credit card;

second, the department store or oil company credit card;

and third, travel and entertainment cards. The primary

interest of this study was the bank credit card. Dank

credit cards were the latest entry into the credit card

field, and their use is growing rapidly. The unique thing

about the bank charge card is that it is accepted by so many different kinds of retail outlets. The card is issued

by a commercial bank which anticipates making a profit when

it is used. Bank cards are accepted nation-wide by any merchant who has agreed to accept that particular brand.

For an early history of the development of install­ ment credit see Edwin R. A. Seligman, The Economics of Installment Selling, 2 vols. (New YorlTi Harper" & Brothers Publishers,' 192?) , 1:14-51. See also Theodore N. Beckman, Credits and Collections, Management and Theory, 7th ed. (New York: McGraw-Hill, 1962), pp. 1-40". 6

A national clearing house system exists to return the credit

slip to the bank issuing the card. The bank bills the cus­

tomer monthly for his purchases. The customer must pay the statement in full within twenty-five days to avoid paying

interest, or he may elect to pay only part of the statement and pay interest on the balance of the account. The two national bank credit cards in use today in the United States are BankAmericard and Master Charge.

The events leading to the development of these two major cards were not of interest to this study. It is sufficient for the purposes of the study to say that bank

Q charge cards were introduced in 19 50; however, they were slow to catch on. The introduction of the BankAmericard by the Bank of America in California and the Chase Manhattan

Bank in New York has been credited with starting the current system. BankAmericard started national franchising in 1966, and volume has been growing ever since.

3The date of first use of bank charge cards is not universally agreed upon. Lelia Easson reports 1950 as the first initiation of bank charge plans. See "New Developments in Consumer Credit," Journal of Home Economics, 51 (December 1959): 046-848. Lewis Mandell reports that Franklin National Bank of New York was the first bank to use a credit card, which was developed in 1951. See Lewis Mandell, Credit Card Use in the United States (Ann Arbor: Braun & Brumfield, 1972), 3T 7

Statement of the Problem

The stated purpose of this study was to obtain an

understanding of customer acceptance and attitudes toward

EFT via bank credit cards used in conjunction with computer

terminals located in retail stores. A special emphasis on

grocery supermarkets was also important.

One of the principal reasons found in the literature

for product failure was little or no market existed for

that particular product or service. Many new products

have been introduced into the market place when there was

insufficient consumer demand for the product either apparent

or latent. Two statements from the literature are signifi­

cant.

In this area of new product research and development, there all too often appears to be a lack of sensitivity to marketing impli­ cations on the part of the technical personnel involved. This condition is usually accompanied by an isolation of marketing personnel from these technicians, which leads to a significant gap in organizational communications and to a reduced level of new 'realized' productivity.9

Despite all the speeches made about 'marketing orientation* or 'customer orientation,' most businesses are still primarily product-or- process-oriented rather than market-oriented.10

William V. Muse and Robert J. Kegerreis, "Techno­ logical Innovation and Marketing Management: Implica­ tions for Corporate Policy," in Managerial Marketing, Policies, Strategies and Decisions (Homewood, 111.: Richard D. Irwin, Inc., 1973), pp. 193-204.

10Eugene J. Kelly and William Lazer, "Managing Innovation in Marketing," Ibid., pp. 184-192. 8

A large technical interest in EFT by commercial banks,

equipment manufacturers and retailers does exist. The

large number of electronic front-end systems available to

retail stores is evidence of this interest. Observation of

the scramble for remote terminals, computerized funds

systems and credit card customers found in commercial

banking is additional evidence of the technical interest

in EFT in commercial banking.

It is possible that the financiers and technicians

are forging ahead without considering the consumer and how

to market a new money system to him, thus setting up the

potential for another major market failure.

Consumer use, attitudes, and reaction to the intro­ duction of EFT were the major concerns of the study.

Research hypotheses were developed to answer several dis­

tinct questions about consumers and EFTS. The questions were formulated specifically for the study, as were the research hypotheses. The central role of customers and the need for a marketing-based appraisal of EFT was the rationale behind the study and the specific hypotheses developed.

The key variables of interest to the study were:

A. Demographics, particularly age and income

B. Consumer evaluation of EFTS and credit cards

C. Actual acceptance and use of credit cards by customers both before and after an extended period of increased credit card availability D. Time: Did use of, and expressed attitudes toward, the computer system increase, de­ crease, or remain the same with the passage of time?

E. Negative effects on the store or on customers utilizing the EFTS

F. Merchant views and evaluation of EFTS

Seven distinct research questions were examined:

A, Do customers presently accept credit cards

as an alternative method to cash and checks

to pay for supermarket purchases?

B. What consumer characteristics are associated

with use of the computerized credit card system

in retail stores? The characteristics examined

were: 1) Supermarket shopping and credit card

usage, 2) demographics, and 3) attitudes.

The respondents were broken into three groups

according to credit card ownership and usage.

The three groups were: 1) heavy users, 2)

light users, and 3) occasional or non-users.

The groups were as follows: 1) Heavy users

were respondents who possessed a bank credit

card, plus two or more other credit cards, and

had used them eleven or more times during the

last thirty days as reported in the first

mailing. 2) Light users were respondents who

had one or more credit cards, but not a bank

credit card, and had used cards of any kind three or more times during the last thirty days,

or a respondent who had a bank card and used credit

cards less than eleven times in the last thirty

days. 3) Occasional or non-users were respon­

dents who did not have a bank credit card and who

used other credit cards two or less times during

the last thirty days.

Were customer characteristics, listed in question

number two above, the same for all types of credit

card users? Were the users of in-store consoles a

typical subset of credit card users or were there

significant differences between console users and

users of credit cards in general? If there were

differences, what were they? How did heavy credit

card users compare with non-users? How did com­

puter console users compare with non-users of the

EFTS?

What impact over time did in-store computer console

availability have on customer usage of the console?

Did usage increase, decrease, or remain consistent?

Was the pattern of usage monotonic or fluctuating?

What were the dysfunctional aspects of computer

consoles for retail credit card usage?

What changes, if any, were indicated by the re­ spondents to make the computer console an accep­

table way of charge card usage in retail stores? IX

G. What was the response of the merchants who had the

electronic funds transfer equipment installed in

their stores? Did they like automated credit?

Was it beneficial to the store as well as the cus­

tomer? How did the merchant perceive customer

acceptance and use of the EFTS?

The problems identified were only a few of the many

questions which are a part of the credit card situation.

The above problems highlight some of the research needed

to develop additional knowledge and insight into consumer

credit card usage. The guiding hypotheses of the research undertaken is shown in the next section.

Guiding Hypotheses

The hypotheses were formulated specifically to respond to the issues identified by the key variables which are listed above. Several writings of the hypotheses, followed by intensive analysis and discussion with graduate students and faculty at The Ohio State University, finally resulted in the hypotheses used in the study.

The guiding hypotheses were divided into two sections with a number of specific null hypotheses in each. The underlying rationale for each section follows:

The first guiding hypothesis for the study was based on the marketing concept which can be read to suggest that a market offering which does not have perceived customer advantages will not be successful. 12

III: If little or no advantage is perceived by the customers from EFT, then use of the terminals and credit cards on the computer terminals will not be widespread.

The specific hypotheses tested are found in Appendix H.

H2: Consumer acceptance and use of computer terminals for credit transactions at retail outlets will vary with demographic differences of the consumers.

Methodology

A panel of 277 women was selected on a systematic basis. Every fifth residence listed in the Haines Criss-

Cross Directory in the survey area was selected. This pro­ cedure was followed until 202 respondents were selected from the test area, which was an area within a three-quarter mile radius around a shopping center where the merchants installed computer terminals. A supermarket in the shop­ ping center used computer terminals at the check stands as a part of the test in Upper Arlington, Ohio, The seventy- five member control panel was selected from a similar area of three-quarters of a mile radius around a shopping center in Worthington, Ohio, where no computer terminals were in­ stalled. Both Upper Arlington and Worthington are prestige addresses and are part of the greater Columbus, Ohio metro­ politan area. Most residents of both areas are upper- middle or upper income families.^ Both samples included

^Survey of Buying Power, Sales Management 9 (June 10, 1970): D 121-122. 13

people living in single and multiple-family residences.

The actual determination of the radius of homes to be

included in the sample was made after a tour of the trading

areas of both shopping centers. All of the streets were

traversed, and the primary trading area was identified.

The samples were selected from homes within this three-

quarter mile trading area surrounding the two shopping

centers.

The residents of the addresses selected from the

Haines Criss-Cross Directory were contacted by phone and

asked to cooperate in a study being conducted by The Ohio

State University. Each respondent was advised that there were four questionnaires to be sent to them by mail, which

they were to fill out and return to Dr. LaLonde at The Ohio

State University. A stamped, self-addressed envelope was

included in each mailing with a cover letter urging the panel member to return the questionnaire promptly and 12 expressing appreciation for the cooperation. On the second, third and fourth mailings, only those who returned the previous questionnaire were sent the next one.

All of the questionnaires used in the study were for­ mulated specifically for the research undertaken and were devised to elicit the data desired from the panel of con­ sumers or the retail merchants. Many drafts of the proposed

12 See Appendix A for a copy of the correspondence sent to the consumer respondents. 14 questionnaires were prepared and discussed with several

researchers at The Ohio State University. The final draft questionnaires were distilled from the many questions which had been proposed or found in the literature. The question­ naires were not sent out to the consumer panel until after

they had been pre-tested and revised, as described in

Chapter Three.

The four consumer questionnaires were composed of three different parts:

A. An attitudinal measure with a Likert-type scale

from "strongly agree" to "strongly disagree" with

the statements on the questionnaire was sent as

a part of each of the four mailings.

B. The first and last questionnaires included a

section of questions about the respondents'

supermarket shopping activity and actual use

of credit cards during the last thirty days*

C. Demographics of the respondents were obtained

in the second mailing. The demographics col­

lected were: 1) number and age of children,

2) home ownership, 3) education, 4) marital

status, 5) occupation, 6 ) income, 7) age,

and 8 ) mobility.

Demographics were analyzed for statistically signifi­ cant correlation with various clusters of expressed atti­ tudes and/or credit or shopping conduct of the customers 15 sampled in the study. Special interest was shown to corre­ late between age and changes in use of credit and/or EFT.

At the end of the test, in-depth interviews were con­ ducted with the owners, managers, and retail clerks who were operating the stores and the EFT terminals during the test. A questionnaire was utilized in the interviews, which were conducted in person by two graduate students of

The Ohio State University. The questionnaire was designed specifically for the study, following the same method as the consumer questionnaires, to obtain the merchants' view of the consoles and their customers' use of credit cards on the computer terminals in the retail stores. During the test period the author used his BankAmericard to make pur­ chases in the cooperating stores. It was not equipped with the special magnetic strip, but it was readily accepted by all stores when presented.

A summary of the number of questionnaires mailed and the dates of the mailings is found in Figure Two, Appendix

E.

Limitations of the Study

The findings of the study may lack generalizability to other areas of the country because the two communities se­ lected for the study are both upper-income areas. The re­ sponses were skewed toward the high end of the income scale.

Respondents may have reacted to the technology of the com­ puter terminals rather than to the automated credit system 16

that was tested. No attempt was made to separate consumer

reaction to the technology from reaction to the automated

credit system, nor to measure any interaction between the

technology and the credit system. The fact that respon­

dents knew the EFTS was a test may have influenced their

responses. Minority groups were not well-represented in

the two communities used in the study and were not identi­

fied as a separate variable in the study.

Potential Contributions of the Study

Electronic funds transfer systems, EFTS, is currently

the glamour item in financial circles and the predicted wave of the future for both banking institutions and re­

tailers. As shown in Chapter Two, the literature is full

of predictions and programs about EFTS. More importantly,

retailers are now installing electronic cash registers, and

the banking community is promoting twenty-four-hour ban­

king, which is implemented by using automatic money machines. Credit cards, remote access to savings, debit cards, NOW accounts, direct deposit of checks, and auto­ matic bill-paying are parts of a total EFTS now offered and extensively promoted by banks and savings and loan asso­ ciations. The study was conducted to gain an appreciation of consumers' wants, needs, and attitudes toward EFT and the various features that were either desirable or un­ desirable in an EFTS. Success or failure of an EFTS is dependent upon the

customers it attracts and keeps. The study was written to

provide much needed information about consumers and their

reaction to EFTS and their wants, needs, and desires in a

payment system, automated, electronic, or other.

Specific areas of potential contributions were:

1) identification of consumer demand for EFT, 2) identif cation of the market segment that used EFT, 3) types of goods customers did or did not purchase with a credit card

4) operational problems perceived by the consumers, 5) suggestions given by consumers for improvement of the system, and 6 ) appraisal of EFT by the merchants actually using the system.

Since data from the consumer panel was analyzed in conjunction with data from operators of retail stores, stronger conclusions were drawn when both sets of data agreed. The combination of data collected from two in­ dependent sources tended to strengthen the study as well as to give it a broader data base.

Organization

The organization of the study includes the following five chapters:

1. Introduction

2. Contemporary Views on Consumer Credit, Credit Cards and Retail Electronic Funds Transfer Systems 18

3. Research Design

4. Findings

5. Conclusions and Recommendations

The first chapter provided some background on the

development of credit cards by commercial banks and some

of the problems which were intrinsic to extension and

growth of bank credit card plans. A description of both

the scope of the study and the hypotheses to be tested were

presented. The methodology of the study and its limitations were cited. Finally, a brief review of potential contri­ butions of the study was made.

Chapter Two of the study reviews the literature as it pertains to consumer credit, past and present. The emerging application of electronic cash registers and electronic funds transfer systems was included in the second chapter.

Banks and credit cards and changing consumer demographics as related to credit card usage were also discussed. The final area researched in the literature was point-of-sale systems and the Universal Product Code, UPC, in retail stores and consumer attitudes toward them.

Chapter Three was the research design chapter and set forth first, the basic design of the study, which was a longitudinal study of a panel of consumers. A description of how the sample was selected and the four questionnaires mailed to the sample were discussed next. 19

Data gathering by use of the questionnaires and the

methods of analysis were explained in Chapter Three. Since

the study was exploratory in nature/ most of the statis­

tical procedures used in the data analysis were descriptive

or associative in nature. These procedures were described

in the design chapter.

Findings from the data was the topic of Chapter Four.

Included in this chapter were findings relative to the re­

search hypothesis, customer use of credit cards, and demo­

graphic variables, and consumer attitudes concerning credit

card usage in the purchase of small, non-durable items in

conjunction with the use of computer terminals in retail

stores.

Changes in customer use of credit cards and attitudes

toward them were analyzed, and the findings were presented

in Chapter Four. Other findings were incorporated as the

concluding part of the analysis chapter.

The fifth and final chapter contained conclusions and

recommendations. They were presented in areas relative to

the research hypotheses and marketing practices in banking,

grocery supermarkets, and other retail stores. Implications were drawn in relation to the marketing concept, consumer

adoption of electronic credit systems, and dysfunctions of

the City National Bank test program. Finally, suggestions

for further research were made. 20

Summary

The study has been designed as a longitudinal study to determine customer use of an electronic funds transfer sy­ stem. The focus of the study was on computer terminals for use with credit cards in making retail purchases in a grocery supermarket and other retail stores.

The method of research selected was a panel study of consumers within a three-q ia: .*r mile radius of a shopping center participating in a . ^unericard test of computer terminals in retail store A control center was also se­ lected in a similar suburb of Columbus, Ohio.

Four questionnaires were mailed to the panel members during the nine months of the test. The questionnaires contained attitude questions as well as questions about shopping practices. Data was also collected on consumer demographics. In-depth interviews were conducted with the retail managers and clerks in all twenty-eight participating stores.

Potential contributions of the study were identified in two major areas;

A. EFTS acceptance by the consumers

D. Features of an EFTS which were attractive to

consumers and characteristics which were

undesirable CHAPTER II

CONTEMPORARY VIEWS ON CREDIT, CREDIT CARDS AND

RETAIL ELECTRONIC FUNDS TRANSFER SYSTEMS

Chapter Two contains a review of the literature related

to the topic of consumers and electronic funds transfer sy­

stems. Topics researched included: the historical setting

of credit, why banks are interested in computerized credit,

credit cards and consumer life-style, changing customer

attitudes vis-a-vis credit card usage, point-of-sale tech­ nology in retail stores, and developments in the banking

industry affecting how the customer pays for his purchases.

Historical Setting of Credit

Profit was the driving force behind most of the settle­ ment of Colonial America, according to Ben B. Seligman.

The drive for profit and the necessary investment in land, homes and businesses was brought about by both the co­ operative trading companies of Great Britain and a credit system that was considered by some to be oppressive and immoral. "Credit was not only extended for usurious rates of interest but also was used to gain power and control over other businesses and the people who supported them.

21 22

Thus the American nation was founded upon merchants, tra­

ders and credit.”^

Edwin R( A. Seligman wrote early in the twentieth

century about the development of credit and installment

buying in America. Seligman identified four distinct types

of credit in the historical progression of the use of

credit. They were: first, the personal or individual

credit that one person provided to another. Early personal

credit was usually designed to meet temporary shortages of

cash because of an emergency or unusual conditions in the

normal life pattern of the recipient of the credit. The

second phase or type of credit was an advance made for

living expenses usually in the form of the necessities of

life, during the time required for the ripening or harvest

of goods or the receipt of funds therefrom. The third

type of credit was listed as the development of credit for

trade and commerce rather than for agricultural crops as

in the previous example. Banks were noted for commercial

credit of the third type and received criticism for charging

interest on commercial loans. The fourth and final type of

credit discussed by Seligman was consumer credit or credit

^Ben B. Seligman, The Potentates: Business and Businessmen in American History (New York: Dial Press, 1971), pp. 6-19. 23

"used in order to facilitate the placing of goods in the

hands of the consumer.”2

Installment buying is consumer credit. The definition

of installment buying given by Seligman is "a transfer of

wealth, the payment for which is deferred in whole or in

part to the future and is liquidated piecemeal or in suc­

cessive fractions, under a plan agreed upon at the time of 3 transfer." Seligman devoted most of his first volume to a

description of the development of installment selling and

the reporting of various studies which show how widespread

the use of credit was at the time his book was written.

Beckman said that credit was not a part of the economic

system of "ancient peoples." There was lending of money on

a personal basis, to be sure, but loans were regarded as

charity and were made almost exclusively on the consumer

and personal level to the poor and needy. Interest on 4 loans was not only frowned on but was prohibited by law.

Contemporary Credit Practice

Contemporary credit practices differ markedly from

the credit and power discussed by Ben Seligman and the laws

2 Fdwin R. A. Seligman, The Economics of Installment Selling, 2 vols. (New York: Harper & Brothers, 19 27), 1:2-125.

^Ibid., pp. 144-153. 4 Theodore Beckman, Credits and Collections: Manage­ ment and Theory, 7th ed. (New York: McGraw-Hill, 1962) , pp. 5-10“ A broader description of the history and philo­ sophy of credit is also found in Beckman. 24 preventing interest for credit described by Beckman. The movement from the earlier eras to the present-day structure of the credit market is outlined by Bartels, who says that modern credit practice developed early in this century along with the development of other are^s of marketing interest, such as advertising, selling and retailing. Bartels says;

Its topical development was not uniform; rather, the literature was characterized by subjects of changing contemporary interest. Mercantile credit was the subject of interest from 1900 to 1920. Then retail credit was of ascending importance in the 19 20’s and personal and sales financing in the 1930's...... The economic implications of credit were widely discussed during the growth of installment selling and during the depression of the 19 30's...... following 19 40, thought developed mainly along lines already then established.^

The contemporary American credit scene is one of rapid changes in interest rates, extensive use of credit by the consumer, and many different credit plans for consumers to select from. Department stores offer revolving charge plans, thirty-day charge plans, and installment credit, and often use a plastic credit card to provide customer iden­ tification. Many individual merchants offer personal credit to their customers. Commercial credit firms are active in promoting the use of credit by the buying public, and banks have multiple plans to provide the consumer with credit for

^Robert Bartels, The Development of Marketing Thought (Homewood, 111.: Richard D. Irwin, Inc., 1962), pp. 66-67. 25

everything from the purchase of a home with mortgage credit

to the use of a credit card for large or small purchases

of both durable and non-durable goods. It is, however,

historical fact that the banks were slow to recognize the

need to offer financing of small non-durables.

Department stores have credit plans of their own and

seem intent on keeping them as a way of developing more g business. The major oil companies have also developed

extensive credit systems to promote business. The bank

credit card has been promoted as a universal credit card to

replace other credit cards. However, department stores and

oil companies have not cooperated and discontinued their

credit cards as the bankers had hoped. The major reason

given is that credit cards give the merchant a competitive

advantage which the merchant does not wish to relinquish.

There are two major bank credit card plans and several

others now active in the United States. The two major plans are BankAmericard and Master Charge.

The volume of charge sales recorded on bank charge cards in 1970 exceeded seven billion dollars; over 275

®See Roger S. Bonk, Dank Cards: Addition or Erosion (New York: National Retail Merchants Association, 1975). For a detailed report of the impact of bank credit card plans on the American banking scene see Bank Credit Card and Check-Credit Plans (Wash., D. C. : U~ Gov't. Printing Office, 1968). See also "Credit-Card and Check-Credit Plans at Commercial Banks," Federal Reserve Bulletin 59 (September 1973): 646-653. See also Robert B V Shay and William C. Dunkelberger, Retail Store Credit Card Use in New York (New York: Columbia University Press, 1975), particularly Chapter 2. 26

million credit cards were in possession of American con­

sumers, of which over fifty-five million were bank cards.

Well over a million retail stores in the United States and

other countries accepted a credit card as payment for their 7 goods and services.

A more recent study of all kinds of credit cards by

Lewis Mandell of the Survey Research Center at the Institute

for Social Research at the University of Michigan indicated that half of all American families use at least one credit card. The primary determinants of credit card usage were income and education of the family and the life-cycle stage of the family, as well as the size of the community in which the family lives. Also reported was the fact that credit cards issued by one store, such as a department store, are the most used of all credit cards. The average number of uses per month was three for families who use a credit card. A user of a department store credit card is

7 Irwin Ross, "The Credit Card’s Painful Coming of Age," Fortune 88 (October 1971) : 77-156 describes the development of bank charge cards, provides the statistics quoted above and outlines how bank charge cards are handled by the banks and also the problems for the issuing institution. A des­ cription of the electronic cash and credit system and several graphic presentations of sales credit and cash credit are presented in V/iIlian C. Dunkelberg and Robert W. Johnson, EFTS And Consumer Credit; Working Paper No. 2 , rev. (Ind.: Purdue University, Krannert Graduate School of Industrial Administration, 1975), pp. 5-24. 27 more likely to use another type of credit card than a non- g user of department store credit cards.

Volume of Bank Credit Card Usage

The Federal Reserve Bulletin, March 1974, reported that the amount of credit outstanding on bank credit cards had grown in excess of fifty percent since the end of 1971 to over 4.5 billion. Payment Systems Newsletter reports:

"Credit card volume for 1975 was 19.6 billion dollars, a forty-six percent increase from 19 73. Outstanding balances on bank credit card accounts was 9.1 billion dollars at the end of 1975, which is a thirty-eight percent increase over

1973."9

TABLE 1

CREDIT CARD VOLUME AND OUTSTANDINGS 1967 TO 1975

Bank Credit Bank Credit Card Card Volume Outstandings Year-End Year {Millions) (Millions)

1967 NA 828 1968 2,203 1,307 1969 4,398 2.639 1970 6,768 3,792 1971 8 ,275 4,419 1972 10,145 5,288 1973 13,458 6,649 1974 17,063 8,242 1975 19,600 9,101

®Lewis Mandell, Credit Card Use in the United States (Ann Arbor, Mich.: Braun & Brumfield, 1972), pp. 1-3. 9 Payment Systems Newsletter 8 (March 1976):6. Consumer use of bank credit cards is increasing as a substitute for small, short-term loans as well as a sub­ stitute for cash and checks. The balance on active bank card accounts at the end of 1972 was in excess of $250 average; retail purchases using bank cards were about $20 per transaction, and cash advances averaged more than $100 each. Also reported was "fewer than three of every ten accounts typically are paid within the interest-free period."10

Terminology used in banking circles to describe the evolving system of computerized credit, credit cards and electronic record keeping is "Electronic Funds Transfer

Systems," or simply EFTS. The next section of the study describes the development of the EFTS concept and discusses where the banking industry is in terms of funds transfer technology.

Electronic Funds Transfer

Many developments have occurred in the last ten years in the payment mechanism used by consumers and merchants in America to handle the myriad of commercial transactions which make up the consumer market place today. Early pre­ dictions of a checkless-cashless society have faded and

10Federal Reserve Bulletin 60 (March 1974): 181. See also Kenneth J. White, "Choiceand Use of Bank Credit Cards A Model and Cross Section of Results," Journal of Consumer Research 2 (June 1975): 10-18. 29

have been replaced by talk of the emerging electronic funds

transfer system, EFTS. According to experts there are three

major elements in an EFTS. These three elements are:

1 ) a computerized, on-line system for retail merchants,

which is on-line to a regional computer center, 2 ) an on­

line banking system which provides the regional computer

center and the access necessary for the retailers to acti­

vate and use their computerized check out system, called

POS system, 3) customer identification, such as a credit

card or a number system, and some means of positive identi­

fication, such as a secret check number, voiceprints or

fingerprints, which can be machine read.^

Search of the current literature for the study of

EFTS was organized around the three elements identified

above plus developments in the technology of funds transfer

and examination of existing consumer life-styles and atti­

tudes that will be supportive for, or detrimental to, an

EFTS payments mechanism in the United States.

Predictions were made during the 1960's that computers

would soon be used in most if not all consumer transactions,

that money would not be necessary and that businessmen and

Consumer Credit in the United States, a report of the National Commission on" Consumer Finance (Washington, D.C.: U. S. Government Printing Office, 1972), p. 205. 12 bankers had better get involved quickly. That the pre­ dictions did not materialize as envisioned is obvious in the market today.

12 See for example L. Reistad, "The Coming Cash­ less Society," Busines Hr izons 9 (Fall 1967) :23-32. "Money Goes Electronic . i.ne S & L*s," Business Week, January 13, 1968, pp. 7G. David L. Markstein, "Is A Checkless Society Ahead." American Dairy Review, March 1969, pp. 44-46. Harold J. Ashe, "What About Charge-Card Credit For Your Clients?" Veterinary Medicine/Small Animal Clinician, June 1963, pp^ 596-597. Ross“ C r e d i t and Credit Cards," pp. 77-156. Monthly Review Federal Reserve Bank of San Francisco, September 19 67, pp. 171-177. "Cus*tomers Respond Well to Tests of Card Terminals," Banking 63 (December 1971) :46. Bank Credit-Card and Check- Credit Plans , Board of Governors ,' The"'"Federal Reserve System, July 1968, a 120-page booklet. "What Ever Happened to the Cashless Society?" The Morgan Guaranty Survey, Morgan Guaranty Company of New York, February 19 72. Allan Wetterhaus, "The Cashless, Checkless Society: On Its Way?" Computers and Automation 7 (November 1972):14-19. William D. SmitKT ""The "checkless" Society: Human Beings Causing the Chief Delays," The New York Times, 21 May 1967. Robert L. Kramer and W. Putnam Livingston, "Cashing In On the Checkless Society," Harvard Business Review 45 (September 1967) :141-148. David L. Markstein, "The Pros and Cons of Credit Cards for the Hospital Field," Modern Hospital 48 (June 1970):70-73. Edwin B. Cox and Paul E. Giese, "Now It's the Less-Check Society," Harvard Business Review 50 (December 1972):G-18. "We'll All Be Using Them One Day," The Economist 255 (September 23, 1972):59-60. Robert A. Hendrickson, The Cashless Society (New York: Dodd, Mead and Company, 1972), Chapters 2, 3. 31

The literature still has an optimistic note relative

to the coming of electronic money, but the feeling is that

it will come more slowly.33 William F. Ford, director of

planning for the American Bankers Association, is one who

feels that electronic funds transfer is advancing and lists

eight points of progress that are being made which he feels

are steps toward the less-check, less-cash society. They

are: 1) American corporations now routinely arrange to move funds and transmit related financial messages over the

’'bank wire." 2) Extensive field experimentation with point-of-sale terminals is now being carried out. 3) Cash dispensing machines and other automated teller facilities

are being installed by many banks. 4) More than sixty million individuals are now using plastic bank credit cards.

5) Many large retail businesses will soon feel the impact

13 Nancy Brumback, "Disagree On EFT Potential, Agree On Working Together," Supermarket News 25 (May 10, 1976) :19. Joseph S. Coyle, "EFT’s Promise, From a Bad Check Break­ through to Food-By-Credit," Progressive Grocer 55 (February 1976) :39. "EFT Faces Big Chicago Setback,',r Progressive Grocer 55 (February 1976) :20. And "It’s Really Here: The Electronic Transaction At the Cash Register," Savings and Loan News 87 (May 1976):62-66. William F. For3^ "Less- Check, Less-Cash Society," Nation's Business 61 (October 1973):45-46. "Bank Cards Take Over the Country," Business Week, August 4, 1975, pp. 44-54. See also Donald P. Jacobs, "Technology in Banking's Future," Bankers Magazine 156 (Summer 1973):23-26. "The Quickened Pace of Electronic Banking," Business Week, September 7, 1973, pp. 116-124. "Technology Assessment of a Less Cash/Less Check Society: A Study by Arthur D. Little, Inc. for the National Science Foundation," by Dr. Edwin B. Cox, Unpublished Paper de­ livered at the Marketing EFTS Workshop 1974, Key Biscayne, Florida, January 15, 1974. 32

of improved EFTS technology in their billing and collection

processes. 6 ) Corporate financial officers can now realis­

tically look forward to the day when it will be considered

routine to obtain an instantaneous electronic update of the

condition of all their accounts at financial institutions.

7) In many major urban areas, large firms are now being

approached by banks offering direct deposit of payroll

services. 8) Banks are moving toward the bounce-proof

check and "free" checking services.

The drift to more computers and/or electronic transfer

of funds is being accomplished with little fanfare and in

many instances without the knowledge or interest of the

consumer. The one negative point made by Mr. Ford is:

"Before a more fully developed EFTS can be marketed, some

formidable problems of gaining consumer acceptance must be

addressed. In addition, a host of legal and regulatory

impediments virtually guarantee that the 'checkless society1 15 is not just around the corner.'

The Social Security system and the United States Air

Force are currently testing a program of mailing social

14Ford, "Less-Check, Less-Cash Society," pp. 45-46.

^"Push Button Banking is Running Into Trouble," U. S. News and World Report 80 (July 7, 1975):76-78. See also "St. Louis Bank Told to Lay Off Two Tellers— Electronic Ones," The Wall Street Journal, 19 November 1975, p. 48. Also "U. S. Restrfeting EFT Operations by National Banks," Supermarket News 24 (May 19, 1975):25. Also "Court Rules Banks Must Obey States on Remote Hookups," Wall Street Journal, 24 March 1974, p. 8 . 33

security checks directly to the bank specified by the re­

cipient of the check for deposit directly to the account of

the individual. The individual must come in and sign an

authorization form allowing the bank to receive the check

and deposit it directly to the account of the recipient without having the check endorsed. Checks may be deposited

to either savings or checking accounts. "The Treasury's ultimate goal is to develop by late 1976 a nation-wide pro­ gram to convert Social Security benefit checks and belated government payments to an EFTS system.As of July 3,

1975, 210,000 people in Florida had signed up for the 17 Social Security direct deposit program. The Air Force pro­ gram is expected to be depositing 300,000 payroll checks electronically by the end of 19 75.^®

Mr. Edgar Register projected the following sequence of events in the development of the direct deposit program of the Social Security Administration: "We now receive

^ S e e "News You Can Use in Your Personal Planning," U. S. News & World Report 80 (June 16, 1975) :69. "ABA to IfeTp"’Treasury with Direct Deposit of Social Security Checks," Banking 66 (October 1974):134. See also ad of First Bank and Trust, The Boca Raton (Fla.) News, 23 March 1975, p. 7Ar ad of Boca Raton National Bank, The Boca Raton (Fla.) News, 30 March 1975, p. 14A; ad of Atlantic Federal Savings and Loan, The Boca Raton News, 20 March 1975.

l^See Arthur Becker, "Direct Deposit Social Security Program," Record FSLL 10 (July 1975):9.

*®See "Bank Cards Take Over the Country," p. 5 4 . 34

the checks from the government in batches. Next, we will

receive one check with a list of names to credit, and

finally we will receive a disc for the computer, and it

will all be done electronically."19

Basic changes in the nation's system for handling money payments as essentially transitional steps toward replacing the use of checks with electronic transfer of funds...... In further development of the payments mechanism, the convenience and needs of the participants should con­ tinue to be the primary considerations. These needs may be summarized as follows:

Consumers need an economical means of payment that is acceptable anywhere; is less subject to theft than cash; is less subject to loss, forgery, and alteration than checks; facilitates the keeping of necessary personal records; and enables them convenient access to a wide range of services from financial institutions.

Businesses need a system that reduces the time, costs, and risks in making and re­ ceiving payments; that facilitates the transmitting, storage and retrieval of associated information; and that pro­ vides better integration of business electronic data processing capabilities with the payments mechanism.

Financial institutions need a more ef­ ficient system of transferring funds-- one that is less labor intensive--a system that will enable them to offer customers a wider variety of services, including informational services based on the improved data generated by the pay­ ments system. Government needs are

19Interview with Mr. Edgar Register, First Vice- President, First Bank and Trust NA, Boca P.aton, Florida, March 20, 1975. 35

similar to those of business, but with the additional special need for greater security against theft of checks issued to the public,

Some have maintained in the literature that the tech- 21 nology is here to accomplish the EFTS now. However, there

are several problems in planning the system, how it will be

implemented, financed, and introduced to both the economic community and the consumer user that remain to be solved.

Unresolved issues as listed by Binder are: 1) Federal

Reserve policy, 2) payment systems control, 3) standards for entry terminal points, 4) ownership of terminals, clearing networks, and payments processing, 5) regulation,

G) cooperation or competition between banks and/or between banks and savings and loan associations, credit unions and others, 7) government participation, 8 ) amount, type, control and costs of consumer credit, 9) freedom of choice by potential customers, and finally 1 0 ) individual privacy.

In Binder's view these problem areas are possible to solve; indeed, he states:

20 "Evolution of the Payments Mechanism," Federal Reserve Bulletin 58 (December 1972):1010. 21 See "Equipment, the Front-End: Lots of Choice," Progressive Grocer 55 (May 1976):48-57. See also "On- iTine Phones Off the Hook," Datamation 20 (February 197 4) : 81. Kramer and Livingston, "Cashing In On the Checkless Society," p. 141. See also statement of George W. Mitchell, Vice-Chairman, Board of Governors, Federal Reserve System, Federal Reserve Bulletin 59 (December 1973) :878. 36

"Much work has been done to arrive at solutions." How­

ever, much work yet remains on each of the above pro­

blems . ^

Predictions for the implementation of the "paperless"

society now are that it will be from five years in the

future to about fifteen or twenty years hence before the

paperless society is a reality. The major hurdles re­

maining to be leaped are not technical in nature but rather,

legal, managerial, human and financial. The planning,

assigning franchises and access to the network, providing

the massive funds for the electronic hardware and software

and, finally, developing plans that will be acceptable to

the retailers and consumers who will be using the system 23 are the next steps that must be accomplished.

22 Mark G. Binder, EFTS: Electronic Funds Transfer Systems (New York: Kennika t Press, T97 5T, Chapter 4. 23 "Retailers Ask Active EFT Role," Supermarket News 24 (June 9, 1975):1, 29. See Lee Paulsen, "A Retailer Looks at EFTS," Unpublished Paper presented at Payment Systems Symposium, New York, June 5, 1973. See also M. A. Berk, C. W. Dunbar, and C. C. Hobson, "Design and Per­ formance Considerations For the Retail Store System," IBM Systems Journal 14 (January 1975). "Retailers Ask Active EFT Role,tr p. 1. See also "Checkless Society Is At Least 5-10 Years Away, ABA Told," Management Adviser 12 (January/February 1974): 8 . Also "Paperless Credit Within Decade Foreseen by ABA," Data Management 12 (February 1974) -.15. Also see a statement by John S. Reed, Executive Vice-President, Citicorp, in "Bank Cards Take Over the Country," p. 52. Also "A Court Test Delays Electronic Banking," Business Week, July 7, 1975, p. 21. And "Check­ less Banking is Available, But Public Sees Few Advantages," Wall Street Journal, 18 November 1975, p. 1. 37

A different view of the issues, problems and battle-

lines was given in Datamation, February 1974. Some of the problems discussed were: 1 ) ownership and operation of the various segments of a nation-wide EFTS, 2) extent and conditions of access, 3) how cost should be allocated,

4) the battle between commercial banks and thrift organi­ zations, 5) potential anti-trust issues if joint ownership of switching portions of the system is proposed, 6 ) Selling the concept to potential users. A member of the American

Bankers Association says: “For years we've trained the customer to think of his canceled check as hi3 receipt.

He wants to see that check in front of him. Now a new attitude must be developed by the customer; he must be willing to accept an entry on his bank statement as a receipt."2^

Use of the SCOPE program in California was reported to be slow because of a general lack of understanding by both bankers and customers. Some bank executives resisted be­ cause of vested interests or existing successful programs.

Legal barriers, such as laws requiring utilities to inform all customers of the basis of all charges, also limited the use of automated bill paying.

^"Electronic Funds Transfer Systems: Broad Issues and a Sepia-Colored Stage Coach," Datamation 20 (February 1974):80-82. "FHLBB Extends EFT Tests and Third Party Transfers to Electronic Means,'* Payment Systems Newsletter 8 (March 1976):4. 38

The literature for the last five years has been re­ porting that the technological problems have been solved to a satisfactory degree for the banking industry. "Equip­ ment reliability, once a severe problem, has improved to ninety-eight and one-half percent reliability," according to the American Bankers Association.^ A discussion of the literature on point-of-sale technology in retail stores is contained in the next section.

Point-of-Sale Technology in Retail Stores

Discussion of credit purchasing in the grocery super­ market industry in the 19 60's centered around acceptance of a bank credit card by supermarkets. One thing that most of these articles had in common was that they were located on back pages of the publications that published them.

Credit cards were being experimented with--with mixed results and mixed emotions, but credit and credit cards

Money Machines," The Boca Raton (Fla.) Hews, 1 June 1975, p. C 1. Sno also white, "Consumer Choice and the Use of Bank Credit Cards," pp. 10-18. 39 2 fi were not front-page news. A number of independent super­

markets and some chain stores made tests to determine what

the effects of credit cards would be on business volume and

costs. One of the leaders in these tests was the Kroger

Company. They conducted a test on credit cards in 1964 and

dropped them in 1965, and were a part of the Columbus, Ohio

test in 1971-72. They tested a "fixed-slot" scanner and

computerized credit card system in 1972-73 in Kenwood, Ohio,

which was reported to be the first such test in a super- 27 market in the United States. A test of similar equipment

was reported from Switzerland and was hailed as a “tech­

nical triumph but an economic question mark."28 The first,

*■^500 the example “Mixed Results So Far For Food Store Credit Cards in Northern California," Weekly Digest, October 14, 1967, p. 3. See also "Corti's Atmosphere Lures Big Order Buyer," Progressive Grocer 41 (October 1962) :139. “Groceries On the Cuff Give Roost to Sales," Business Week, August 20, 1966, p. 134. “Fifteen PDQ Wisconsin Stores Using Charge Card Program," Supermarket News 104 (April 3, 1967) :32. "Food Town Starts Pilot Charge Plan,1* Supermarket News 104 (July 31, 1967) :25. “Ingle's Accepts Credit Pur­ chases," Supermarket News 104 (November 20, 1967):24. "Two K-Marts Join Credit Card Plan," Supermarket News 10 4 (October 16, 1967):49. "Credit Plan Works for New York Supers," Progressive Grocer 47 (January 1967) :94. “Louis* SF Bay-Area Chain OfferingMaster Credit Card," Supermarket News 104 (August 21, 1967):2. "Credit in Supermarkets," Non-Foods Merchandising, March 1969, p. 65. Howard H. Fogel, '‘"Credit Cards: Blight or Blessing for Supermarkets?" Supermarketing, August 1969, p. 51. "Credit Card Buying On Way Out of SF," Supermarket News 106 (June 30, 1969):22. 27 “The Data Explosion at Point-of-Sale," Chain Store Age 49 (February 1973):E24.

“APOSS Technical Triumph, Economic Question Mark?" Progressive Grocer 51 (December 1972):36-39. 40

full-scale store test of the automated front and featuring

symbol scanning and price look-up were conducted at Migros

Cooperatives Store in Griefensee, outside Zurich, where the

$33,000 weekly volume went through the four check stands.

All four were equipped with a Zellweger Laser-scanner, coin

dispenser, and registers for manual data input. Two digital

computers, two teletypes, and a control device provided

electronic controls and communications. The test showed:

1) Over-all performance of equipment was excellent. 2)

Productivity was not significantly better than a traditional

check out system. 3) Scanning accuracy was phenomenally

high. 4) The costs of the system without source marking

appeared to be totally prohibitive.

At an industry convention and show stages to demon­

strate available technology held in Dallas, Texas the first

week in May 1974, a number of automated grocery supermarket

front-end systems were demonstrated. IBM demonstrated a

laser beam system. Singer showed its MDTS, Modular Data

Transaction System, hardware. NCR, TRW and REI were also

in attendance to show their wares, as were other equipment 29 suppliers. The concensus of convention visitors as

reported by Darrons1 was that "Retailers will not be 30 clamoring to buy electronic POS systems right away."

2 9 For a listing of available systems see "Summary of Supermarket Point-of-Sale Systems," (Chicago: Supermarket Institute, Spring 1974).

30"Proof Positive," p. 17. 41

Also reported was that Optical Character Recognition, OCR,

was favored by most of the retailers and equipment sup­

pliers, as a POS system, that the technology is with us

today to do the required tasks for the supermarket, but that

the price tag is too high for all but the largest super­

markets. A universal product code system has been developed

by the Grocery Manufacturers of America, GMA, that was being

printed on sixty-six percent of grocery and drug store pro­

ducts in June 19 76 and will be on most convenience goods

soon.

Discussions of the advantages and disadvantages of a

scanner system using the UPC and electronic cash registers

has been front-page news during most of 1976 in the grocery

industry. The advantages of using the system were listed

by participants at the National-American Wholesale Grocers'

Association Convention held in Chicago, Illinois in March

1976. They were: 1) better control of cash at the check­

out counter, 2) faster customer throughput, 3) unbeliev­

able accuracy, 4) better inventory management, 5) improved

labor scheduling at the front of the store, 6 ) productivity

improvement, 7) fewer checkout lanes, 8) shelf space

allocation improvement, 9) better scheduling of perishables display and worker scheduling in perishable departments,

1 0 ) reduced out-of-stock situations, 1 1 ) faster evaluation 42

of new products, and 1 2 ) effectiveness of various types

of promotion.^

The disadvantages listed were: 1) consumer loss of

the traditional proof-of-purchase, 2 ) loss of customer

price awareness, 3) loss of "float time,” 4) loss of

ability to stop payment on a check if the sale is unsatis­

factory, 5) potential area for fraud in EFT, 6 ) loss of 32 privacy of consumer information, 7) consumers' lack of

understanding of EFT and UPC, 8 ) adverse customer and worker reaction to no-unit-pricing, and 9) more customer

store-switching with no-item-pricing.

The Supreme Court has ruled that an individual's bank records are not his own "private property," but they are

Steve Weinstein, "Electronic Front-End Benefits Stressed But Careful User Appraisal Advised," Supermarket News 25 (March 22, 1976):1 and Joseph S. Coyle, "Update Profit Talk: How Scanning Will Boost Front-End Produc­ tivity and Back Room Output," Progressive Grocer 55 (May 1976):39-41. See also "System Zooms Control in High Volume Store," Supermarket Management, Fall 1975, pp. 26-28. See also Elliott Zwiebach, "Savings Seen Scanner Seller," Supermarket News 24 (April 28, 1975) :1. Also "$500,000 POS Investment Worthwhile, Toy Firm Says," Electronic News 20 (January 13, 1975):21.

•^Richard Weightman, "EFTs Pose Hazards to Consumer: Knauer," Supermarket News 25 (April 26, 1976):2, 29. See also "Industry Group Recommends Item-Price Marking: Some Scanner Users Say They Won’t Go Along," Supermarket News 25 (March 29, 1976):1, 4-5. Hal Tayior, "Moss Peeking Votes For Item Pricing Bill," Supermarket News 25 (June 14, 1976):1, 26. 43

"commercial transactions," and as such they are open to

public and governmental inspection.33

Giant Food, a Washington, D. C. area chain, has made a

study of the savings found from operation of a no-item-

pricing system utilizing UPC and scanning at the cash re­

gister. The percent of savings were found to be: checker

productivity— forty-two percent, elimination of price-

marking— twenty-three percent, quicker routine ordering—

nine percent, elimination of register errors--eight percent,

quicker register balancing— fifteen percent, estimated

savings on register replacement— three percent of the total

savings. The total savings was reported to be the equiva- 34 lent of two percent of sales.

The savings experienced by Giant Food and others in

the industry are felt to be large enough to develop a suf­

ficient return on investment to justify installation and

use of scanning even without the elimination of item

pricing. The pay-out period is longer and the volume need

to make a complete scanning system economically feasible

is higher without the twenty-three percent of the savings

33"No Privacy With Bank Records," Boca Raton (Fla.) News, 4 June 1976, p. 10. 34 "Giant Food Spells Out Its Hard Savings From Scanning," Progressive Grocer 55 (April 1976) :20. 44

from the no-item-pricing, according to Robert Wegman, of

Wegman's Food Markets, Rochester, New York.^

The Universal Product Code, UPC, has been discussed 3 6 widely in the literature. Savir and Laurer published a

detailed description of the code itself and the technical

problems associated with its use.^ A small pamphlet was

issued by Distribution Codes, Inc. which describes the work

of the Ad Hoc committee of the Grocery Manufacturers and

the distribution industry, and the Universal Product Code

and symbol they developed. The purposes of the UPC and the

savings, both hard and soft, were included in the pamphlet 3 8 along with the organization of the Ad Hoc Committee.

Articles have been published telling of special dis­

cussions and workshops on the problems and opportunities of

^"Up Date: Inside Washington," Progressive Grocer 55 (May 1976):40-41. 36 See "Are We Ready for UPC," a Roundtable Discussion, Progressive Grocer 51 (April 1972):23-26. "Six Issues That Are Changing Our Business," Progressive Grocer 52 (March 1973):41-45. See also "Computer Terminals Replace Cash Registers at More Retail Stores," Wall Street Journal, 20 November 1974, p. 1. "Trade Finds More Reasons To Go Slow On Scanning," Progressive Grocer 55 (March 1976):21. 37 D. Savir and G. L. Laurer, "Characteristics and De- codability of the Universal Product Code," IBM Systems Journal 14 (January 1975):16-34.

About the Universal Product Code," (Alexandria, Virginia: Distribution Codes, Inc., 1975), pp. 2-7. See also John L. Strubbe, "The Chairman's Report," an Unpub­ lished Talk delivered at the Uniform Grocery Product Code Council Annual Meeting, Washington, D. C., November 19, 1974. 45 39 electronic checkout systems. At a special EFTS Marketing

Workshop in Key Biscayne, Florida, Richard Sprague advanced

the idea that banks must recognize that there are five

major categories of retail systems requiring different

banking interface systems. Sprague identified the five

different types of retailers for the purposes of EFTS evalu­

ation and participation as: 1 ) large department and

specialty stores, 2) large discounters, 3) large food

stores, 4) other large retailers, and 5) small retailers

of all types. Sprague also made the point that interfacing

with the different types of retail systems would require

flexibility and adaptability of funds transfer systems or

different points of interface between the banking insti­

tution and the retailer. For example— interface at the

regional level was advocated for department stores, but

interface with the supermarkets was called for at the store

level.i 40

The literature has changed emphasis from criteria for

technological discussions to topics relative to adoption

^ S e e "Are We Ready For UPC?" p. 24. See also Alan B. Eirinberg, "Computer Banking Goes to Supermarkets," Advertising Age 46 (May 19, 1975):67-68. And Alan B. Eirinberg, *’Checkless , Electronic Banking Challenges Admen, Marketers," Advertising Age 46 (May 26, 1975):38-39.

^Richard E. Sprague, "The Growth of Retail Point-of- Sale Systems and Their Impact on Electronic Funds Transfer," Unpublished Paper delivered at EFTS Marketing Workshop in Key Biscayne, Florida, January 15, 1974, p. 13. Ibid., pp. 16, 19. 46

and use of EFTS by retailers and problems associated with

the use of scanning and the Universal Product Code. Other

subjects discussed in the literature include customer re­

action to no-item-pricing used by retailers in conjunction

with scanning systems at the checkout counter, union and

worker resistance to UPC, customer groups protesting UPC

and no-item-pricing, and also legislation relevant to use

of Universal Product Codes without individual item . . 41 pricing.

41 See for example II. Douglas Cosby, "Secrecy Vs. Confidentiality," Data Management 12 (September 1974):18-19. See also Robert L. Patrick, "Privacy, People and Credit Services," Datamation 20 (January 1974):48-50. See also Nancy DrumbaclTi "Industry Meeting to Map No-Item-Pricing Strategy," Supermarket News 24 (March 17, 1975):!. And "Customized Scanner System Ordered by Safeway," Supermarket News 24 (April 21, 1975):1G. Also "UPC Scanning A Success At Marsh’s," Progressive Grocer 54 (March 1975):59-63. "Things Look Good for POS in *75," Datamation 21 (April 1975):40. See also "Item Pricing Holds Its Own In Calif­ ornia," Supermarket News 2 4 (May 26, 1975):21. And "EFT News in Perspective,'r Datamation 21 (April 1975) :116. Also "The Latest EFTS Network Is a $35 Million Project," Datamation 21 (July 1975):90-91. Ann Telthorst, "Sales Brisk at Food Giant With Shelf Only Prices," Supermarket News 24 (February 17, 1975) :1. And Ben Cohen, Shoppe rs at Lucky Cool to Shelf Pricing Only," Supermarket News 24 February 17, 1975):1. Also "Maryland Weighs Item Price Measure," Supermarket News 24 (March 17, 1975) :36. Ben Cohen, "Two Price-Mark Bills Killed in California," Super­ market Netvs 24 (March 17, 1975) :36. Ben Cohen, "Lucky Unveils Scanner; Clerks, Shoppers Protest," Supermarket News 24 (February 3, 1975):1. Also Ann Telthorst, "Custo- mers Score Giant on Lack of Item Pricing," Supermarket News 24 (January 27, 1975):1. See also Nancy Brumback and Walter Peck, "Funds Transfer Units Gaining Ground," Supermarket News 24 (May 19, 1975):12. And "Produce Enters the Elec­ tronic Age," Progressive Grocer 54 (March 1975) :64-66. "Computerized Checkout Plan Faces Conflict in Congress," Advertising Age 46 (March 10, 1975):17. 47

The literature cited was in agreement that the tech­ nical capability is here to handle EFTS or nearly "paper­

less" transactions. The equipment has been built and tested and many of the initial problems have been worked out. One big equipment problem seems to be the cost of the system. Later generations of equipment already on the drawing boards and in experimental test programs will soon be available to reduce costs; however, the consumer still holds the key to success in any of the systems. Where they have been tried and failed it has usually been because the 42 consumer did not perceive an advantage. The Atlantic

See Audry Edwards, "Poor Unit Pricing Held Hurting UPC/' Supermarket Hews 25 (April 19, 1976);2, 24. Jack Uessling, "Unions to Kroger: Price All Items," Supermarket News 25 (April 19 , 1976) :2, 14. Nancy Brumback, ,rScanner Progress Picture For Year Has Been Mixed," Supermarket News 25 (April 19, 1976) :4, 18. Frank Soltan^ "Consumers Found Short On UPC Data," Supermarket News 25 (April 5, 1976):1, 14. See also Ann Telthorst, "Senate Unit Asks Chains For Item Pricing Opinions," Supermarket News 25 (April 5, 1976):1, 16. See also Richard Wightman, "Scan System Guides Set for Labor Negotiations," Supermarket News 24 (June 9, 1975):1. And "Automation Clause in New Con­ tract," Supermarket News 24 (May 26, 1975):21.

^*2Cox and Giese, "How It's the Less-Check Society," p. 12. See also D. B. DeLoach and A. D. O ’Rourke, "Use of Dan): Credit Cards in Grocery Stores," (Berkeley, Calif.: University of California, Agricultural Publications, October 1969), p. 10. Kenneth E. Reich, "Whatever Else It Is Electronic Money Is Not a Customer Service," Savings and Loan News 84 (April 1973) :66-67. See also "Electronic Money: The Atlanta Project," Savings and Loan News 83 (August 1972):36-42. "Automated Checkout Feared by Custo­ mers," Boca Raton (Fla.) News, 13 October 1975, p. 5. See also Steve Weinstein, "Electronic Front-End Benefits Stressed," Supermarket News 25 (March 22, 1976) :1, 16. 48

Federal Reserve Bank test in Atlanta, Georgia, was con­

sidered successful by the bankers, retailers, and most

customers. The key to success in this test was reported

to be advantages for the customer which make the system 4 3 attractive to him.

The next section will look at the reasons for the con­

tinued interest in the "paperless" society by banks, re­

tailers and computer equipment makers.

Why the Interest In Computerized Credit By Banks, Retailers and ~c'oinp~uter Manuf acturers

A. Bankers

The principal interest in a paperless money system in

the banking industry springs from the large and increasing cost of handling checks in a labor intensive way. The pre­ sent cost is estimated to be approximately ten billion dollars per year. Extrapolation of the growth trend that has been observed over the last few years has lead to pre­ dictions that the twenty-five billion checks banks in the

United States handled in 1974 will grow to over sixty bil­ lion checks by 1980. Each check was handled eight times

4^See "Electronic Money: The Atlanta Project," p. 38 lists the advantages to the customers. See also Moore, "Atlanta Payments Project," an Unpublished Paper delivered at the PSI Marketing EFTS Conference at Key Biscayne, Fla., January 15, 1974. See also "The Implications of the Atlanta Payment Study: A Dialogue," The Magazine of Bank Admini­ stration 48 (October 1972):16" S c e a l s o "Retailers List Funds Transfer Problems," Supermarket Hews 24 (September 22, 1975):14. 49

in 1974. Factors causing the predicted growth are: 1)

larger population of check-writing age# 2 ) increased number

of checks written per year per individual, and 3) afflu- 44 once.

Banks are also interested in computerized credit and

credit cards because the consumer credit market is growing

rapidly, and they want to serve a larger part of the mar- 45 ket. Ranks held less than fifty percent of the amount of consumer credit outstanding in personal loans and install- 46 ment credit in 1970. Department stores have been re­

luctant to accept bank credit cards, but the banks hope

that with EFTS they will be able to serve the department store credit customer through interfacing with the store 47 credit system.

44 William Gruber, "Floating Check Game Not Amusing to Banks,” Chicago Tribune, 18 June 1975, p. 4. See also "Banks Becoming Largest Users of Computerized Data Service," Commerce Today 2 (September 18, 1972):23. And "Study Shows That NOW Accounts Replace Checking Accounts," Payment Systems Newsletter 8 (March 1976):3.

^ F o r a report on the growth of the consumer credit market see "Presidential Unit Urges More Responsive Credit System for Consumer," Commerce Today 2 (November 27, 1972): 5-G. See also Payment Systems Newsletter 7 (February 1975):1.

^"Consumer Credit in the United States," pp. 12-13. 47 "Credit-Card and Check-Crcdit Plans at Commercial Banks," pp. 646-653. See also Sprague, "Retail Point-of- Sale Systems,” pp. 15-16. 50

Commercial banks, savings and loans and mutual savings

banks are vitally interested in EFTS and the impact of com­

puterized systems of funds transfer because the traditional

relationships that have been maintained for over one hun­ dred years between them are threatened by the advent of

electronic money.

A study by Booz-Allen and Hamilton, Inc. drew six major conclusions about past, present and future EFTS develop­ ments as they relate to banks and savings and loan asso­ ciations. The conclusions are: 1) The EFT revolution is happening and accelerating. 2) There is an interdependence between point-of-sale terminals, unattended teller machines and automated clearing houses. 3) Major advantages can accrue to financial institutions that use the terminal net­ works. 4) A successful system required customer charges to develop a revenue stream capable of defraying expenses.

5) Shared terminal networks will likely contribute to the growing impersonalization of banking; this result must be overcome. 6) The most successful phased entry probably is 4 8 geographically, not step-by-step introduction of services.

48 Sec Booz-Allen and Hamilton, Inc. crTS, A Retail Banking Tool (Lake Success, Hew York: Eastern States Bank Card Association, 1975), p. 19. Gee "A Fight For A Piece of the Cashless Society," Business Week, March 24, 1973, p. 60. See also Thomas R. Bomar, "Federal Home Loan Bank Board Press Release," January 10, 1974. See "Sweeping Bank Reform Bill Passed By Senate," Sun Sentinel (Fort Lauder­ dale, Fla.), 12 December 1975, p^ 1~. "Continenta 1 Illinois Extends EFT Network; FNB Chicago Pilots POS System," Payment Systems Newsletter 7 (March 1976):3. 51

Savings and loans are experimenting with new methods

of bringing their services to the customers, such as the

"transmatic money service," TMS, a computer-based service

which makes traditional pass book withdrawals from a win­

dow located in a supermarket. The First Federal Savings

and Loan Association of Lincoln, Nebraska was offering 49 transmatic money service in 1974. However, in June of

197 4 the Federal Home Loan Bank Board, FIILBB, was sued in

connection with their approval of the TMS of the First 50 Federal Savings and Loan of Lincoln, Nebraska. The courts

and the United States Comptroller of the Currency have ruled

that consumer bank communication terminals, hereafter called

CBCTs are permissible up to a range of fifty miles for a single bank, but all state regulations must be followed.

The final decision, however, will have to come from the

Supreme Court because of conflicting Lower Court rulings.

49 See "Supermarket Banking," St. Petersburg (Fla.) Times, 15 January 1974, p. D 3. See also "Twin City S & L pTans Place-of-Business Funds Transfer Service," Payment Systems Newsletter 5 (April 1974) :5. See Appendix G for a copy of the news release by First Federal Savings and Loan Association of Lincoln, Nebraska, 10 January 1974. See also Linda Flato, "Checking on EFTS," Computer Decisions, May 1975, pp. 22-26.

5°"fhLBB Proposed Funds Transfer Pilots Regulation Brings Various Responses— FHLBB Sues Re. TMS," Payment Systems Newsletter 5 (June 1974):4-5. For a listing of common EFTS acronyms see Appendix G. See "Comptroller Issues Revised CBCT Regulation; FDIC Says They're Not Branches," Payment Systems Newsletter 6 (May 1975):l-2. See also "A New Beginning: Words Become Deeds," United States Investor/Eastern Banker, October 20, 1975. 52

A Chicago Federal Court ruled that "EFT systems are unlawful

functions of commercial banks because they constitute branch

operations.

The Federal Reserve Board of Governors issued an amend­

ment to Regulation "Q" on December 7, 1973 concerning the

payment of interest on deposits in banks and savings and

loan associations. The amendment allowed a change which

permits customers to write "NOW"s 5 2 which function as checks

on interest-bearing savings accounts. Savings and Loans in

Massachusetts, Hew York, California, Virginia and Florida

were experimenting with the "HOW" accounts as of June 1974.

The customary type of check may be written only against non­

interest paying demand deposits. The effect of amending

the regulation has been to allow savings and loan asso- 53 ciations to enter into an area once denied them.

There is hope in the savings and loan industry and

concern in the commercial banking industry that the Federal

Reserve Board will move to further open up competition

51 See "EFT Faces Big Chicago Setback," Progressive Grocer 55 (February 1976):20. 52 NOW means "negotiable order of withdrawal," which allows withdrawal of interest-bearing deposits on demand. For a discussion of several variations of NOW accounts, see Binder, EFTS: Electronic Funds Transfer Systems, Chapter 3.

^See "President Signs Bill Allowing NOWs In All of Hew England," Payment Systems Newsletter 7 (March 1976) :3. See Nancy Brumback, "Cashless Society Heralded by EFT?" Supermarket News 24 (May 19, 1975):1. 53 between the savings and loans and the commercial banks. Two big areas of interest between commercial banks and savings and loans are the power to issue credit cards and the matter of access and control to the central facilities. The United

States Senate has passed and sent to the house a sweeping bank reform legislation act, which if adopted would change many of the long-standing relationships between commercial 54 banks and savings and loan associations. A three-day symposium was held in Atlanta on February 26-2 8 , 197 3 to discuss development of automated clearing house, ACH, for the electronic transfer of funds in the banking system.

Control of the switching network was on everyone's mind as 55 the planned ACII network was discussed.

The development of EFTS is a change from older ways of handling funds. All segments of the financial community are interested in the evolving systems, regulations and relationships because old, established ways of doing busi­ ness are being challenged and changed and because the new way of the future may bring great success and/or problems

54 See "Sweeping Bank Reform Bill Passed By Senate," p. 1. See also "Bank Lobby Cashes In On Grass-Roots Power to Sway Legislators," Wall Street Journal, 30 March 1976, p. 1. See also "Direct Deposit Results, A Set-Back For Associations," Savings and Loan News 87 (April 1976):56-60.

5 5 "The Development of an Electronic Funds Transfer System, A Symposium" (Atlanta, Georgia: COPE, 1973) , pp. 1-4. (Unpublished). See also Binder, EFTS, Chapter 2. 54

to the banking industry and retailers. 56 The next section

discusses some of the reasons retail stores are interested

in the evolving system for handling money.

B. Retailers

The method of checkout used by a retail business is

very important to the success of the operation. The check­

out counter is one place where every customer interacts with

the business. Expenses of doing business in different ways

at the checkout counters differ and affect the profit­

ability of the firm. Security of funds and acceptance of

credit cards and personal checks and check cashing as a

service are related to customer patronage of the firm and 57 the profitability of operations.

Some small retailers have found it to their advantage

to replace their own in-store credit plan with a commercial

credit card plan— usually a bank credit card. Several

reasons have been advanced for the use of bank credit cards

by small retailers, such as: 1 ) less costly, 2 ) no large

tie-up of funds in accounts receivable, 3) less credit

loss through transfer of risk to the banks, and 4) not

56 See Edward J. Malecki and Lawrence A. Brown, "The Adoption of Credit Card Services by Banks: A Case Study of Innovation of Diffusion," Bulletin of Business Research (The Ohio State University) 50 fAugust 1975):1-4.

■^See Arnold Brandemihl, "Automated Bank System For Credit Verification," Credit World, December 1968. See also "Check Cashing by Food chains,” a report by NAFC and AT&T, October 1971, pp. 1-7. 55

extending credit to the poorer risks. However, not all re- 58 tailers find bank credit cards to be advantageous to them.

Large retailers such as department stores and mass mer­ chandisers have been slow to convert to a bank card plan for consumer credit. The feeling of department store manage­ ment has been that extending their own credit provides the store with advantages of promotion, loyalty of customers and better service. Some department stores make money on their charge account or installment selling. 59 The ad­ vantages claimed for computerized checkout systems to retail stores can be listed under several categories which follow:

1. Control of inventory

2. Capture of information:

a. For promotional purposes b. For inventory control c. For competitive needs d. For volume of markdowns

3. Control of bad debt or credit card loss

4. Convenience to the customer, an easier way to pay

C Q See Michael James Etzel, "The Impact of Participation in a Dank Credit Card Plan on the Credit Function and Over­ all Operation of Selected Retail Establishments,'' an Un­ published Dissertation (Denver, Colorado: University of Colorado, 1970). See also Bill Nigue, "Consumer Credit in Food Stores," an Unpublished Paper presented at the Payment Systems Symposium, New York, June 3, 1975. 59 See "Research on Improvements of the Payments Mech­ anism: The Final Report on Phase I, An Analysis of Payments Transactions and Phase II, Payments Flow Data" (Atlanta, Georgia: Georgia Technical Research Institute, 1972), pp. 53-54. See also Con);, "Addition or Erosion," p. 23. 56

5. Promised greater speed at the checkout counter

6 . Reduction of merchandise adjustment costs

7. Reduction of interest costs from more turn­ overs per year of inventory investment

8 . Reduced labor costs:

a* Accounts receivable b. Accounting c. Data processing d. Buying e. Sales

9. Reduced sales training because of simplicity of operation of computerized equipment and sequential lighting of the steps of operation

10. More accurate scheduling of help

11. Better control of cash in each register; each employee can balance the register drawer quickly

12. More information on sales productivity of employees or departments as an aid to management

13. Reduced bad check loss® 0

Many articles found in the literature have promoted

use of computerized checkout systems, electronic cash

registers, and POS systems for many advantages as listed

above; yet cost justification for the system has often

(\Ci The above list came from several sources. See "Retailers Go Electronic," pp. 38-39. And "The Data Ex­ plosion," pp. E 29-34. Also "Master Charge Card Use in Retail Food Outlets," an Unpublished Survey by Hershe- Rotman and Druck, Inc., New York, March 1974. See also "Computerized Checkouts Will Help Consumers Too," Deseret News (Salt Lake City, Utah), 3 May 1975, p. A-26. 57

been restricted to just one area: "primary credit verifi­

cation. "

Cost justification has been made on the basis of

current operations and with current operational techniques;

other savings from the POS system in a retail store, for

example a supermarket, will likely eclipse the savings

that are now being used to justify the decision to go into

automatic checkout systems. The items listed above were

for the most part "theoretical" in 1972, and pragmatic

executives were not using the unproved claims for cost

justification but rather, were using savings that could be

achieved and measured in their existing system. Data

gathered at Giant Food in 1975-76 has not been available

long enough to be assimilated by the food industry. Much

of the theoretical savings were realized from the hands-on g 2 experience at Giant Foods. Other savings were also found.

However, a key consideration as to whether to adopt a com­

puterized checkout system in retail stores, and particularly

supermarkets, is consumer acceptance and use of the POS

systems and EFTS.®^

^"Experts See Big Chains Using POS," Chain Store Age, February 1972, p. 31. See also "ECR System Zooms Controls in High Volume Store," pp. 26-28. 62 See "Giant Food Spells Out Its Hard Savings From Scanning," p. 20*

6^See Margo Harakas, "Grocery Price Coding Needs Con­ sumer Okay," Sun Sentinel (Fort Lauderdale, Fla.), 1 July 1975, p. 4-B, for an interview of Jim Gorman, President of the Florida Retail Association. 58

The third segment of industry interested in the success

or failure of computerized credit is the computer industry.

The principal reasons for computer manufacturers to be

interested in retail credit systems are explored in the

following section.

C, Computer Manufacturers

Computer manufacturers are interested in developing

hardware that is usable in retail stores and banks as one more application of computers in the business world. Addi­

tional sales of existing equipment as well as opportunities

for new models are great and have been welcomed by the com­ puter industry.

Predictions of EFTS and a paperless money system as the wave of the future made by bankers has also been wel­ comed by computer makers. Which computer system is adopted as the standard system in a national EFTS is a vital factor in the sales volume of all manufacturers of computers and electronic cash registers. Dale L. Reistad, President,

Payment Systems, Incorporated, New York, has been respon­ sible for many conferences and workshops in the area of

EFTS. His program includes equipment manufacturers and presentations from the leading equipment suppliers because he sees the technical equipment as a vital part in the deve­ lopment of the final system of funds transfer that will evolve. Manufacturers have been eager to participate, and 59

the equipment presented has been received with interest by 64 retailers and bankers alike, according to Mr. Reistad.

The reported move to shut IBM out of the Canadian data network highlighted the competitive nature of the evolving

international data and funds transfer network.

Hon-food retailing industries have been quicker to adopt POS systems and computerized checkout systems than the grocery industry. Sales in 197 3 of POS systems were 307.5 million dollars to non-food retailers. A fifty percent growth is predicted in the next decade to about 457.5 million dollars. Sales of POS systems to supermarkets in

1973 were 103.9 million dollars and were expected to rise to 215.2 million dollars in 1977. The total size of the market for electronic front-end equipment for the retail stores in America was estimated to be 600 million dollars per year in 1974. Electronic cash registers and computer­ ized systems were included in the 600 million dollar esti­ mate, and a slow penetration was expected.

A 197 5 estimate of the total bank-owned EFT network was reported by the Comptroller of the Currency, Russell

Brown, to consist of 10,000 to 12,000 terminals. He said

^ S e e for example Dale L. Reistad, "Marketing EFTS Conference, The Point-of-Sale Environment," a Paper pre­ sented at the Sonest Beach Hotel, Key Biscayne, Florida, January 14-15, 1974, (Mimeographed).

6 ^"Canada: A Move to Shut IBM Out of Data Network," Business Week, February 9, 1974, p. 42. 60

retailers have 400,000 electronic cash registers in use now,

December 1975, and ECRs are expected to grow to 2,500,000

in the next five ye a r s . ^

The size of the market for POS systems is a major

reason for the interest of the computer manufacturers in

developments in the equipment side of EFTS, credit cards

or POS systems, or whatever name is used to describe it.

A number of large manufacturers such as General Elec­

tric, Singer, RCA, Motorola, and Pitney-Bowes Alpex have

pulled out of the competitive battle for the automated

C "7 front-end in retail stores.

The Singer Company claimed to be "number one" in

installations. They were supplying Sears Roebuck and J. C.

Penney as well as the Singer Sewing Centers with a checkout

system singer called MDTS, Large orders from Sears and

Penney provided a major part of the 115,000 MDTS systems

installed. Singer, however, lost $60 million in the data

processing division during the last five years, and the new manager, Joseph B. Flavin, announced December 29, 1975 the 6 8 proposed sale of the data processing division.

66"Retailers and Bankers Talk to Each Other," Data­ mation, January 1976, pp. 110-118.

®^GE Chairman Rays It Wasn't IBM Moves That Drove GE Out of Computer Business," Wall Street Journal, 10 December 1975, p. 6 .

68,,Singer Pull-Out a Bit of Deja Vu," Datamation, February 1976, pp. 108-109. See also Patricia Hough, "How the Directors Kept Singer Stitched Together," Fortune, December 1975, p. 100. 61

NCR was slow to develop a viable system, but they are

now competing with new hardware and an effective sales organization. IBM joined the market only in August of 1973 with a general merchandise system and a supermarket system G9 in October 197 3. There are still over a dozen major companies competing for the POS hardware business.

The size of the market and the intense competition com­ bined with the very rapid pace of new product development are three factors which account for much of the interest shown by so many computer manufacturers. However, high risks, gigantic costs, and poor sales have been the causes of several major write-offs by major systems producers.

Rapid change, growth, technological development, and intense competition are predicted by the literature for the future of the POS systems market. Every quarter in each 70 year since 1972 has brought new entries into the market.

However, technology and equipment development are only part of the total effort necessary to be a success in the new credit market which has been called by various names such as POS systems, EFTS, paperless money, credit cards, and

6^"Proof Positive,” pp. 3-5. 70 For a review of available equipment see "Report FTS: Unattended Teller Machines; System Design and Equipment Selection." (Chicago: United States League of Asso­ ciations, 1974). See also P. V. McEnroe, H. T. Huth, E. A. Moore, and w. W. Morris, III, "Overview of the Supermarket System and the Retail Store System," IBM System Journal 14 (New York, 1975):3-15. 62

computerized or electronic check stands. The next section of the study will discuss several studies on credit cards and life-style.

Credit Cards, Consumer Life-Style and Attitudes

A. Growth and Development of Consumer Credit

The laws of Colonial America were English in origin and prohibited the granting of consumer credit for interest.

State laws in the early years of the United States were modeled after the English code and prevented legal granting of credit for interest. There was a need for consumer credit and, therefore, enterprising individuals and busi­ nesses devised ways of circumventing the law and sales on credit were common although illegal. The rates of interest were high and variable from city to city and from one trans­ action to another.^

The volume of consumer credit was small under the above conditions but increased as legitimacy was granted the prac­ tice of offering credit.

Nystrom reports that "Installment selling was practiced through the entire nineteenth century. Copperthwaite, a

New York furniture dealer, established in 1807, had used installment selling since the beginning. Starting in the

1850's sewing machines were introduced and widely sold on partial payments, and this method has continued ever since.

71 Consumer Credit in the United States, p. 5. 63

Sets of expensive books and encyclopedias were likewise

regularly sold throughout the nineteenth century on the

installment basis."72

Interest or carrying charges were not always identified

as such by the selling merchant. Nystrom says: "In such

installment selling as was carried on before 1921, it seems

to have been customary for the dealer to attempt to secure

a gross profit margin considerably higher than that of the average retail store in order to insure against the in­ creased expenses of accounting and the hazards of loss from 73 handling bad accounts." J

Estimates of the amount of consumer credit outstanding show the growth in credit practice and the increasing ac­ ceptance of credit by consumers in the United States.

E. R. A. Seligman estimated that for the year 1926 retail sales on the installment plan amounted to about 4.5 billion 74 dollars. The items included by Seligman in the estimate were: automobiles, washing machines and appliances, vacuum cleaners, phonographs, furniture, pianos, jewelry, clothing and radios. Beckman reported total retail credit out­ standing at 3.15 billion dollars of installment credit,

^ P a u l h . Nystrom, Economics of Retailing, 2 vols., rev. ed. (New York: The Ronald Press, 1930) , 2:599.

7 3 Ibid, p. 610. 74 E. R. A. Seligman, Installment Selling 1, Chapter 3. See especially pp. 99-101. 64

plus 2.51 billion dollars non-installment credit in 1947,

for a total figure of 5.66 billion dollars. The total outstanding consumer credit in 1960, according to Beckman, 7 ^ was 15.06 billion dollars. Consumer credit outstanding continued to grow until it amounted to a total of 190.1 76 billion dollars in 1974.

Historical data on credit has been compiled by the federal government and has been published in the Survey of

Current Business and supplements to the Survey of Current

Business.Q • 77

The distinction between installment credit and non- installment credit was provided by the National Commission of Consumer Finance. Installment credit includes four areas of credit: automobile credit, repair and modernization loans, other consumer goods paper, and personal loans. The distinguishing characteristic is payment of the loan over

7 5 Beckman, Credit and Collections, p. 51. See Appendix One for a chart from Beckman showing growth of consumer credit from 1947-60. 7 6 Dunkelberg, EFTS and Consumer Credit, p. 3.

77,1 Public and Private Debt in the United States, 1916- 42." Survey of Current Business (Washington, D. C.: United States Government Printing Office, 1947), pp. 22-25. See also "Consumer Credit in the United States," Business Statistics (Washington, D. C . : U. S. Government Printing Office, 195 5), pp. 233-234. Also "Short and Intermediate- Term Consumer Credit, 1916-52," Survey of Current Business, September 1953, p. 14. See also Historical Statistics of the United States, a Statistical Abstract (Washington", D. C . : Department of Commerce, Bureau of the Census, 1961), p. 664. See also Appendix L, Table 60 for the summarization of outstanding credit in the United States from 1916 to 1952. 65

time with two or more installments being made. Classes of non-installment credit include: "single-payment loans, non-revolving charge accounts, and service credit. Most

single payment loans are extended by commercial banks. The charge account segment includes primarily the traditional thirty-day charge accounts of retailers, as well as amounts owed on bank credit cards, gasoline credit cards, home heating-oil, and other credit card accounts. The most im­ portant component of service credit is debt to doctors and hospitals."

Bank credit cards had outstanding credit in the amount of nine billion dollars and over nineteen billion dollars volume during 19 75. Both outstanding amounts and total volume of credit done on bank credit cards is growing faster than the average of all kinds of non-installment credit 79 and/or installment credit.

User characteristics as reported in several studies are discussed in the following section.

Demographics and Life-Style of the Users of Credit and Credit Cards

Mandell reported that "half of all American families

7 8 Consumer Credit in the United States, p. 8. 79 Payment Systems Newsletter 8 (March 1976):1. See also Al Criffin, The Credit Jungle (Chicago: Henry Regnery Company, 1971) , pp. 20-42 for an antagonistic discussion of the introduction and growth of bank credit cards. 66

use at least one credit card." 30 Other facts from the

study conducted by the Survey Research Center at the Uni­ versity of Michiqan during 1970 and 1971 report character­

istics of credit card users. It was reported that "The primary determinants of credit card use were the income and education of the family as well as the family life-cycle stage and the size and location of the community in which

the family lives. Income was the major determinant of credit card use....and was highly correlated with education of the family head, because income was correlated with edu­ cation. " 81

Families with higher incomes used credit cards more than families with lower incomes. Younger families used credit cards more than older families. Families with better educated head of household used credit cards more than families where the head of the family did not have as much formal education. These findings were reported from a study of credit card buying conducted by Time Magazine.

80rtandell, Credit Card Use in the United States, p. 2.

8 1 Ibid. , p. 6 . 67

"The more active bank card holders are both men and women

and are concentrated among the young, better-educated and 82 upper-income respondents.”

A study by Blackwell, Hawes and Talarzyk found that

women were slightly less liberal in using credit cards than

men, that both men and women had favorable attitudes toward

credit as a proper tool in financial planning and the pur­

chase of utilitarian goods, and that most use of credit by

consumers was both thoughtful and mature. Use of credit

cards was found to be "strikingly similar" by both males

and females, according to the Blackwell study.

The three studies cited above were of credit cards, but

the demographic information has been found to be much the

same for installment credit and non-installment credit as

reported by the National Commission on Consumer Finance.

"The profile that emerges is that the consumer who is most

likely to employ installment credit to acquire goods and services is young, married, with children at home, and has a family income between $7,500 and $15,000. The stage in

New Way of Buying (New York: Time, Inc., 1972), No. 269, p. 7. See Gary F. Fairchild and Thomas L. Sporleder, "Consumer Credit in the Retail Food Industry: Attitudinal Analysis and Market Segmentation," Technical Report 71-7 (College Station, Texas: Department of Agri­ cultural Economics and Rural Sociology, Texas A 6 M University, 1971), p. 81. See Roger D. Blackwell, Douglas K. Hawes, and W. Wayne Talarzyk, "Americans' Use of Credit Cards," Bulletin of Business Research 50 (Columbus, Ohio: The Ohio State University, February 1975) :5 — 7. 68 the life-cycle of the family appears to be most influential in determining frequency of use, while the level of income probably has a greater influence on the quantity of debt 8 3 and the quality of the goods and services acquired."

A study by John W. Slocum, Jr. and H. Lee Mathews also reported that income was the most useful variable for under- 84 standing buyer behavior in using credit cards.

A different approach was taken by Plummer in a study in 1968 of 2200 heads of house. Plummer assessed life­ style patterns in his study. He reported:

Card usage is considerably greater among people with higher incomes and better education. The life-style portrait of the users indicates an active, upper socio-economic, urban-suburban life­ style with many interests outside the home. Both the male and female user indicate a convenience-orientation toward credit cards as a satisfactory cash sub­ stitute...... and a conservative orientation toward one's life-style may be a major barrier to usage of bank cards which marketing and communications should seriously consider. ”

Greater use of credit cards was found among the middle- class respondent than either the lower-class or upper-class users; however, greater use of the loan feature was made by

^ Consumer Credit in the United States, p. 12. 84 John W. Slocum, Jr. and H. Lee Mathews, "Social Class and Income as Indicators of Consumer Credit Behavior," Journal of Marketing 34 (April 1970):69-73. 8 5 Joseph T. Plummer, "Life-Style Patterns and Commer­ cial Bank Credit Card Usage," Journal of Marketing 35 (April 1971):37. 69

the lower and middle-class card holder, and greater use of

cards for convenience was reported for the upper-class

users. More than one-half of credit card users used the 8 6 credit feature of the card.

Changing Consumer Attitudes Toward Credit and Credit Cards

The literature on attitude theory is not in agreement

as to how attitude change comes about. However, it is felt

that a change in behavior will often lead to a change in 87 attitude. If a change in attitude does come from change

in behavior, then the increased use of credit and credit

cards in the United States in the last ten years has sig­

naled a change in attitudes that is now a part of the con­

sumer makeup or will soon become a part of the typical

shopper's attitudes.

Growth in the use of consumer credit has been steady

and increasingly more rapid over the past generation. The

growth of consumer credit to the point where the outstanding

amount in 1974 of 190.1 billion dollars is empirical evi­

dence that there has been a change in willingness to use

credit by the consumers of the United States. The

8 6 Mandell, Credit Card Use in the United States, p. 8 , and Plummer, "Life Style Patterns," p. 41, and Fairchild and Sporleder, "Consumer Credit in the Retail Food In­ dustry," pp. 83-87. 87 Janes F. Engel, David T, Kollat, and Roger D. Black- well, Consumer Behavior, 2nd ed. (New York: Holt, Rinehart and Winston"^ 1973) , p. 191. 70

increasing willingness to use credit has been reported by 88 many of the studies cited previously.

Mandell reported, however, that "Few Americans tend to

think of credit cards as a good thing whether they use them or not. Fully seventy-five percent of all respondents said that credit cards made it too easy to buy things that they may not really want or that they can't really afford....it seems that credit card users view their cards more as debt instruments than as mechanisms for facilitating trans- 89 actions." Fairchild and Sporleder ventured the estimate that if credit cards were adopted by food stores, twenty 90 percent of food sales would be made on charge cards.

Mathews and Slocum reported the following views of the respondents to their study: Sixty-nine percent of card holders use the financing feature of the card; card use was related to social class, with higher classes using the card mostly for convenience, while the lower classes used the cards mostly for installment purchasing. There was a tendency for card holders to shop with stores that accept

88 See "Presidential Unit Urges More Responsive Credit System for Consumer," p. 4. See also Plummer, "Life-Style Patterns," p. 35. Also Fairchild and Sporleder, "Consumer Credit in Retail Food Industry," pp. 85-86. See also Blackwell, Hawes, and Talarzyk, "Americans' Use of Credit Cards," p. 7. 8 9 Mandell, Credit Card Use in the United States, p. 7. 90 Fairchild and Sporleder, "Consumer Credit in the Retail Food Industry," p. 8 6 . 71

credit cards. The majority of card holders felt it was

acceptable to purchase durable goods, necessities and

services, but not luxury goods on the card. Both con­

venience and installment credit card users were mostly

favorable toward the use of credit. Their final conclusion

was divergent from Mandell in that Mathews and Slocum

reported that attitudes toward credit and actual use of

credit are congruent.9*

A different view was presented by the National Com­

mission on Consumer Finance. The reasons for the rapid

growth in consumer credit were said to have been a natural

extension of the growth of other forms of debt, the rising

discretionary income, the urbanization of the population,

and the influx of younger consumers into the market. Also

the trend to home ownership and the accompanying shift to

owned durable goods was included. The committee further

reported that "In spite of the increase in outstanding con­

sumer credit, analysis of aggregate data does not indicate

a dangerous situation of over-indebtedness. Consumers seem 9 2 to be learning how to use debt and are doing well with it.

91 II. Lee Mathews and John W. Slocum, Jr. , Marketing Strategies in the Commercial Bank Credit Card Field (Chicago, 111.: Bank Public Relations and Marketing Asso­ ciation, 1968), pp. 58-60. 9 2 Consumer Credit in the United States, p. 21. Also Orville C. Walker, Jr. and Richard F. Sautcr, "Consumer Preferences for Alternative Retail Credit Terms; A Con­ cept Test of the Effects of Consumer Legislation," Journal of Marketing Research 11 (February 1974):76-78. 72

Consumer attitudes seem to be changing towards use of

credit and credit cards with younger users and higher-income

users leading the way. The next section of the study re­

ports the future of EFTS as reported in the literature.

Steps to An EFTS Economy

A study made in 19 59-60 by Townsend-Zillner predicted

that there would be no great rush for food stores to adopt

credit cards and that the plan would simmer along and not

grow beyond the initial stage of adoption. Other findings

from Townsend-Zillner*s study were: 1) The plan did not

reduce the financing cost of a private charge plan; 2 ) the

checkout process was unduly delayed; 3) customers buying

on credit did not change their shopping patterns and shop

more evenly throughout the week; 4) most of the credit

business was new business to the supermarket participating 93 in the experiment.

Events in subsequent years have followed the above

prediction. There has not been a great rush to food store

charge plans; there also has not been a great rush to the

checkless-cashless society that was predicted by some of

the writers of the same and later periods. However, the

time is much closer when electronic transfer of funds will be a reality, if the current authors can be believed.

93 Norman Townsend-Zillner, "The Bank Charge Account Plan and Retail F o o d Marketing," Agricultural Economics Research, October 1960, pp. 102-103. 73

For example: the Federal Reserve Board is committed to

''accommodate visible evolution in the payments mechanism by

continuously improving and updating its facilities to handle

a growing volume of funds transfers along the channels of

likely development...... The electronic funds transfer sy­

stem is expected to evolve in a modular fashion through the

development and interlinkage of a comprehensive series of 94 computer-directed communications networks."

As a part of the effort to provide service to the

banks, the Atlanta Federal Reserve Bank was a part of the

"Research on Improvements of Payments Mechanism" project 95 conducted in Atlanta, Georgia from June 1969 to June 1971.

Moore reported to the EFTS Conference at Key Biscayne,

Florida, the preliminary findings from the study, which

included the following:

A. The Atlanta Committee on Paperless Entries,

hereafter called COPE, was formed in 1971, for

the expressed purpose of studying the potential

of tying together terminal communications lines

and bank computer systems into a network for

electronic transfer of funds from retail points-

of-sale and customers.

94,1 Evolution of the Payments Mechanism," p. 10 09. 95 "Research on Improvements of the Payments Mechanism," pp. Ill and IV. 74

B. A central switching facility was found to be

necessary. The banks would have developed this

facility themselves if necessary, but they had

requested the Federal Reserve Bank in Atlanta

to provide such facilities. The Federal Reserve

bank took this request under advisement to study

the ramifications of such facilities. The Federal

Reserve System also requested input from interested

parties on changes in regulation "J" that would

re-define "the appropriate roles of the Federal

Reserve in the nation’s payment mechanism.

Responses to the request for changes in regulation

".J" were divided into five positions, all the

way from complete Federal Reserve Board control

of point-of-sale to non-involvement of the 97 Federal Reserve System. Moore also reported

the following merchant views:

96 Moore, "Report From the Atlantic Payments Project," p. 3. Note: Payment Systems Newsletter, June 1976, p. 1 reported that the Federal Reserve had made a decision not to fund nor operate the switching center for the experi­ mental point-of-sale system in Atlanta.

Q 7 Robert C. Zimmer, "Responses to Fed. Categorized," Payment Systems Newsletter, June 1974, p. 2. Note: the Tive categories of response listed by Zimmer are: "1. Pro- competitive system with little or no involvement of the Fed. 2. Pro-competitive with a national automated clearing house association or a Federal interconnect system between the ACH's. 3. Anti-competitive with Federal ownership or control up to the switching and processing center. 4. Anti-comnetitive all the way with the Fed. involved in going all the way to the point-of-sale terminal. 5. Delayed de­ cision pending further study." 75

1* A favorable attitude towards POS systems, with reservations because of needed im­ provements in the procedures for credit card processing....Merchants felt such improvements would come. Check verifi­ cations service was one of the best features of the plan.

2. Attitudes of the merchants toward cash card services were generally favorable with some concern about technology, costs and consumer acceptance. Atlanta area merchants preferred cash card transactions over either verified or unverified checks.

3. Merchants were willing to pay to reduce bad check write-offs and collection costs up to about 5-10C per transaction.98

Consumer reactions and attitudes were reported by Moore as generally favorable to the electronic funds transfer idea but few saw any significant advantage over traditional means of payment. The advantages that were recognized by the cus­ tomers were convenience, security, and speed. The principal disadvantages were the necessary changes in spending and bookkeeping habits and a feeling that the electronic system would cost then something.

Given the general apathy of most consumers toward point-of-sale EFT, as indicated by both the Atlanta research and other similar studies, it seems to me that it will be difficult to develop a marketing program which can produce a groundswell of consumer demand for POS services...... between 70 and 80 percent of personal checking accounts

9 8 Moore, "Report From the Atlanta Payments Project," pp. 6-8. A cash card would permit the merchant to elec­ tronically have funds transferred directly from the cus­ tomer's account to the merchant's account. The cards access the customer’s checking account, and in New England the "NOW" account plan allows a debit card to access the customer’s savings account. 76

"float" at least one check during a year. It is no small wonder then that consumers fear the possibility of a POS system which can discover their attempted floating and embarrass them in the p r o c e s s . ^ 9

Moore also felt that the marketing effort and commit­

ment by bankers would have to be as great in dollars as the

cost of the technical equipment or the program would not be

widely accepted and attain the large volume of use needed

to make it profitable.

The general feeling of many authorities was expressed

by Richardson: "Because a future electronic funds transfer

system will evolve rather than emerge suddenly as a major

innovation in the payment process, the operation of such a

system could be undertaken in a variety of forms by any number of types of institutions."100 The cost of a nation­ wide EFTS would be massive and would require close co­ operation between the banking industry, the retailers and computer and equipment manufacturers. The Federal Reserve

System is already involved and is committed to a central role in whatever funds transfer system develops.

Consumers have not shown any great interest in EFTS to date, but the interpretation of most researchers is that this is not bad; rather, the consumer is expected to go along with the new system as it develops if an adequate

^°Ibid., pp. 9-11. 100 Dennis W. Richardson, Electronic Money: Evolution of an Electronic Funds Transfer System (Cambridge, Mass.: The MIT Press, Y 9 7 0 ) , p. 1^7. 77

marketing effort is made to introduce, explain and promote

it to the consumer. Also it is felt that customer advant­

ages must outweigh the disadvantages or the system will not

achieve large-scale acceptance by consumers. Experience

by COPE in Atlanta and a group in California called SCOPE,

Special Committee on Paperless Entries, verify the above

recommendations.101

Reports from the market place indicate that customer

acceptance and use of credit cards is increasing but still

slow, although the oil companies have slowed promotion of

credit cards, and a service charge is being contemplated 102 by some banks for their charge cards.

See Leonard W. Huck, "Making the Card the Customer," Banking 68 (May 1976) :3-7, 81-83. And "California's Step Toward Checkless Banking," Business Week, September 9, 1972, p. 56. ini See Eugene Dimaria, "See Full Canada UPC Use 5-10 Years Off," Supermarket News 25 (May 17, 1976):2, 12. See "Under 30's Lead Most of Credit Cards in Survey," Super­ market News 20 (October 25, 1971):26. "Shell Upsets A Credit Tradition," Business Week, June 17, 1972, p. 28. "Pros-and-Cons of Buying-"an Credit," The Evening Bulletin (Columbus, Ohio), 11 October 1972. "Dialogue: Implica- tions of the Atlanta Payment Study," Bank Administration 48 (October 1972):16-22. "The Bank Credit "Card~With a $10 Annual Fee," Business Week, March 3, 1973, p. 23. And "A Fight For A Piece""o"£""the'Cashless Society," p. 60. "Credit Purchases Now 60% of Big Store Sales, NRMA Told," Mer­ chandising Week 105 (September 17, 1973):1. And "Bank Cards Make a Minor Dent in Majors Financing," Merchandising Week 105 (February 19, 1973):1. See also "Credit Sales Stage Comeback with Mouse Charge Upswing Clientele," Journal of Retailing 50 (Winter 1973-74) :23-26. Also "Central States Health and Live Selling Via Credit Cards," Nation's Business 60 (October 1972):23- "Chase Manhattan Will Open Tellerless Branch," Payment Systems Newsletter 4 (December 1973):12, 78

Most of the research reported above was done on the

general subject of consumer credit and then extrapolated

to the computerized credit card situation, or the research

was done on credit cards but not on computerized terminals.

This study fills the need for empirical research evidence

as to what consumers will do when faced with the opportunity

to use computer terminals in conjunction with credit cards

in a supermarket and retail stores.

Summary

Current literature has been presented and analyzed along historical lines of consumer credit development and growth in the United States. The historical setting was used to provide a basis from which to study recent events in consumer credit and the technology used to expand credit at the checkout counters of retail stores.

Extensive coverage has been made of the literature of the electronic funds transfer mechanism, point-of-sale systems, UPC, and the centralized switching necessary to

See "Conference of State Bank Supervisors Warns of Fed Involvement in EFTS," Payment Systems News letter 3 (April 1972):3. "FNCB Gives Customers Direct Access to Checking Account Data," Payment Systems Newsletter 5 (April 1974) :3. "New Way To Save Money— Pay Cash," U. S . News & World Report 79 (June 3, 1974) :36. David P. Johnson, "Bill-Paying By Computer Flops After Trial Run," The National Observer, February 16, 1974, pp. 6-7. "Most Oil Companies Halt Credit-Card Promoting," Miami (Fla.) Herald 24 February 1974. And "Credit Card Fail's to Hike Volume, Ralphs Drops It," Supermarket News 24 (September 29, 1975):22. 79

make the related parts into a coordinated electronic funds

transfer system. Technology is said to be ready and able

to accomplish the EFTS and the resulting changes in the pay­

ments mechanism in the United states.

A review was made of the reasons for the interest in

computerized credit by banks. It was found that banks want

to capture a larger share of the consumer credit market and

feel this can be done by using credit cards and EFTS. Elec­

tronic money and its regulation is beginning to change

traditional relationships in the banking industry; there­

fore, interest and concern are present in the industry.

Retailers were found to be interested in POS systems

for a number of reasons, most important of which is control of inventory, control of costs, and possible expansion of business. The retail store market for computer hardware and software was over 700 million dollars per year in 1975 and growing. Computer manufacturers are interested both because of the size of the market and the very real possi­ bility that adoption of a standard system by a few in­ dustries may freeze out other manufacturers.

Finally, consumers exhibited little interest in EFTS, or computerized checkout. Several studies were cited which drew conclusions from research: that the consumer would support an automated checkout system if there were suf­ ficient advantages to the customer and if the costs were not higher than the present method. Also it was reported 80 that success in computerized credit, credit cards, and EFTS will come only if large amounts of money are spent marketing the program to the consumers.

The research methodology is presented in the next chapter, followed by a presentation of the findings from the research data in Chapter Four. CHAPTER III

RESEARCH DESIGN

Introduction

The City National Bank of Columbus, Ohio, in co­

operation with BankAmericard, Inc. organized twenty-eight

retail merchants into a test of consumer reaction to Bank­

Americard purchases recorded on in-store computer consoles.

This test was situated in Upper Arlington, Ohio, an upper-

income suburb of Columbus, Ohio during 1971-72.

Consumer use of the automated terminals in Upper

Arlington, Ohio in conjunction with credit cards was the marketing phenomenom studied in this dissertation. This chapter contains a complete description of the research design and data gathering procedures used in collection of the data base.

The City National Bank Test

The opportunity for the study was presented by a test conducted by City National Bank of Columbus, Ohio and Bank-

/onericard, inc. during the nine months from October 19 71 to

June 1972. The test was an attempt to measure customer acceptance and use of BankAmericard when there was a large number of stores in a localized area accepting credit cards.

81 82

The test included twenty-eight stores that accepted Bank­

Americard in three shopping centers in Upper Arlington,

Ohio.^ One of these stores was a supermarket.

All customers of City National Bank who lived in the

Upper Arlington suburb of Columbus, Ohio were sent special

BankAmericards with a magnetic strip on the back of the card. They were sent the special card and information on the test whether or not they were already holders of regular

BankAmericards. Families who were not customers of City

National Bank had to make application for the special credit card to participate in the test.

Residents of Upper Arlington who were not customers of City National Bank were contacted through special teas held in the homes of several women living in Upper Arlington.

The hostess invited to her home a number of friends, and a representative of City National Bank was there to explain the test and to encourage the women to participate in it.

The bank benefited by obtaining new customers and by re­ ceiving the opportunity to explain the test to those who would probably participate in it.

A series of ads were run in the local newspaper, The

Upper Arlington News, to acquaint the residents of the com­ munity with the test and to promote the special striped

*For a listing of all the stores participating in the test see Table Number Forty-seven, Appendix G. 83 2 BankAmericard and participation in the test. The theme

carried by the advertising was: City National Bank is con­

ducting a test of a new way to use BankAmericard, and new

equipment to facilitate the test has been placed in speci­

fied stores. Residents of Upper Arlington were urged to participate in the test.

The mechanics of the test as actually conducted by City

National Bank and BankAmericard were as follows: credit

cards were issued to residents living in the Upper Arlington

area as described heretofore. Previous to the promotion of credit cards to consumers, an effort was made to sign up the merchants in the three shopping centers that served the area. The three centers were the Fremont Shopping Center, the Kingsdale Shopping Center and the Henderson-Reed Shop­ ping Center.

The starting date of the test was October 10, 1971, by which time all of the merchants who agreed to participate had installed in their stores a remote computer terminal to use with the special BankAmericard that was issued for the test. The checker in the store with a computer ter­ minal, upon being handed a BankAmericard, dialed the special phone number, placed the credit card in the terminal, and drew a bar across it. When the bar returned, the special magnetic code was "read" by the card reader, and a check of

For a complete listing of the dates and some samples of the ads run in The Upper Arlington News, see Appendix j . 84

the card was made by the computer. All cards were checked

to determine if they were stolen, if the customer had suf­

ficient credit balance remaining in his credit card line of

credit to cover the purchase, and an "automatic O.K." was

given if the account was in acceptable condition. In

effect, the credit floor for approval of a sale was zero.

Every BankAmericard transaction was checked by the computer

before it was completed, and an "O.K." given to the checker

to accept the credit sale. The customary sales slip for a

BankAmericard sale was completed for each transaction, and

the customer was given a copy of the charge slip.

All of the charge sales slips were totaled together

each night by the retailor and were deposited at the bank,

just like customers' checks were deposited. The Bank­

Americard charge tickets, less an agreed-upon percentage

discount, were then credited to the account of the merchant

each day so that no delay was experienced in receiving

credit for the sale. City National Bank then assumed re­

sponsibility for collection of the amount owed by the

customer in the regular pattern of BankAmericard. Customers

were billed for their purchases at the end of the month,

and no service chqrge was assessed against the customer if

the bill was paid within twenty-five days after the end of

the month.

The original six-month test was extended by three months by the bank and BankAmericard, so that the ending 85

date for the test was June 30, 1972. A national research

firm was employed by the City National Bank and Bank­

Americard to monitor the te3t and to report the results.

The Ohio State University did not have a part in the study

conducted for City National Bank and was not given access

to the results.

A separate panel study was conducted during the period

of the Upper Arlington test and was the basis upon which

this report was made. Description of the methodology em­

ployed in The Ohio State study is found in the following

section.

Basic Design of the Research

The basic design of this research was a longitudinal

panel study covering the nine months, during which the

test of remote computer terminals in three shopping centers

in Upper Arlington, Ohio was conducted by City National

Bank.

The test group panel was selected from among the re­

sidents living in the trading area of the Henderson-Reed

Shopping Center located at the intersection of Reed and 3 Henderson Roads in Columbus, Ohio. riost of the stores in

the shopping center had agreed to participate in the study,

and computer terminals were installed in them. Terminals

3 See Figure One, Appendix E for a map locating the study areas in the suburbs of Columbus, Ohio. 86

were installed in one major supermarket and were used by

store personnel during the test period. The panel members

for the study were not selected exclusively from customers

of the shopping center but were representative of all resi­

dents living in the study area.

An extensive tour of the trading area of the Ilenderson-

Reed Shopping Center was made to identify the streets and

the size of the area to include in the study.

A control group was also selected from the trading

area of a similar shopping center in the Columbus suburb of

Worthington, Ohio. Identical selection techniques were

used to select both test and control panel groups as ex­

plained in the sample selection procedure.

Several shopping trips in the test area were made

during the duration of the study in order to be completely

familiar with use of the terminals. BankAmericard was

used to charge purchases at several of the cooperating re­

tailers. The BankAmericard used was not one of the specially issued, magnetic strip cards but was readily accepted whenever presented. At the conclusion of the test period all of the operators of the retail stores which had used the EFT terminals were interviewed in depth by two graduate students. The merchant questionnaires were filled out as part of the interview. 87

Sample Selection Procedure

The City National Bank test included only one super­

market; therefore, geographically, the selection of a panel

of shoppers was pre-determined by the location of the super­

market accepting BankAmericard. A panel was selected from

all residents within a three-quarter mile radius of the 4 supermarket participating in the test. The participants

on the panel were selected in the following way; 5 The Haines* Criss-Cross Directory was consulted for

a listing of all households within the specified three-

quarter mile radius of the test store.

Every fifth household in the three-quarter mile radius

was selected as a possible participant. The study was ex­

plained briefly on the phone, and the fact that panel

members were required to answer four questionnaires over a

period of six months was explained to the lady of the house.

She was asked for her cooperation in answering all four

questionnaires. If she refused, the next name down, or up,

in the Criss-Cross was contacted, on an alternating basis,

as a substitute. If the substitute declined to participate,

4 The three-quarter mile radius was used for selection of panel members because it was in the primary trading area of the supermarket. Also street layout and traffic flows were considered. The three-quarter mile radius contained sufficient residents for good sampling. 5 The Haines* Columbus City and Suburban Criss-Cross Directory (Columbus, Ohio: Haines PublisTiers", Inc. , T97Tn — 88

the group of five households was passed by. This process

was continued until 202 ladies agreed to serve on the panel.

Additional effort was not necessary to obtain the desired

sample; over 1,000 possible candidate homes were located

within the area. The actual phone contact was made by a

female research assistant. The sample included families

living in single-standing homes and also apartments and

townhouses.

There were two major competitors within one block of

the test store and one other supermarket within the three-

quarter mile radius. None of the three aforementioned

competitors accepted BankAmericard nor any other credit card

during the time of the study. One competitor three miles

away did accept BankAmericard.

A control group was selected by the same procedure

used to select the test group, from a similar area within

a three-quarter mile radius around a similar shopping

center in Worthington, Ohio. This store was selected as

a control store because the Worthington area of Columbus,

like the Upper Arlington area, was composed mostly of middle and upper-income homes. Residents were reported to have similar incomes and, therefore, were expected to have

similar shopping patterns.^ The control group contained

^See Sales Management, Survey of Buying Power 104 (June 10, 1970) :D 121-123.---- — ------89

seventy-five housewives who agreed to participate in the

survey.

The two shopping centers were three and three-fourths miles apart, using a straight line measurement on a map.

The distance between then by road was five miles. There was some overlap of trading area between the two shopping centers, but it was minimal because of the Olentangy River whichprovided a natural barrier to travel. It was felt that the overlap in customers was not sufficient to con­ taminate the results of the survey.

The following addresses were excluded from the sample population:

A. Corporate and other business addresses

B. All persons whose home address was not in the Columbus mail delivery zip codes 43220 or 43221 in the tost area or 43285 in the control area, even though the phone number i*as the same as listed in the Criss-Cross Directory.

C. All persons not willing to cooperate and return all four of the questionnaires

D. All persons not remaining in the same zip code area over the life of the test. Persons moving, going on extended vacations, or other­ wise unable to remain in the area during the test were dropped from the sample.

Data Gathering Procedure

A series of four questionnaires were developed to pro­ vide the information required to understand the key vari­ ables of the study as they related to consumers and EFTS. 90

Several drafts of the questions were written and discussed with graduate students and faculty of The Ohio State Uni­ versity. An original questionnaire of fifty-nine Likert-

type attitudinal questions was prepared and tested for validity. The test used personal interviews with twenty consumers, who lived in the Columbus suburb of Grandview,

Ohio.

The test questionnaires that were completed by the consumers were analyzed for superfluous or vague questions.

Forty-four of the original questions were accepted and became the attitudinal questionnaire. The other thirteen questions were discarded because they did not produce usable responses.

A similar process was used to develop the questionnaire about customer shopping activities. About one-fourth of the original questions were eliminated by the pre-test of the questionnaire.

Demographics of the respondents were of interest to the study. A group of eight demographics were selected from a list of fifteen which had been prepared from several 7 sources. The demographics selected were those which would help to understand the consumers' use of or rejection of an EFTS.

7 See for example James F. Engel, David T. Kollat and Roger D. Blackwell, Consumer Behavior (New York: Holt, Rinehart and Winston"i 1968F, pp\ 160, 368, 580. 91

Four mailings of questionnaires to the selected members

of the panel were made. The first mailing was October 4,

1971, which preceded the beginning of the Upper Arlington

test by BankAmericard and City National Bank by a week.

The first questionnaire was a pre-test of the respondents

and contained forty-four attitudinal questions and sixteen

questions relative to the shopping behavior of the panel members.®

The second questionnaire was mailed to the respondents

December 5, 1971. Panel members were contacted, before the mailing date, by phone by a female assistant and advised

that the questionnaire was coming and urged to return it promptly. The second questionnaire contained the same

forty-four attitudinal questions plus five new ones, and g also a series of sixteen demographic questions.

The third questionnaire was mailed April 24, 1972.

Each respondent was again contacted by phone a few days previous to the mailing date advising her that the question­ naire was coming. This questionnaire contained the same forty-nine attitudinal questions contained in the second questionnaire and one question on use of the computer ter­ minals during the previous thirty days. Also four new

q See Appendix A for a copy of the actual questionnaire used in the first mailing. 9 See Appendix A for the new questions contained in the second questionnaire. 92

Likert type attitudinal questions were included in mailing number three.^

The fourth and final questionnaire was mailed July 17,

1972 and included the fifty-three attitudinal questions used in questionnaire number three and the shopping be­ havior questionnaire from the first mailing, plus one ad­ ditional open-ended request for comments. This question­ naire was a post-test questionnaire, since the test by

BankAmericard was completed June 30, 19 72. The phone con­ tact previous to mailing the questionnaires was continued with this final mailing.

It was expected returns from the panel of respondents would approximate eighty percent or more for each mailing; a total of sixty percent of the original panel was ex­ pected to complete all four questionnaires. When a re­ spondent failed to return a questionnaire, she was dropped 12 from the sample. Stamped, self-addressed envelopes were included in each mailing to make return of the question­ naires as simple as possible. A cover letter was included in each mailing urging the panel members to cooperate and

^Sne Appendix A for the additional questions contained in the third questionnaire.

^ S o c Appendix A for unique question included in the fourth questionnaire.

12See Figure Number Two, Appendix E for a flow chart of the actual returns from the four mailings. 93 13 return the questionnaires. The actual number of respon­

dents who completed all four questionnaires was 121 or

sixty percent of the test group and 50 or sixty-seven per­

cent of the control group.

After the final consumer questionnaire was mailed, two

graduate students of The Ohio State University interviewed

the owners and operators of all the retail stores who had

participated in the EFTS test. The graduate students filled

out a questionnaire composed of four parts for each of the

store personnel. The four parts were: 1) A series of

Likert type questions to determine the reaction of the re­

tail store personnel to the EFTS they had been using for the

past nine months; 2) A series of open-ended questions about

the problems, benefits, customer reaction to the compu­

terized credit system, and the support and training given

to the store employees by the bank; 3) A section of ques­ tions to determine the amount of use given the EFTS and also the increase or decrease of consumer participation during the test; and 4) General comments from the retail store employees and managers.

The questionnaire had been developed specifically for the survey of participating retailers. The basis of the questions was the same seven key variables used to develop the consumer questionnaires and also an attempt to measure

13 See Appendix A for a copy of each of the cover letters included in the four surveys. 94 14 usage of the computerized credit system. Prom the twenty-

eight participating stores, in-depth personal interviews

were obtained from fifty respondents who worked at the

checkout counters and actually used the computer terminals

in conjunction with the BankAmericard.

A complete coverage of every person who operated the

EFTS was attempted for the merchant questionnaire. All of

the employees who still worked at the participating stores were interviewed and filled out the questionnaire. One

store had changed ownership during the test period and only

the new owner was interviewed. Also two checkers had been

transferred out of town and were not available; all others were included in the data base.

Information Collected

The consumer panel questionnaires were composed of three basic segments.

Part one of the questionnaire: attitudinal questions were answered on a five-point Likert scale assigned a nu­ merical value after the data had been collected, from one to five, as follows:

^See Appendix A for a copy of the merchants* question­ naire . 95

Strongly disagree . . assigned the value of 1

Disagree ...... assigned the value of 2

Undecided ...... assigned the value of 3

Agree ...... assigned the value of 4

Strongly agree . . . assigned the value of 5

The attitude questions were developed specifically for the research undertaken.

Part two of the questionnaire: the shopping activity measurement was situationally specific for this research and, therefore, was designed for the study. The activity questions were also pre-tested as described above. The variables included in the study were:

1. Which supermarket the respondent shopped at

2. What percent of weekly purchase was made at which supermarket

3. Did the respondent shop alone or with someone; if with someone, who?

4. What was the average amount of the week's purchase at the supermarket?

5. The number and kind of trading stamps saved

6 . How supermarket purchases were usually paid for: check, cash, or credit card

The Likert Scale was developed by Rensis Likert of the University of Michigan and has been widely used in attitudinal research. See Paul E. Green and Donald S. Tull, Research for Marketing Decisions, 2nd ed. (Englewood Cliffs, N. J.: Prentice-Hall, Inc., 1*970), pp. 195-196 for a detailed explanation of the Likert Scale. See also Marvin E. Shaw and Jack M. Wright, Scales for the Measure­ ment of Attitudes (New York: McGraw-Hill Book C oV , 196?), Chapter 2. 96

7. What kind of credit cards the family had in its possession

8 . Amount of use received by credit cards in the respondent's family during the preceding thirty days

Part three asked for eight types of demographic data:

1. Number of children living at home

2. Family mobility in the last five years

3. Home ownership

4. Occupation of the head of the house

5. Marital status

6 . Age

7. Income

8 . Education

Data Analysis and Statistical Procedures

Each questionnaire was key punched and verified. The

analysis conducted used several statistical techniques which

were available as canned computer programs. A frequency

count for each segment of the data collected was made

separately. The data were analyzed several times using a

canned factor analysis program. No useful factors could

be found in the data, even though multiple runs were made

and several orthogonal rotations were employed. The data was displayed with a cross-tabulation technique.^6 Chi-

square was computed to determine statistical significance

^The BMD02S or a similar canned computer program was used for the cross-tab analysis. 97

of the sampling procedure and the questionnaires that were

returned by the respondents. An acceptable level of signi­

ficance in all parts of the study was the .05 level; how­

ever, managerial importance may be attached to responses

that were not statistically significant at the .05 level.

Additional analysis was completed to highlight findings of

interest to management of retail stores, banks or computer

makers.

Two methods of analysis were used to determine changes

in selected attitudes expressed by the respondents during

the test period. First, the attitude values of each in­

dividual were computed and compared to the mean attitude

of the total sample by using the Likert Attitude Analysis 17 computer program written by Richard Kohr. Second, the

number of respondents showing changes in attitude over time were analyzed to determine if a significant number of changes occurred in one direction or the other direction—

from agree to disagree and vice versa. The McNemar test

for the significance of changes was used for this analy- 18 sis. Returns showing a change in attitude over the period

17 Richard L. Kohr, Likert Attitude Scale Analysis (University Park, Pa.: Pennsylvania State Computation Center, 1969). See Appendix F for description of the Likert Computer Program. l g Sidney Siegel, Non-Parametric Statistics For the Behavioral Sciences (New York: McGraw-Hi 11, Inc. , 19"!T6) , pp. 6^-67. Also see Appendix F for a description of the McNemar test for significance of changes and the Kohr Likert Rating Analysis. 98

of the test were analyzed using a cross-tabulation tech­

nique.

The attitudinal questions were rated by ten professors of marketing or management at Florida Atlantic University.

Each professor rated each question on the questionnaire as positive or negative or neutral towards credit and credit cards, assuming that a hypothetical respondent had marked agree or strongly agree with every question on the question­ naire. Only those questions with ratings of positive or negative by eight or more of the professors were included in the positive or negative list, and none was included where a single professor rated a question opposite from the . . 19 majority.

A complete analysis of thirty supermarket customers who used the credit cards to make purchases at the super­ market was made of the following characteristics:

A. Use of credit cards

B . Demogr aph i cs

C. Selected attitudes

Merchant In-Depth Interviews

Interviews were conducted with all of the owners or managers of the twenty-eight retail locations that had

^Positive Attitude Questions were attitudinal question numbers 4, 7, 12, 13, 14, 19, 29,31, 36, 43, 35, 49, 50, 51, 52. Negative Attitude Questions are attitudinal ques­ tion numbers 1, 3, 5, 8, 9, 10, 15, 16, 17, 18, 20, 21, 23, 25, 27, 28, 30, 35, 38, 39, 41, 42, 53. 99

cooperated with City National Bank and installed computer

console terminals at the checkstand for use with the Bank­

Americard. The interviews were conducted after the com­ pletion of the test and the final consumer questionnaire had been sent out. Interviews were conducted on two suc­ cessive days by two researchers, both of whom were graduate students at The Ohio State University. Each of the re­ searchers took one-half of the list and interviewed the owner, or manager, or key employees who used the terminals most.

The interviews took the questionnaire that was de­ veloped, as described above, for the purpose of obtaining responses from the owners and operators of the retail stores. The questionnaires were filled out during the interview.

The purpose of the interviews was to obtain a first­ hand, fresh evaluation of the test the retailers had just participated in. Another purpose was to uncover the posi­ tive and negative points of the computerized terminal pro­ gram from the viewpoint of the merchant. Fifty usable questionnaires were completed by management and employees of the twenty-eight stores, the results of which were included in the analysis of data performed for the study.

A simple frequency count and a cross-tabulation analysis was performed on the data collected from the retail re­ spondents . 100

The supermarket made a random sampling of customers

who used the EFT in March 1972, A summary of the findings

of this sampling and a summary of total usage of the com- 20 puter console was included in the appendix. The usage

of the EFT collected by the supermarket included the net

number of EFT sales drafts, gross sales on the EFTS, and

a distribution of the amount of each purchase paid for by

BankAmericard. All data have been rounded.

Data collected by the participating merchant was

referred to as a verification of the findings of The Ohio

State University study. It was found that both sets of

data were in agreement.

Merchant Questionnaires

The questionnaires administered to the retail personnel

were composed of four parts and are described in the fol­

lowing paragraphs.:

Part A was composed of Likert type questions measuring

the perceptions held by the retailers about their customers

and the way the customers' use of the console affected business as well as how customers felt about the EFTS using

BankAmericard to pay for retail purchases. Questions were

also asked about how the store employees responded to the

in-store consoles.

20 See Tables Eighteen, Nineteen, Appendix B for a complete listing of the use of the EFTS collected by the participating merchant. 101

Part B was sentence completion questions* The re­ spondent was asked to complete the sentence begun in the questionnaire. Topics covered in the questions included the problems with the system, customer reactions, the best features of the computer console use in the store, and a reaction as to whether the respondent would participate in the same type of test in the future.

Part C of the questionnaire was composed of estimates of customer understanding and use of the computer consoles in the store at the beginning of the test and also at the end of the test.

Part D was a final invitation for comments from the merchant respondents.

Summary

The research was designed as a longitudinal study of use of credit cards on computer terminals and change asso­ ciated with use of credit cards. A panel of 277 women was selected from two suburban sections of the greater Columbus metropolitan area to be studied during the nine months of the credit card test in Upper Arlington, Ohio. Four questionnaires were completed by the panel members.

Data was obtained from the panel members showing shop­ ping activity, use of credit cards, charging at grocery supermarkets, and computer console credit transactions in addition to responses to attitudinal questions and demo­ graphic data. 102

Questionnaires were also administered to the retail store personnel included in the test. Data was obtained from the retailers showing problems that had developed while using the computer terminals. Specific advantages or posi­ tive points were also indicated by the retailer respondents.

Perceptions of the customer reaction to the possibility of using bank credit cards were also obtained from the retail store managers. Understanding of consumers' responses to the use of computer consoles in retail stores as observed and reported by the retail merchants was an additional source of information in the study. It was anticipated that both the retailers and the consumers would report the same problems and benefits.

The statistical techniques used to make the analysis included: frequency count, cross-tabulation, Richard

Kohr Likert Scale Analysis, the HcNemar test for signifi­ cance of changes, and a detailed analysis of thirty users of credit cards in the supermarket. The chi-squared sta­ tistic was computed in all situations where it was an appropriate test.

A significance level of oC = .05 was considered statis­ tically significant in all test situations. An additional review of the data was included in the study to find mana- gerially significant interpretations of the data. Some findings may be managerial!/ significant even though 103 rejected as statistically insignificant and some statis­ tically significant findings may not be meaningful for management*

The next chapter presents the findings and an analysis of all of the questionnaires used in the study. CHAPTER IV

FINDINGS AND ANALYSIS OF THE RESEARCH

Introduction

The findings of the research on consumer usage of com­

puter consoles for credit cards are presented in several

sections which correspond to the null hypotheses and the

problem areas presented in Chapter One.

Section one presents findings relative to the first

guiding hypothesis. The hypothesis stated that consumers

must perceive some personal advantage in the use of computer

terminals in conjunction with credit cards or they would

not support them.

The second guiding hypothesis was tested in the next

section. This hypothesis stated that consumer acceptance

and use of computer terminals for credit transaction would vary with demographic differences of the consumer. Credit card users in general were broken into three groups, i.e., heavy users, light users, and occasional or non-users, and

the demographics of each group were analyzed. The users of the automated terminals were compared with the users and non-users of all credit cards.

104 105

A comparison of the demographics of users of in-store

terminals with department store credit card users was made

in section three to determine if the terminal users were a

unique segment or if they were a subset of all credit card

users.

Section four presents data which answers the question:

"Did panel respondents accept credit cards as an alternative method to cash and checks to pay for supermarket purchases?”

Section five examines consumer attitude clusters which were associated with use of credit cards in supermarket shopping and other uses of the computer terminals. The attitudes were measured by a Likert attitude scale. Atti­ tude change over the nine months of the study was tested for significance by the ‘lcNemar test of the significance of change.

Finally, an analysis of the findings from the merchant questionnaires was made. This analysis included information gathered from the owners, managers, and employees who used the computerized terminals in retail stores during the study.

The chapter ends with a short summary of the findings.

Findings Relative to the First Underlying Hypothesis

The guiding hypothesis for section one was that the consumers must perceive some personal advantage in the use of a charge card on a computer terminal in the retail stores 106

or they will not use the EFT terminals.* There were nine

respondents in mailing number one who used a bank charge

card to pay for supermarket purchases, which was not suf­

ficient for a meaningful analysis.

Thirty respondents reported using the computer ter­

minals during the thirty days prior to mailing number two.

The null hypothesis states: "Respondents who used the

computer terminals will not have positive answers to the

favorable Likert questions." That is, the item analysis

on the Kohr Likert Rating will be 3.23 or less. Results of

the hypothesis testing are summarized in Table Two.

The three positive questions that were found to have a

statistically significant favorable response by the thirty users of the computer terminals were:

2. Checks are becoming very difficult to cash unless you are known by the store personnel.

40. Using a bank charge card is much easier than trying to cash a check in a new store.

43. It is very easy to take merchandise back if you change your mind after paying for it with a bank charge card.

The four positive questions that were found to have a negative response were:

7. Money is a nuisance and is too easy to lose.

*See Table Number Forty-Eight, Appendix 11 for a matrix showing all of the null hypotheses tested. 107

TABLE 2

NULL HYPOTHESIS TESTS MAILING NUMBER TWO

Question Likert Accept/Reject 2 Significance Number Rating Null Hypothesis Level

2 3.60 Reject .0227 level 7 2. 40 Do not reject Not significant 14 2. 53 Do not reject Not significant 19 2.53 Do not reject Not significant 40 4. 06 Reject .0227 level 43 3. 53 Reject .0227 level 45 2. 50 Do not reject Not significant

14. Most people find credit cards help then balance their budget.

19. It would be nice to be able to charge all purchases and not have to keep track of a check book or carry cash.

45. People like to use a bank charge card to pay for supermarket purchases be­ cause it leaves then more money for other things.

There were twenty-eight respondents who reported using their charge cards in conjunction with computerized ter­ minals for purchases during the month previous to the third mailing. The second null hypothesis tested was: "Re­ spondents who used the computer terminals will not have positive answers to the favorable Likert questions." That is, the item analysis on the Kohr Likert Rating will be

3.23 or less. Results of the null hypothesis tested in

2 See Table Number Twenty, Appendix C for a complete listing of all Likert questions and the responses given to them. 108

TABLE 3

NULL HYPOTHESIS TESTS MAILING NUMBER THREE

Question Likert Accept/Re ject Significance Number Rating Null Hypothesis Level

2 3.20 Do not reject Not significant 7 2.40 Do not reject Not significant 14 2.40 Do not reject Not significant 19 2.43 Do not reject Not significant 40 3.93 Reject .0227 level 43 3.77 Reject .0227 level 45 2.60 Do not reject Not significant

nailing number three are summarized in Table Three.

Two positive Likert questions in mailing number three

were found to have significant positive responses. They

were questions numbered:

40. Using a bank charge card is much easier than trying to cash a check in a new store.

43. It is very easy to take merchandise back if you change your mind after paying for it with a charge card.

The other five positive questions were answered with non-positive responses which fell into the area of re­

jection by the twenty-eight respondents who were users of the computer terminals.

The results of the twenty-one null hypothesis tests of customer perceptions of an advantage in using the EFTS were: Seven of the tests could not be completed because of insufficient data. Fourteen tests were completed. 109

Five of the hypotheses were rejected and nine were accepted.

Five of the fourteen tests turned out positive or favorable

to EFT and nine were negative or unfavorable.

A calculation of the average Likert rating of the re­

spondents who used the computer terminals in any of the

last three mailings also indicated lack of a positive re- 3 sponse to EFT. The average response of users of the com­

puter terminals in mailing number two was 2.995, mailing

number three was 2.973, and mailing number four was 2.916.

These average ratings were in the middle of the Likert

rating scale and indicate that the average respondent who

used the terminal was undecided about credit card use on

computer terminals as measured by the attitudinal question­

naires ,

The users of the terminals were not convinced that

there were many advantages in use of the EFTS. Consumer

interest in and use of the automated credit system was low.

Findings Relative to the Second Hypothesis

The second guiding hypothesis was that consumer accep­

tance and use of computer terminals for credit transactions would vary with demographic differences of the consumer.

Demographic influences on the use of credit cards on

3 See Tables Twenty-one, Twenty-two, Twenty-three, Twenty-four, Twenty-five. Appendix C for total and average Likert ratings for each mailing and for each respondent. 110

computer terminals located in retail stores are summarized 4 in Table Number Four.

Significant differences in demographic characteristics

were found in six of ten characteristics. All six of the

instances of demographic differences were found in com­

paring terminal users with non or occasional users. There

were no significant differences between light users and

non-users or between light and heavy users. The six areas

of significant difference were: 1) children living at

home, 2) education, 3) occupation, 4) working wives,

5) ago, and 6) income.

There were children living at home with ninety-seven percent of the users and sixty-four percent of the non­ users. The differences were significant at the .001 level.

The users of EFT had more education than non-users. How­ ever, non-users who had a college degree were thirty-three percent compared to twenty-nine percent of the users. Non­ users who had completed less formal schooling than a college degree were thirty-three percent as compared to twelve per­ cent of the terminal users in the same category. There were twenty-eight percent of the non-users who had completed some graduate work or a graduate degree, while fifty percent

4 See Table number Forty-nine, Appendix H for the demographic null hypothesis and Tables Fifty, Fifty-one, and Fifty-three, Appendix I for a cross-tabulation pre­ sentation of demographics versus five categories of re­ spondents . Ill

T A B L E 4

DEMOGRAPHICS AND CREDIT CARD USE OF COMPUTER TERMINAL USERS VERSUS ALL RESPONDENTS

Demographic Significant Significance Characteristic D i f f e r e n c e L e v e l D i f f e r e n c e

Are there any Y e s .001 Terminal users children living have more chil­ a t h o m e ? dren at home than non-users.

How long have N o you lived at your present a d d r e s s ?

How many times N o have you moved in the last 5 years?

Are you renting, N o leasing, buying, or own your home?

Last year of Y es .01 Users reported school completed more formal by head of house? e d u c a t i o n .

what is the occu­ Y e s .05 More users are pation of the in professional head of the house? and managerial occupations than non-users.

Does the lady of Y es .001 Wives of ter­ the house work minal users f o r p a y ? work less often than non-users.

What is the age Y e s .05 Terminal users of the head of are in middle- the h o u s e ? age ranges. More non-users a r e o l d e r .

Please indicate Y e s .01 Terminal users category of have higher in­ family’s total comes than non­ income per year. u s e r s .

What is your marital status? N o 112

of the users reported graduate work or a graduate degree

completed. The differences were significant at the .01

level.

The occupation of the respondents who used the computer

terminals was reported to be thirty-five percent profes­

sionals, thirty-four percent in management, for a combined

sixty-nine percent in the two categories. Non-users re­

ported twenty-four percent professional and twenty-six

percent managerial occupations, for a total of fifty per­

cent. The differences were significant at the .05 level of

confidence.

The lady of the house worked full-time in three percent

of the cases in the terminal user group and part-time in

seventeen percent of the cases. The non-user group re­

ported full-time employment for the lady of the house in

twenty-two percent of the cases and part-time employment

twenty-four percent of the time. The difference between

users and non-users was significant at the .001 level of

confidence.

The age of the terminal users was reported to be 25-

34 years old in twenty-eight percent of the cases, and between 3 5 and 49 years old in seventy-two percent of the cases. The non-users were older with twenty-two percent reporting their age in the 25-34 category and thirty-one percent between 35 and 49 years old. Over 49 years old accounted for forty-five percent of the non-users, while 113

none of the users was over age 49. These differences were

significant at the .01 confidence level.

The final demographic characteristic where a signi­

ficant difference was found was family income. The terminal

user group reported incomes of $15,000 per year or less in

twelve percent of the cases, while non-users reported the

same income thirty-three percent of the time. Eighty-five

percent of the terminal users reported incomes of $15,0 01 or above, while fifty-one percent of the non-users reported

similar incomes. The differences were significant at the

.01 confidence level.

There was a marked similarity between the heavy users of credit cards and the users of the computer terminals.

The non-users were also found to be most like the light users of credit cards in general.

The four demographic characteristics where there was no significant difference between the different categories of users were: 1) length of time at present address,

2) number of times moved in the last five years, 3) home ownership, and 4) marriage status.

EFTS Users Compared to Department Store Card Users

The question assessed in section three was: "Are com­ puter terminal users a unique population or are they a sub­ set of credit card users in general?" Ten additional null hypotheses were tested to determine if the users of Lazarus 114

credit cards were demographicslly similar to terminal users

or if differences existed between the two groups.

Table Number Five presents the results of the ten additional null hypotheses tested in the comparison of terminal users and Lazarus Department Store charge card users.

A significant difference was found in five of the demo­ graphic characteristics compared, and no difference was found in the other five characteristics. The demographics where a significant difference was found were: 1) chil­ dren living at home, 2) education, 3) working wives,

4) age, and 5) total family income.

There were children living at home reported by ninety- seven percent of the charge card users who used the ter­ minals, while seventy-six percent of the Lazarus charge card users reported children living at home.

The educational level of the terminal users was higher than the Lazarus charge card group. Fifty percent of the terminal users reported completing some graduate work, while thirty-three percent of the Lazarus Department Store credit card users had college work above the undergraduate degree. Thirty-one percent of the Lazarus charge customers had not completed their undergraduate college degree, while twelve percent of the terminal users did have a college degree. Holders of an undergraduate degree were reported as twenty-eight percent of the X.azarus group and twenty-nine 115

TABLE 5

DEMOGRAPHICS AND CREDIT CARD USE5 COMPUTER TERMINAL USERS COMPARED WITH DEPARTMENT STORE CREDIT CARD USERS

Demographic Significant Significance Characteristic D i f f e r e n c e L e v e l D i f f e r e n c e

Children living Yes .001 Terminals have children a t h o m e living at home more often than Lazarus card u s e r s .

Time at present NO a d d r e s s

Times moved in N o last 5 years

Home ownership N o

E d u c a t i o n Y e s .05 More Lazarus users were not college graduates; more terminal users have graduate studies.

Marital status NO

O c c u p a t i o n NO

Working wives Y e s .01 More working wives use Lazarus charge cards than the computer ter­ m inals.

A g e Y es .001 Terminal users all fell in 25-49 age range; more older respondents use Lazarus cards.

Total family Y es .001 Terminal users reported i n c o m e higher incomes.

5 Sec Tables Fifty-four, Fifty-five, Fifty-six, and Fifty seven, Appendix I for a conpletc presentation of the data summarized in Table Number Five, 116

percent of the terminal user group.

The lady of the house worked full-time in fifteen per­ cent of the cases of Lazarus charge customers, while three percent of the terminal users' wives were reported to be working full-time. Part-time employment by ladies was reported by twenty-one percent of the Lazarus group and seventeen percent of the computerized credit card customers.

The computer terminal credit card users were all found in two age categories: twenty-eight percent in the 25-34 age bracket and seventy-two percent in the 35-49 age range.

The Lazarus charge customers spanned a greater age range, from under 21 years old— three percent, to over 65 years old— five percent. The 50-64 age range contained twenty- two percent of the Lazarus credit card customers. Terminal users were younger than Lazarus credit card users.

Total family income was higher for the automatic com­ puterized credit card customer than the Lazarus credit card customer. Eighty-five percent of the terminal users re­ ported incomes of $15,001 or above, while twenty-five per­ cent of the Lazarus group reported in the same income range.

There was no significant difference reported between

Lazarus charge card users and the computer terminal users in: 1) how long they had lived at their current address,

2) number of times moved during the last five years, 3) home ownership, 4) marital status, and 5) occupation of the head of the house. 117

Demographics did make a difference in the use of the computer terminals for credit card purchases. The ter­ minal users were younger, better-educated, had children

living at home more often, and fewer of the wives worked as compared to either Lazarus credit card users or users of credit cards in general. The terminal users had more professional people and managers than credit card users in general, but there was no significant difference in the occupational demographics between terminal users and Lazarus

Department Store credit card users.

The answer to the question posed in section three was that one-half of the demographic characteristics were dif­ ferent in users of the computer terminals when contrasted with credit card users in general or the Lazarus Department

Store credit card users. The other one-half of the demo­ graphics were the same.

There were more similarities between terminal users and Lazarus credit card users than between terminal users and either light or non-users of credit cards. There was also more similarity between terminal users and heavy users of all credit cards than between terminal users and light or non-users of credit cards.

The users of computer terminals in conjunction with their credit cards were a subset of all credit card users. 118

TABLE 6

TOTAL USE OF CREDIT CARDS MAILING NUMBER FOUR6

Times Percent of Percent of Percent of Percent Used Computer Total Total Lazarusi of Super Per Terminal Credit Card Credit Card market Month Users Users Users Users

None 22% 15% 29% 21% 1-4 times 78% 10% 50% 79% 4-8 times 14% 14% 9-12 times 19% 7% 13-16 times 12% Over 16 30% times

Percent of total showing any use— last 30 days 18% 61% 54% 5%

Terminal Credit Card Use As An Alternate Method of Payment

The size of the subset of total credit card users who were users of the computer terminals was eighteen percent of the total sample, or twenty-nine percent of the users of any kind of credit card. Table Six shows use of terminals in conjunction with credit cards as well as other uses of credit cards.

Five percent of the total respondents used their Bank-

Americard at least once to make purchases in the grocery supermarket.

See Tables Numbered Fifty, Fifty-one, Fifty-two, and Fifty-four, Appendix I for detailed information about the use of credit cards as reported by the respondents. 119

There were nine consumers who used credit cards to pay

for supermarket purchases in mailing number one, nineteen

in mailing number two, eleven in mailing number three, and

thirteen in mailing number four.

Credit card holders who used any credit card during the previous thirty days to mailing number four were sixty- one percent of the total sample. Fifty-four percent of the respondents reported using their Lazarus charge card during the last month.

All terminal users reported their use of the terminals as being from one to four times. All grocery supermarket users in the sample reported only one use of the credit card at the supermarket during the last thirty days.^

Credit card users in general used their cards more often. A total of seventy-five percent of them used their credit cards five or more times, and thirty percent re- g ported over sixteen uses during the previous month.

Lazarus charge card users also used their Lazarus cards more often than the terminal users. Twenty-one per­ cent of the Lazarus charge customers reported five or more uses of their credit card during the previous thirty days.

7 See Table Number Seventeen, Appendix B for a frequency count of shopping activities, mailings number one and four compared. O See Figures Number Three and Four, Appendix E for charts of the total number and use of credit cards posses­ sed by the respondents. 120

Consumers did not use their credit cards on the com­

puterized terminals in supermarkets in sufficient numbers

or enough times per month to consider computerized credit

cards as a viable alternate to cash and/or checks in the

supermarket as shown by this study.

Consumer Attitude Clusters and Use of Automated Credit Cards

The respondent filled out and returned a Likert type questionnaire designed to measure feelings and the strength of the feeling toward credit cards and use of credit cards on the computer terminals. There were forty-four questions asked in all four mailings. Mailing numbers two and three had five additional Likert questions, or a total of forty- nine; mailing number four had four new questions, or a total of fifty-three Likert type questions.

The Likert data was analyzed in several different q ways. All responses were categorized into three areas which were considered attitude clusters. The three cluster areas were statements where: 1) responses were favorable to electronic funds transfer and/or credit card usage,

2) responses were unfavorable towards automated credit, and 3) responses were undecided.

The statements that were clustered together as favor­ able toward credit cards are shown in Table Number Seven.

q See Tables Numbered Twenty-six, Twenty-seven, Twenty- eight, Twenty-nine, Thirty, and Thirty-one, Appendix C for detailed analysis of the responses to the Likert type questions in all mailings. 121 TABLE 7

CLUSTER OF QUESTIONNAIRE STATEMENTS ANSWERED POSITIVELY TO ELECTRONIC FUNDS TRANSFER/ AUTOMATED CREDIT CARD TERMINALS

S t a t e m e n t N u m b e r S t a t e m e n t

1 Stores that accept bank charge cards (Master Charge or BankAnericard) charge higher prices than those who don't.

2 Checks are becoming very difficult to cash unless you are known by the store personnel.

3 Sometimes the monthly bill from the bank is difficult t o pay.

6 Most people would stop patronizing a store if they refused to cash their personal check.

8 The bank is more likely to make a mistake with a credit card than with a personal check.

18 Most stores act like they do not want people to use a bank charqe card...they act like they are doing people a big favor to accept a bank charge card.

25 Onco you get started on a bank charge card, you can never quit because it takes too much money to catch up.

28 People prefer to carry cash to pay their bills.

36 Most people like the idea of using the bank money for a month free when they use a bank charge card.

40 Using a bank charge card is much easier than trying to cash a check in a new store.

41 The only ones to benefit from credit cards are the banks.

43 It is very easy to take merchandise back if you change your mind after paying for it with a bank charge card.

47 People tend to purchase better qualities or higher- priced items at the supermarket on the trips when they know they are going to use a bank charge card to pay for their purchase.

49 Most people tend to stock up on specials and buy larger orders at the supermarket when they know they are going to use their bank charge card to pay it. 122

TABLE 8

CLUSTER OF QUESTIONNAIRE STATEMENTS ANSWERED NEGATIVELY TO ELECTRONIC FUNDS TRANSFER/ AUTOMATED CREDIT CARD TERMINALS

Statement Number Statement

4 Everyone uses a bank charge card; it's the modern way.

5 Peonlfi spend too much money with the new bank credit cards because they are too easy to use.

7 Money is a nuisance and is too easy to lose.

9 It is poor budgeting practice to charge super­ market purchases on a bank charge card.

10 When people in front of me in the checkout line pay with a credit card, it takes more time.

12 If people could charge almost everything they needed, it would be worth a few cents more per order.

14 Most people find credit cards help them balance their budget.

17 People buy things that they do not need because they can charge it and pay later.

19 It would be nice to be able to charge all pur­ chases and not have to keep track of a check book or carry cash.

20 People would over spend in a system without cash or checks, but only credit cards.

21 There are too many credit cards to carry.

24 It is a good idea to have the paycheck deposited directly to the bank account by the employer.

27 It is a lot faster to pay cash and skip all that fus3 with a bank charge card. 123

TABLE 8 Continued

Statement Number Statement

29 It is a good idea to have the utility bills paid automatically from your checking account.

30 People would lose control over their personal financial matters under a no-cash, no-checks system.

32 They should have separate checkout lanes for credit card customers.

33 It is a good idea to have all bills paid auto­ matically by the bank from your checking account

34 With automatic payment of bills by the bank, people would not be able to pay who they wanted when they wanted to pay them.

37 Most people would prefer cancelled checks as proof of payment rather than a monthly state­ ment of amount paid each firm by the bank.

38 with automatic payment of bills by the bank, it would be impossible to refuse to pay a disputed bill.

42 It is too easy to get credit cards.

44 Most people prefer personal service at a bank rather than an automatic machine teller.

48 They should provide a book to keep track of all the bank credit card purchases made each month.

53 It takes longer to go through the checkstand when they use the automated terminals to accept a bank charge card.

The cluster of statements that were negative or opposed to electronic funds transfer/automated credit card usage are shown in Table Number Eight. 124

TABLE 9

CLUSTER OF OUESTIONNAIRE STATEMENTS WHERE RESPONDENTS WERE UNDECIDED ABOUT AUTOMATED CREDIT CARDS OR EFT

S t a t e m e n t

Most people would stop patronizing a store if they re­ fused to accept their bank charge card.

13 Most people would like to be able to make purchases at the supermarket on a hank charge card.

15 Most people would take trading stamps in preference to being able to charge their purchases at a supermarket.

16 People are more apt to be overcharged when paying with' a bank charge card than with a Check.

22 Most people use a bank charge card at the supermarket any time they are short of cash.

23 Our society is already using too many machines and is too regimented by computers.

26 It is a good idea to receive an automatic loan from the bank in case of a checking account overdraft.

31 Parents should give their teenage children experience in using a bank charge card.

35 The bank charges too much interest on a charge card a c c o u n t .

39 The Business, Government, Computer World knows too much about my personal things already, • 45 People like to use a bank charge card to pay for super­ market ‘purchases because it leaves them more money for other things.

46 A new direct line to the bank would be more accurate than the old system of charging.

50 I would like to have the automated BankAmericard ter­ minals like the ones in use in Upper Arlington available to serve charge card customers in all stores that accept my BankAmcricard.

51 The automated terminals to process the BankAmericard in many different retail stores have been a good thing for the customer.

52 The fact that a supermarket now accepts BankAmericard is a good thing for its customers. 125

The final cluster of statements was the undecided cate­

gory. Responses to the questionnaire statements that were

in the mid-range of the Likert scale from 2.75 to 3.25 were

considered undecided and are shown in Table Number Nine.

There were fourteen statements in the positive or

favorable to automated credit cards cluster. The negative

cluster contained twenty-four statements, and the undecided

cluster included fifteen statements.

The final statement of the Likert type questionnaire

in the last mailing was an open-ended invitation: "Your comments on this study are encouraged." This was followed by several lines for the respondent to use for her own comments. A summary of the responses to the open-ended invitation was prepared.*0

There were responses to the open-ended invitation from sixty-five percent of the respondents in the final mailing. Thirty-four percent of those responses were favorable towards automated credit cards, and sixty-two percent were unfavorable, with four percent of the responses addressing subjects that could not be classified as either favorable or unfavorable.

The general feelings of the respondents were not favor­ able to electronic funds transfer or automated credit cards.

More of the questionnaire statements were clustered in the

*°See Table Fifty-nine, Appendix K for the tabulation of all responses to the final statement. 126

negative area than positive by a ratio of twenty-four nega­

tive to fourteen favorable. The same feeling of negative­

ness was found in the open-ended statements written by the

respondents by a margin of two to one over the favorable

responses.

Since there were few users of the computer terminals and even fewer who used charge cards in supermarkets, an in-depth analysis of all of the respondents who did use the computer terminals to charge purchases on BankAmericard was included in the analysis of the data.

An In-Depth Analysis of Respondents Who Used The Automated Terminals

Respondents who reported using the automated terminals in any of the last three mailings numbered forty-nine, which was forty-two percent of the test group that returned ques­ tionnaires in all of the four mailings. There were thirty respondents who used the computer terminals in mailing number two, twenty-eight in mailing number three, and twenty-three in mailing number four. None of the control group reported use of credit cards on automated terminals during the time of the survey.

There were nineteen users of the computerized terminals who used their BankAmericard to purchase groceries at least once during the test. The nineteen was thirty-nine percent of the users of computer terminals, and eleven percent of 127 the total number of responses received from the test group respondents.

Twenty-three of the computer terminal users reported usinq their BankAmericard on the terminals in only one questionnaire of the three sent during terminal operation in the stores. Twenty-two of the respondents said they used the terminals in two mailings. Six of the respondents reported using the automated terminals in all three of the questionnaires sent to them after the City National Bank computer test began in Upper Arlington, Ohio.

After the identification and listing of each user, and in which mailing or mailings he used the charge card, the McNemar test for significance of changes was computed for the respondents' change in use of charge cards on the computer terminals.^ Three tests were made: one on changes between mailing numbers two and three, another be­ tween mailing numbers two and four, and the third on changes between mailings number three and four.

The null hypothesis tested was: "Changes from use to non-use or from non-use to use of charge cards on computer terminals between mailings number two and three will not be random."

The results of the tests are shown in Tables Ten,

Eleven, and Twelve.

^ F o r a discussion of the McNemar Test see Appendix F. 128

TABLE 10

THE McNEMAR TEST FOR SIGNIFICANCE OF CHANGES BETWEEN MAILINGS NUMBER TWO AND THREE

Non-Use Use

Change from use in mailing Use in both mailings number two to non-use in number two and three, Use mailing number three, re­ respondents numbered: spondents numbered: 2 , 32, 3, 8 , 13, 21, 43, 45, 41, 47, 61, 6 6 , 67, 81, 95, 48, 51, 56, 69, 75, 113, 127, 131, 142, 143, 154, 80, 94, 99, 118, 136, 190 140, 151, 196 = 16 -19

Non-use in both mailings Change from non-use Non- number two and three, re­ in mailing number two use spondents numbered: 28, 91, to use in mailing 122, 129, 130, 135, 176 number three, respon­ =71 dents numbered: 25, 27, 44, 82, 97, 113, 121, 131, 142, 143, 154, 191 =12

McNemar Test: f | f l - D | - l ) 2 - 2 = .321 < 3.84 A+D 28

Therefore, the null hypothesis was rejected. The changes were random and were not significant.

A summary of the McNemar tests of the change from use to non-use and from non-use to use of the computerized ter­ minals by the respondents from one mailing to the next showed that there was no significant change in use of the terminals between mailings number two and three or three and four. There were less users in mailing number three than in mailing number two. Also there were fewer users of 129

TABLE 11

THE MCNEMAR TEST FOR SIGNIFICANCE OF CHANGES BETWEEN MAILINGS NUMBER TWO AND FOUR

Non-Use Use

Change from use In mailing Use in both mailings number two to non-use in number two and four, mailing number four, respon- respondents numbered Use dents numbered: 2, 3, 8 , 13, 32, 43, 45, 47, 56, 21, 41, 47, 61, 67, 69, 80, 6 6 , 75, 131, 136, 91, 94, 95, 99, 113, 118, 127, 196 140, 142, 143, 151, 154, 190 = 10 = 24

Non-use in mailing numbers Change from non-use Non- two and four, respondents in mailing number two Use numbered: 27, 44, 121 to use in mailing = 65 number four, respon­ dents numbered: 2 0 , 25, 28, 82, 91, 97, 122, 129, 130, 135, 146, 176, 191 =13

McNemar Test: X2= fiA-Df-1) 2 = (10) = 2.703 < 3.84 A+D 37 Therefore, the null hypothesis was rejected; the change was not significant.

the computerized terminals in mailing number four than there were in mailing number three, but the differences were not significant.

The total reduction in users from mailing number two to mailing number four was not significant at the .05 level of significance using the McNemar test.

The three tests shown in Tables Ten, Eleven and Twelve utilizing the McNemar non-parametric test for the 130

TABLE 12

THE MCNEMAR TEST FOR SIGNIFICANCE OF CHANGES BETWEEN MAILINGS NUMBER THREE AND FOUR

Non-Use Use

Change from use in mailing Use in both mailings number three to non-use in number three and four, Use mailing number four, re­ respondents numbered: spondents numbered: 3, 8 , 25, 43, 45, 56, 75, 82, 13, 21, 27, 44, 48, 51, 69, 97, 136, 146, 191, 196 80, 94, 99, 118, 121, 140, = 11 151 =16

Non-use in both mailings Change from non-use in number three and four, mailing number three to Non- respondents numbered: 2, use in mailing number Use 41, 61, 67, 81, 95, 113, four, respondents num­ 127, 142, 143, 154, 190 bered: 20, 28, 32, 47, =78 6 6 , 91, 122, 129, 130, 131, 135, 176 =12

McNemar Test: (|A-n) -1) = (_J3)2 = .321 < 3.84 A+D 28

Therefore, the null hypothesis was rejected. The changes were random and were not significant.

significance of changes showed that the respondents did not change in use of the computer terminals in conjunction with credit cards in any significant degree during the last three mailings.

In summary, responses to the Likert type question­ naires clustered in three general areas. Most of the re­ sponses were unfavorable toward EFT and the retail ter­ minals used for the test of automated credit card usage. 131

Both the response clusters and the high degree of non-use of the terminals indicate the same thing. The majority of the consumers were not in favor of the automated credit system; however, there was a sizeable minority of the re­ spondents who were in favor of EFT and the retail termi­ nals .

Findings From the Merchant Questionnaires

Findings from the merchant questionnaires were or- 12 ganized into three sections; 1) responses to the Likert type questions which presented the general feelings of the retail store personnel relative to the EFT system which was installed in the stores they worked in, 2 ) estimates as to customer understanding and use of the computer ter­ minals and how these changed during the nine months of operation, and 3) responses to several open-ended ques­ tions presented to the employees of the stores as an in- depth study of the EFTS used in the test.

A. Store Personnel Perception of the EFT Test:

Tables Thirteen, Fourteen and Fifteen summarize the feelings of the store personnel about use of the computer terminals in Upper Arlington, Ohio stores. Table Thirteen shows statements that received favorable responses from the store personnel.

12 See Appendix A for a copy of the merchant question­ naires . 132

TABLE 13

FAVORABLE STORE EMPLOYEE RESPONSES TOWARD THE EFTS TESTED WHERE THEY WORKED

Percent Percent Statement Agree Disagree Meaning

Most consumers seemed 76% 20% Customers were to be aware of the aware of the CNB BankAmericard program. Program.

My employees or fel- 26% 52% Employees were low employees were not reluctant reluctant to use the to use the console device all credit card through the test terminals. period.

The CNB Bank- 68% 18% The CNB Bank­ Americard program Americard pro­ is a good idea. gram was a good idea.

The program was 26% 58% The program more trouble than was not more it was worth. trouble than it was worth.

12 The CNB Bank­ 20% 50% The program Americard program was not poorly was a good idea but planned and poorly planned and implemented. implemented.

Retail store employees generally gave favorable re­ action to the concept and promotion of the EFT program or test conducted by City National Bank in the stores where they worked. Customers were aware of the EFTS test pro­ gram. The store employees rated the test as a good idea that was well-planned and implemented and was considered to be worth any trouble it caused. 133

TABLE 14

UNFAVORABLE RESPONSES BY STORE EMPLOYEES TOWARD EFTS

Percent Percent Statement Agree Disagree Meaning

The program resulted 20% 48% Not much new in developing new business was customers for my generated, if business. any.

Customers waiting in 42% 16% Customers did line behind a custo­ seem irritated mer using the console by the delay device seemed irri­ caused by tated by the delay. using the computer con­ sole .

I encouraged my 22% 36% Not many customers to use the store employ­ console device when­ ees encour­ ever possible. aged custo­ mers to use the console.

The console device 16% 68% Use of the significantly in­ computer con­ creased the speed sole did not with which we were significantly able to serve our increase the customers. speed of cus­ tomer service,

The other side of the discussion as presented by the employees was that there was little if any new business generated by the new charge system, which proved to be both slow and irritating to some of the customers. The over-all analysis was that not much benefit for the stores was gained from the use of automated credit cards. 134

TABLE 15

MERCHANTS' ESTIMATE OF CUSTOMER REACTION AND USE OF COMPUTER TERMINALS FOR CREDIT CARDS

Estimated Percent Statement of Degree of At Beginning At End Customer Participation Change

Less than 30-75% Aware of program Awareness re­ 30% ported up by 88% of mer­ chants

Less than 15-60% Understood how the Understanding 15% program worked reported up by 76% of merchants

Less than Still Customers use of the No change re­ 15% less ported by 44% than Use up by 30% 15% of merchants

Less than About Customers who were No change re­ 15% 15-30% frequent users of ported by 50% the terminals Use reported up by 32% of merchants

About 15% Less Start to use termi­ No change-- than nal and then switch 50%; more of­ 15% to other payment ten— 16%; less system often— 22%

15*30% 15-30% Malfunction of system No change— 50%; more of­ ten— 10%; less often— 38%

15-30% 15-30% Unreasonably long de­ No change— lay when using the 34%; more of­ system ten— 4%; less often— 46%

The store employees did not actively promote the use of the credit card console. Responses to the questionnaire 135

indicate a neutral position by most of the store owners

and operators. Some were reluctant to use the equipment

at the beginning of the test program, and there was a divi­

sion of opinion among the store personnel as to whether the

customers understood how the program worked.*3

B. Customer Understanding and Use of the Computer Consoles:

Few customers of the participating merchants under­

stood the EFTS used in Upper Arlington, Ohio at the begin­

ning of the program. Table Fifteen presents estimates of

customer awareness, understanding, and use of the computer

terminals at the beginning and at the end of the test period.

Awareness of the program was reported to be less than

thirty percent of the customers at the beginning of the

test, but it went up to about seventy-five percent as time passed by, as estimated by eighty-eight percent of the merchant respondents. Understanding of the computerized credit system was estimated as less than fifteen percent at the beginning and between fifteen and sixty percent at the end, as reported by seventy-six percent of the merchant respondents. They said that understanding of how the pro­ gram worked increased among their customers during the nine months' duration of the City National Bank test.

13 See Table Thirty-seven, Appendix D for all responses to the Likert questions administered to the store personnel. 136

Use of the terminals was reported to be less than

fifteen percent of customers both at the beginning and the

end of the program. No change in use during the duration

of the test period was reported by forty-four percent of

the merchants surveyed.

Customers and store employees did become more comfor­

table using the terminals and had less problems as time went on. The end of the program found a small percentage

of increase in frequent users of the terminals, less mal­

function, and fewer unreasonably long delays than was re­

ported for the beginning of the test period.

The merchant respondents in general felt the program went smoother as time passed. They did not find a strong demand for or acceptance of the computer terminals, how- 14 ever.

C. Merchant Response to Open-Ended Statements in the Questionnaire:

The merchant questionnaire contained thirteen open- ended statements inviting the store employee to bring out in his own words his impressions and feelings about the use of the computer terminals by his customers as well as his own reaction to the EFTS that had been in operation for

14 See Table Thirty-eight, Appendix D for complete estimates by the merchants as to customer participation in the Upper Arlington, Ohio EFTS test. 137

TABLE 16

RESPONSES BY STORE PERSONNEL TO OPEN-ENDED STATEMENTS

Number of Positive Statements Responses*

It was good. 43 Would do it again 30 It was convenient for the store or customer. 20 It provided instant credit. 20 The program was very good. 19 Good for the store to get their money quickly 19 The program was O.K. 18 Could catch stolen credit cards 9 Helped prevent over-charging on the card 8 Not necessary to carry cash 6 It was very accurate. 4 Total

Negative Statements

No response 109 It took too much time. 76 Was bad when the equipment did not work 70 Took too long to wait for authorization 9 Bad when customers did not have magnetic strip card 8 Extra paper work 8 Customers did not like to wait. 8 Would not do it again 8 Not enough advertising 7 It was a bother. 4 Total T 5 7

*Only responses of three or more per statement are included on the table.

15 nine months prior to the time of the survey. The

See Tables Numbered Thirty-nine, Forty, Forty-one, Forty-two, Forty-three, Forty-four, Forty-five, and Forty- six for a complete presentation of all responses to the Likert and open-ended statements in the merchants survey. 138

responses from all the store personnel followed a similar

pattern, which is summarized in Table Number Sixteen.

The total responses possible were 650, which was from

fifty respondents answering thirteen questions each. There

were many comments that were made by only one or two of the

respondents which were not included in Table Sixteen.

The highest number of responses in favor of the EFTS used in Upper Arlington was forty-three. These respondents

said it was good; thirty would do it again; twenty thought

it was good to provide instant credit. Nineteen said it was a very good program; eighteen thought it was "O.K."

Negative responses were most often associated with taking too much time to use the EFTS. Seventy-six of the negative responses said it took too much time, and seventy said it was bad when the equipment did not work. There were more negative comments than positive ones in total.

In summary, the store personnel were willing to use the computer and felt that things went better as both they and the customers became better acquainted with the equip­ ment. They said it was a good program even though it could have been managed better. There was a strong re­ action by the owners and operators of the retail stores against the longer time required to use the system and equipment failures.

Usage of EFT in Upper Arlington, Ohio was reported to be less than fifteen percent of the customers. Independent 139 data from a participating supermarket as well as responses by the merchants supported the small usage of the com­ puterized credit system. Little increase was registered over the nine months of the test.

The findings of this chapter were organized around six sections which corresponded to the null hypotheses and research questions raised in Chapter One. Since a summary of the hypotheses and findings is presented in

Chapter Five, no such review is made here. CHAPTER V

SUMMARY AND CONCLUSIONS

Introduction

Chapter Five summarizes the study and its major con­

clusions. There are seven sections in the chapter. First

is a brief summary of the purposes of the research and the

research design. The next section reviews the research

hypotheses and questions and the findings. The impli­

cations and conclusions drawn from the research are pre­

sented in the third section, followed by dysfunctional

aspects of EFT. Then a section of suggested improvements

in the EFTS in section five. The sixth section discusses

the contributions of the study, and the final section con­

tains suggestions for future research.

Summary of Purpose and Design

The purpose of the study was to investigate consumer reaction to the introduction of an EFTS into several re­ tail stores simultaneously with special emphasis on the grocery supermarket. Customer acceptance, use and atti­ tudes toward bank charge cards as the interface mechanism to a computerized credit system were the areas of infor­ mation studied.

140 141

Consumers hold the keys to success in any marketing

innovations that directly affect retailing and how it is

performed. The study was designed as a longitudinal panel

study of consumers. Several types of mail questionnaires

were utilized to obtain data. Four questionnaires were

mailed to customers living within three-quarters of a mile

from the shopping center at the intersection of Reed and

Henderson Roads in Upper Arlington, Ohio. The period of

elapsed time from the first questionnaire to the fourth

was nine months. The questionnaires collected data on

customer attitudes via a series of bikert type questions

that were sent in each mailing. Also demographic data on

the respondents and actual conduct of shopping activities were collected both before and after the nine month EFTS

test. The nine months coincided with the City National

Bank test of BankAmericard credit cards used in conjunction with computer terminals in retail stores in Upper Arlington,

Ohio. A control group of seventy-five respondents living

in Worthington, Ohio was also sent the same consumer questionnaires. All questionnaires were developed specifi­ cally for the study.

A questionnaire was also administered to all of the merchants who participated in the use of computer ter­ minals. Also several trips were made into the area to define boundaries and to make observations during the operation of the test of EFT in the retail stores. 142

Response to the four consumer questionnaires was in

excess of eighty percent for each mailing, such that the

final or fourth mailing had a return of nearly sixty per­

cent of the total original consumer respondents. All

twenty-eight of the participating retail stores were con­

tacted in person by graduate students from The Ohio State

University, who administered the merchant questionnaire to

owners, managers, or key employees. One hundred percent

of the merchant participants agreed to personal interviews.

The study was exploratory in nature. Information

generated from the questionnaires was analyzed in several

ways. Frequency counts were made of all responses; cross­

tabulations were made where appropriate; the McNemar test

for significance of changes was made to determine if the

consumers had made any significant changes in their atti­

tudes toward credit cards and EFT during the study; they

had not. An extensive study of the Likert type questions

was made to determine the strength of responses given to

them. A computer program developed by Richard Kohr was

used for analysis of the Likert type questions.

The chi-squared test, and the student T test were used

to determine significance of responses where appropriate.

The .05 level of confidence was considered as the minimum

confidence level of significance that was acceptable. 143

Summary of the Research Hypotheses and Findings

A * Consumer Usage of EFTS

The first guiding hypothesis for the study was based on the marketing concept which can be read to suggest that a market offering that does not have perceived cus­ tomer advantages will not be successful.

Hi: If little or no advantage is perceived by the customers from EFT, then use of the terminals and credit cards on the computer terminals will not be widespread.

The number of respondents actually using the terminals in conjunction with their credit cards was too small in mailing number one to do any statistical analysis. The next two mailings did have enough users of the EFTS to analyze, and fourteen null hypotheses were tested. Five of them were favorable to EFT and nine were not. The average

Likert rating of all computer terminals was in the mid­ range of 2.98 to 3.00 and showed no strong feelings for credit cards and EFT; therefore, the guiding hypothesis was accepted.

B. Demographic Tests

The second guiding hypothesis was:

H2: Consumer acceptance and use of computer terminals for credit transactions at retail outlets will vary with demographic differences of the consumers.

There were significant demographic differences at the

.05 level of significance in six of the ten demographics 144 tested between users and non-users of the terminals. The six demographic characteristics where differences were

found were: 1) users had children living at home more often than non-users; 2) users were better educated; 3) users were mostly in the professional or management occu­ pations; 4) fewer wives worked either full or part-time in the user group; 5) users were all in the twenty-five to forty-nine years of age categories, which was younger than the non-users; and 6) the users had higher incomes than the non-users. The differences were all significant at the .05 level of confidence.

The four demographic characteristics where no signi­ ficant differences were found between users and non-users were: 1} length of time at present address, 2) number of times moved in the last five years, 3) home ownership, and 4) marriage status.

Additional tests also indicated that demographics did make a difference in the use of EFT facilities. Therefore, the second guiding hypothesis was accepted. The users of computerized credit cards were found to be a sub-set of all credit card users.

Use of credit cards on computer terminals was accepted by five percent of the respondents, which was not a suffi­ cient number to be considered an acceptable alternate to cash and checks as a method of payment in supermarkets. 145

C. Consumer Attitudes and Likert Tests

Consumer attitudes were clustered together in three

clusters relative to use of credit cards on computer ter­

minals. It was found that the consumer respondents did not

favor EFT. The positive clusters were found to be around

the mechanics of credit purchasing. The stores were per­

ceived by the respondents to be willing to accept the card

and did not charge higher prices. The bank did not charge

too much interest on credit card accounts, and credit cards

were easier to use in a new store than a check, as perceived

by the consumer respondents.

The negative clusters of response attitudes were

around the fear of over-using the card or over-spending because using a card was too easy. Respondents did not like to be dependent on a charge card and felt it was a poor practice to use one to make purchases in a supermarket.

They were also cognizant of the longer time required to use the computerized terminal and did not appreciate it.

Respondents indicated they still wanted to control their personal finances and distrusted automatic deposit of checks to their account and automatic payment of bills by the bank.

D. The McNemar Test

The McNemar test for the significance of changes was performed on the Likert data, and no significant change in 146

consumer response was found during the time covered by

the study.

E. Customer Use of EFT

Customer use of EFT was reported to have been minimal

but increasing slightly as time went on. Most of the dif­

ficulties in the system were reported to have been over­

come by the end of the test period.

Implications and Conclusions

Several implications can be drawn from the findings

of the study. However, since the results of the null

hypothesis tests did not all support nor all reject the

null hypotheses, the implications must be considered to be

tentative, subject to further research.

Implications which seem to the author to follow from

the results of the several research instruments used are:

Demographics:

Demographics of the consumer do make a difference in

acceptance and use of EFT. Since the users of the test EFT

terminals were younger and better-educated, widespread use of EFTS will be related to time. As the younger buyers be­ come older they will continue to use EFT, and the younger shoppers entering the consumer market will also be more receptive to the use of automated credit, computers and credit cards. Use of EFTS will grow gradually as time passes. 147

Customer Needs:

Any advance in the use of EFTS will be influenced

significantly by the ability of the system to meet and

satisfy felt needs of the consumer. This is as hypothe­

sized in the beginning of the study.

Technological Interest:

The main interest in EFTS has been from bankers and computer makers for the benefit of their business.

Bankers, credit card promoters, equipment makers, and re­ tailers must recognize that the basis upon which a suc­ cessful EFTS can or will be built is customer satisfaction and customer benefits, not simply what is good or desirable for the businesses.

Speed of Introduction:

The introduction of computer terminals to be used in conjunction with credit cards in Upper Arlington, Ohio was accomplished suddenly. The consumer did not have much time to become accustomed to the new way to pay for pur­ chases. Since there was less trouble and more acceptance and use reported by the merchants as time passed and custo­ mers became more knowledgeable, it is suggested that a gradual introduction of electronics into the banks, super­ markets and other retail outlets will be more acceptable to the consumer.

The respondents indicated distrust of a fully auto­ mated bill-paying service. The consumers distrusted their 148

own ability to use a credit system and still stay within

their own budget. It is suggested that each new component

of EFT be introduced uniquely and promoted on the basis of

the consumer advantages inherent in the use of that one

component. Do not relate the electronic cash register, for

example, to a fully computerized EFTS. The electronic cash

register can be introduced as a new cash register and then

later expanded into check and credit card verification,

and then automatic transfer of funds from customers1 ac­

counts to the store.

Marketing Educational Effort:

One of the major problems of the test of computerized

credit cards was customer and store employee information*

A massive educational effort is needed to teach both custo­ mers and store personnel the actual mechanics of how the computer works. Information and familiarity with the system will take the mystery out of EFT, and then customers will have less distrust of the system. As suggested above, each component of an EFTS should be thoroughly explained as to its own functions. Also a nation-wide promotional effort to inform the public about EFT through the media via news releases, special television documentaries, magazine section specials, and talk shows would be a low cost method of educating the total market place.

When EFTS Will Be Operational:

A final observation, from the secondary research, is 149

that it will be a long time before EFTS will be a nation­ wide functioning reality because of the intense competition

for the profits and power envisioned in the implementation of such a system. Commercial banks are concerned with the savings and loans who are aggressively expanding their base of operations. Credit unions are also in the competi­ tive picture. Retail stores will not be content to see control of this key customer service point, the cash regi­ ster and payment system, taken out of their hands. There­ fore, much litigation, governmental regulation and defini­ tion of areas of activity by the banks, savings and loans, and the retail stores is predicted. This litigation and jockeying for position will impede the progress of EFT. It will take time to work out the problems. Design of a consumer-oriented EFTS should be developed concurrently with the solutions of the problems between commercial banks, savings and loans, credit unions, and retail stores.

Implications for Management:

Many managerial implications can be drawn from the research and the data collected from the respondents.

Suggestions for management are presented under several sub­ headings :

A. Suggestions for retailers desirous of implementing an automated checkout system

B. Recommendations for financial institutions

C. Computer makers and operational characteristics Of EFTS 150

D. Significant items not supported by the findings of the study

Suggestions for Retailers:

A retail store operator contemplating the adoption of an EFTS or the improvement of an existing system should carefully consider his customers. Who are his customers, and why do they patronize the store? What are the demo­ graphic characteristics of the customers? An EFTS system may be rejected because it is a credit system rather than because it is automated.

Some of the features recommended for a retail store offering an automated credit system are:

A. Security of information: The customer does not

want his credit application nor his credit record

to be public knowledge. An acceptable system

will provide for privacy of information and pro­

tection of the customer from fishing expeditions

by the government or any other organization not

given specific written permission to look at

his credit file.

B. Item pricing: At the present time there is con­

siderable consumer resistance to elimination of

prices on each individual item, when an electronic

front-end is installed by a store. There is also

a strong interest by union workers and consumer-

ists in having each item priced. 151

A resolution was passed by the Public Policy Sub­ committee of the grocery industry's ad hoc committee on the

Universal Product Code in March 1976 urging all retailers who adopt scanning to continue item pricing. Senator Frank

Moss, Chairman of the Senate Consumer Subcommittee, was pushing legislation requiring item pricing on all items in the supermarket. It was hoped by grocery industry leaders that the resolution would prevent the Moss Bill from be­ coming law.

After a sufficient experience with scanners and UPC the public attitude may allov; for no-price marking to be introduced gradually. For the present, however, scanning must be evaluated on other benefits or savings but not on

"no-item pricing." If the Moss Bill passes, the issue will become passe.

C. The time consumed in using the computer to make

a credit card transaction was perceived as "too

long" by the customers using the system. Any

system adopted by a retailer must have a very

quick response time. Payment by cash takes

from twenty to thirty seconds. Any electronic

system must be perceived by the customer as

fast or faster than cash. Such a system will

require on-line connections at the present

time. Telephones or personal authorization

from the bank is too slow and is not perceived as a customer-oriented

system.

The customer wants a sales transaction

ticket for each purchase. Each purchase on

an electronic system should produce a cus­

tomer receipt simultaneously with the debit

to his account. The monthly statement from

the financial institution should contain a

good, clear statement of each charge against

the customer’s account. The consumer was desirous of such a statement in the survey,

and a system which lacks one will not be satis­

factory to him.

Limited liability to the customer in case the credit card is lost or stolen is an important feature of an acceptable EFTS. A retailer should not become a part of a system without a reasonable limit of liability and an efficient way to identify and repossess lost or stolen credit cards.

An effective way to protect the security of consumer credit information must be incorporated into any EFTS which will be accepted in the long- run by consumers. There are two areas of concern relative to safety currently very important to consumers. They are: 153

1. Security of information: Consumers must feel assured that unauthorized parties cannot obtain information about their credit and use of same. They also are keenly interested in protecting their credit ratings from capricious or care­ less damage.

2. Security of funds: Users of EFTS require complete integrity of amounts controlled electronically. They fear loss of assets by mistakes which leave no records or by criminal actions against their accounts.

G. When a customer is told that a retail store

accepts credit cards, it is desirable that any

major bank credit card be acceptable in the

system. It is a customer benefit and a com­

petitive factor to accept any legitimate charge

card the customer has. The ultimate EFTS should

accept several credit cards with no extra time

required.

H. The respondents requested separate checkout

lanes for credit card customers. It is felt

that the above recommendations will eliminate

the need for special checkout counters for

credit cards. The author does not believe

this is a good idea. Charge customers may

feel that they are being discriminated against

or not given equal service. Cash customers

may also feel discrimination if cash and

charge customers are separated. The merchants felt that the cash register operators were not given sufficient training at the first of the City National Bank test.

It is recommended that a very good and com­ prehensive training program be given to all checkers in advance of adopting any EFTS and that all new checkers be given similar training.

Consumers did not understand the program well in the study. It is suggested that a thorough promotional campaign be used to inform the customers. The following items should be included in the introduction and promotion of an EFTS:

1. Consumer convenience

2. Identify the advantages to the customer

3. No extra cost - same low prices

4. Limited liability

5. Promote EFT as an added service, not as a replacement for cash and/ or checks.

6. The card is good identification for cashing checks and other purposes.

7. Promote specials for charge card purchases through the banks so there is an actual money saving from using EFT. Coupons or a percentage dis­ count on a charge purchase could be used to help start the electronic credit system. This has been suc­ cessfully done by Glendale Federal Savings in Glendale, California. 155

8. Literature to hand out and special classes to explain in a truthful and straightforward way how the system works, its advantages, and the costs should be a part of the education.

K. Some provision for a back-up system in case

of machine failure should be provided so that

the customer is not inconvenienced by mechani­

cal or system failure.

L. An ombudsman or a consumer service department

to help work out difficulties that customers

are having with the system should be provided

and promoted. Such a person should be customer-

oriented and be given authority to solve the

potential customer problems promptly and

courteously.

The recommended system, as one can quickly see, is one

designed to provide customer service. If the consumer does

not perceive a benefit from the system, he will not use it,

as shown by the results of the survey. The above state­ ment is good advice to retailers, bankers, and equipment manufacturers alike. Cooperation must be very close be­

tween the retailers and the banks or the retailer will not, and should not, participate in the system. After all, the check stand and the transfer of funds from the customer to the store is at once the purpose for doing business, the most sensitive point of customer/business interface, and 156

the point of opportunity to develop a competitive edge by

showing care, interest in, and concern for customer wants and needs.

Recommendations For Financial Institutions:

Most customers at this time do not share the concern of the bankers for the avalanche of checks which threaten to bury the bank and its bookkeeping system. A business need or benefit does not automatically translate into cus­ tomer use and support barring unilateral action by the banking community. Any EFTS must have consumer benefits to entice him to use his credit card rather than write a check.

Some suggestions specifically for bankers are:

A. Security of information is very important.

The customer's credit application and credit

transaction information must be kept completely

private. He must know that his file is safe,

and that no one can get information from it

without his written consent. If is assumed

that all funds deposited in a computerized

system will be insured and safe from loss.

B. Pre-authorized payments are not well accepted

by most respondents to the survey. They felt

they lost control over their finances with

pre-authorized payments. A suggestion is

to provide the customer with a punched card

which he signs and sends in to authorize 157

payment of his bills from his account. At

first this would be a partial pre-authorization.

Many customers may wish to convert to a simpler

once-a-year card; others may not.

The type of bill which lends itself best to pre­ authorization is a rent payment or a mortgage payment, which is the same amount each month. Electric and phone bills and others which are of varying amounts each month should be included later, after the customer has learned to budget utilizing pre-authorized payments. Experience with the system will develop understanding and trust, after which extension into wider applications will be possible.

C. Having the payroll or Social Security check de­

posited directly to the bank was not accepted as

a good idea by the respondents to the survey.

Direct deposit of pay checks to the customer's

account is a service with benefits for the cus­

tomer; therefore, it is postulated that it can

be successfully promoted if the consumer ad­

vantages are promoted. Diffusion of direct

deposit will probably follow the Rogers'

Diffusion of Innovation Model. It is suggested

that the customer be notified when his check

has arrived and has been credited to his

account each month as the deposit is made.

A plan to guarantee the arrival or use of a 158

Social Security check on the first of the

month is also a good idea and is supported

by this author.

D. The concept of the debit card, NOW accounts,

and payment of interest-on-demand deposits is

an idea based upon customer benefits and will

probably grow larger as time passes. Again,

the Rogers' Diffusion of Innovation Model

probably can be used to predict the penetration

of the use of some form of an interest-bearing

demand account. Commercial banks face a

serious challenge to traditional markets and

services which have been almost exclusively

their own from the NOV/ account concept. It is

recommended that they respond as rapidly as

possible to the challenge to their established

way of doing business by offering and promoting

vigorously a similar customer service.

The law will probably have to be changed for banks to be able to pay interest-on-demand deposits. However, it is a real benefit to customers and should be pursued with all deliberate speed in order to develop new business and also to protect existing customers from erosion by the savings and loan associations.

The savings and loans should promote heavily in this area because it represents an exciting opportunity to 159

expand the services offered to their customers. Also many

new customers are obtainable by offering interest-on-demand

deposits. Customer service and benefit is the key to de­

veloping new business. Profits can be obtained from a

service which offers real benefits to customers. However,

the benefits and customer services should be planned and

developed first, A profitable way to offer them to the

customer can be integrated into the picture when customers

use services. No profit is possible from an offering that

is not used by consumers,

E. A challenge is presented to the financial

community to develop an automated system of

funds transfer that will accept several dif­

ferent credit cards. Since retail stores and

the buying public do not want to have separate

systems for different credit cards, it is

important that the technicians produce some

system that is compatible for several credit

card s.

Bank executives and possibly the Federal Reserve Board are the key decision-makers who can, if they will, provide the support necessary for an integrated system.

Possibly compatibility can be accomplished through the automated clearing house, ACH. There is a real challenge here to the financial leaders to think in terms of customer service and the wants and needs of the market place. 160

Acceptance and use of EFT will be greatly expanded and adopted sooner if market-oriented thinking is integrated into the drive for EFTS.

F* Limited liability of the credit card holder

in case of unauthorized use of the card is

a feature consumers want. Insurance can be

provided to cover the risks involved in im­

plementation of limited liability and should

be done.

G. Bankers, retailers, and equipment manufacturers

should cooperate in providing adequate training

for all business personnel working in the

electronic funds area. Also customers need to

be fully informed and knowledgeable as to the

benefits and the mechanics of the system. A

cooperative effort will keep the costs to

a minimum.

H. The consumer ombudsman idea, as recommended

above for retailers, is a good idea for bankers

also. Much customer ill-will and resentment

leading to loss of business and customers can

be eliminated by prompt and fair handling of

customer complaints. A bank which demonstrates

that it really cares about customers and their

problems will have a decided competitive edge.

However, it must be a real customer interest. 161

not just a public relations or promotional

gimmick. The ombudsman armed with real power

and real customer interest will be a big asset

in introducing an EFTS to the market place.

I. Banks should adopt a credit card statement

form which tells the consumer what each charge

was for. It may not be convenient, but it is

important in terms of customer satisfaction to

do so.

J. It is recommended that the bankers develop a

good relationship with all retailers who now

have their own credit card plan. Some of them

are not making money and some are losing money

on their own credit card activities.

Assuming the banks were willing to cooperate with the retailers in satisfaction of the specific needs of the store and assuming further that the bank credit card plan was consumer-benefit-oriented as described above, it is pre­ dicted that some of the retailers would be willing to give up their own credit card plan in favor of a bank credit card. Another possibility might be that a bank could take over the funding and management of the credit card busi­ ness of the retail stores.

Suggested Operational Characteristics:

Computer makers have been aggressive in promotion of business applications for their products. They have also 162 been willing to custom design the capabilities needed for each industry and, in many cases, each customer. The com­ puter industry must continue to respond to the needs of the consumer as they become known.

The suggestions listed above for retailers and bankers provide the basic capabilities needed by the EFTS computer.

Designing the capability is important to success of com­ puterized funds transfer.

Re-listing the features needed by the computer at this point is not necessary. What is needed is encourage­ ment to the computer firms and their design specialists to think in terms of the consumer who will be served by the machine. Do not design a system where the customer must be forced to conform to the capabilities of the machine; rather, develop the computer, its features and capabilities so that the wants and needs of the customer are provided for. Bring the machine into conformity with the consumer wants and interests. The capabilities must be provided at a cost which will be supported by the market place. The costs must not be so high that the user of the computerized

EFTS is penalized by being forced to charge higher than competitive prices to support the cost of the EFTS.

Ideas Not Supported By the Study

The results of the study confirmed the first hypo­ thesis that most consumers would not accept nor use 163 computerized credit cards if they did not perceive there were benefits from using the system. The respondents further said that EFT as presented to them was not an ac­ ceptable alternative to the present system of cash and checks. Several points can be made from what was not shown by the study.

A. The respondents reported a lack of confidence

in themselves and their ability to use a credit

card without overspending or purchasing items

not needed.

B. Credit cards were perceived as being too easy

to obtain. It is to the advantage of the bank

as well as the card holder to do a good job

of qualifying credit card applicants before

the card is actually issued.

C. Customers and store employees alike were not

well-informed about the EFTS used in the test.

The time of application is also an ideal

time to provide literature and training in

the use of credit cards. A class for new

credit card holders offered as a free service

would pay off in better consumer relations

and informed customers. Much of the material

could be presented in a film. This film

could also be taken to college campuses and 164

shown to high school seniors as well as

night classes for adult education.

A large effort by all businesses who use consumer credit in addition to all financial institutions could benefit from widespread education in electronic credit and how to best utilize it. Judging from the responses to the survey, electronic funds transfer is still in the growth stage in its life cycle.

D. The method of introduction of electronic credit

where the customer is plunged into the com­

puterized credit card purchasing environment

without preparation or warning is not the way

to introduce EFTS. Much distrust of electronic

money was found in the survey. It is felt the

Rogers’ Diffusion of Innovation Model, which

has been assumed as applicable in the intro­

duction of EFTS, does not apply because there

does not now exist a complete EFTS for the

consumer to adopt. Only parts of a system

and several test installations have been avail­

able to consumers. It took about two generations

for checks to be widely accepted and used by the

buying public. There is reason to believe that

it will take a long time for EFTS to replace

checks and cash. 165

The recommendation is made to introduce parts of the

system naturally, without any big announcement of an EFTS or the relationship of each component to a total system of electronic money. The electronic cash register, for example, has many more capabilities than are being currently used. After the customer becomes accustomed to the elec­ tronic cash register, it can be extended to accepting a credit card, or add price-reading capability to use the

UPC and scanners, then direct electronic funds transfer.

Businesses can develop and use electronic money be­ tween themselves. This will provide hands-on experience and an opportunity to ge the "bugs" out of the system be­ fore it is extended to consumers. Customers do not care how supplies are ordered, inventory maintained, or what arrangements a retailer has with his bank unless he, the customer, is directly affected.

If businesses do begin to utilize electronics as a part of their operations, their employees will become familiar with it and develop a trust in it and will then be much more willing to accept an EFTS in their own finan­ cial life.

After several parts of the system are in place and working and have customer understanding and use, they can then be put together as a limited EFT that will be accepted by consumers. 166

The Rogers' Model does not apply to EFTS because the

system is not one single, identifiable innovation and be­

cause it is not in existence today to be offered as a new,

working innovation.

E. A final item to be noted is that there was

little or no increase in the use of the com­

puterized credit card at the supermarket

during the entire nine months of the test.

Problems with the system were reduced as store clerk

and customer learned how it operated. Understanding of the

system improved from beginning to end of the test but,

significantly, usage did not increase.

Dysfunctional Aspects of the EFTS For Consideration

Consumer respondents were not asked for a statement of

the dysfunctional aspects of using charge cards on the re­

tail computer terminals. However, it was evident from the negative tone of most of the written responses to the open- ended invitation in the last mailing that from the con­ sumers' view there were some problems.^

The dysfunctional aspects of the EFT system tested by

City National Bank in Upper Arlington, Ohio can be cate­ gorized in three major areas: 1) Time: use of the com­ puter terminals took more time, and users as well as the customers in line behind them did not appreciate it;

^See Table Fifty-nine, Appendix K. 167

2) Expense: the respondents were not willing to pay more

for the ability to charge their purchases; and 3) Security

of control: responses to many of the Likert type questions

reflected a distrust of a computerized credit system. Con­

sumer respondents felt that the Government, Computer World

was hard to deal with, had too much knowledge already, and

that loss of control of their own finances would result

from a fully-implemented EFTS.

The merchants who actually operated the automated ter­

minals also reported several dysfunctional characteristics 2 of the EFT system they worked with. The report by the merchants agreed with the feelings of the consumers.

Dysfunctional aspects as reported by the merchants

can be condensed to four major areas: 1) Time: the mer­ chants reported it too more time to use the computer

terminals and to check out at night. Neither the merchant nor his customer appreciated slower service and/or waiting longer in line. 2) Equipment: there were several prob­ lems with the computer hardware and the system used. Mal­ function, breakdowns and slow response by the authorizing personnel were cited as problems by the merchant respon­ dents. 3) Expense: time is money, and the merchants were concerned with the need for more checkout stations

2 See Tables Numbered Thirty-two, Thirty-three, Thirty- four, Thirty-five, Thirty-six for a complete listing of problems with the computer terminals used in conjunction with credit cards as reported by the merchant respondents. 168 or personnel and the increased training the computer ter­ minals required. 4) Bad customer relations: the mer­ chants perceived that their customers did not like the

longer waiting time caused by other customers' use of automated credit cards. Some customers were reported to have become angry or embarrassed by the system, and a few

lost customers were reported.

Suggested Improvements in the EFTS From the Respondents

Several recommendations for improvements in the auto­ mated credit card system were given by the consumer respon­ dents. Credit cards were considered to be too easy to get.

A suggestion was made that there be more selectivity in issuing credit cards so that they would be more difficult to obtain. Another suggestion made by consumers was a simple and effective method of keeping track of all credit card purchases.

The merchants had some additional thoughts as to how the EFTS could be improved. They were: 1) A five dollar minimum on a charge card purchase should be made. 2) Com­ bine the computer function and the receipt-making function into one operation. 3) Make the bank reconciliation at night easier and faster. 4) Increase the training given to store personnel. 5) Accept all credit cards in the system, not just BankAmericard. 6 ) Insure that all credit cards have magnetic coding on the back. 1) Get the "bugs" 169 out of the system so that it works the way it should.

8) Provide a better and quicker back-up system in case of breakdown. 9) Give each merchant a unique account number.

10) Eliminate dialing a phone for confirmation of an account.

The improvements that were recommended were aimed at a solution of the problems experienced in using the system.

Time and additional use coupled with normal evolutionary improvements would solve most of the problems. Most of the suggested improvements were evolutionary in nature. A few did strike at the basic concept of EFT. For example, one objection stated that credit cards are too readily avail­ able. Credit cards must be widely held and users must be knowledgeable as to their use and willing to use automated facilities in order for EFTS to fulfill the role envisioned by many of its proponents.

Contributions of the Study

Besides the contributions to interested businessmen found in the above discussion, six specific points can be drawn from the data:

A. There was not a strong, or well-defined,

consumer demand for credit at the super­

market. There was little or no demand

for EFT exhibited in consumer attitude

responses nor in their usage of the com­

puter consoles. Consumer respondents reported they were

not in favor of the computerized charge

card system of paying for convenience

goods. They preferred to pay with cash

and/or checks.

The retailers were found to be aware of

the reluctance of their customers to use

EFT as it was presented to them in the

Upper Arlington test. However, the merchants

were still favorable to the use of computers

in conjunction with bank credit cards and

indicated a willingness to support a similar or improved EFTS in the future.

The study identified the market segment that did accept electronic credit by demographic characteristics. When a bank or a retail store is determining whether or not to enter electronic credit— a knowledge of the con­ sumers most likely to accept it will be of value in making a correct decision. The segment that did accept credit cards and computers can be located in other communi­ ties and electronic credit can be offered to them first, when a business desired to introduce EFT. 171

E* Consumers were found to act in a way con­

sistent with their expressed attitudes. The

respondents were mostly not in favor of bank

charge cards as used on computer terminals.

They also did not use the computer terminals

extensively.

F. Most of the problems identified by both the

consumer respondents and the merchants were

about operational aspects of the EFTS used.

Once these problems are solved and it be­

comes advantageous to the customer to use

the system, the customer will be more re­

ceptive to EFT. However, there existed a

large feeling that charging of daily

necessities such as groceries was not a

good budget practice.

Some Suggestions for Future Research

Exploratory studies normally generate ideas for addi­ tional research. The present study is not an exception.

Following is a list of areas where research could be done in the future to help understand the consumer and his wants, needs, and interests in EFT.

A. A similar study to the present one could be

made, after five or ten years, to see if

there will be significant changes in consumer perception of EFT and the

benefits derived therefrom.

Additional studies are suggested in

different geographical areas of the

country and with different demographic

segments of the market to determine if

the findings of the present study are

generalizable to other market segments.

A study could be made as to the effects

of inflation and the reduction of dis­

cretionary income on the use of credit

cards and/or EFT.

A study of cause and effect between

customer attitudes and use of EFT would

be valuable to marketers and businessmen.

An additional follow-up study is needed to determine if the younger respondents who are

now heavy users of charge cards will continue

to use them as they grow older.

Future research should be made to determine if the use of EFT is related to consumer family 1 ife-cycle and if so, how.

A study is needed in the future to separate the two variables that were inter-related in this study. One study is needed to determine if the respondents were simply 172

consumer perception of EFT and the

benefits derived therefrom.

B. Additional studies are suggested in

different geographical areas of the

country and with different demographic

segments of the market to determine if

the findings of the present study are

generalizable to other market segments.

C. A study could be made as to the effects

of inflation and the reduction of dis­

cretionary income on the use of credit

cards and/or EFT.

D. A study of cause and effect between

customer attitudes and use of EFT would

be valuable to marketers and businessmen.

E. An additional follow-up study is needed to

determine if the younger respondents who are

now heavy users of charge cards will continue

to use them as they grow older.

F. Future research should be made to determine

if the use of EFT is related to consumer

family life-cycle and if so, how.

G. A study is needed in the future to separate

the two variables that were inter-related

in this study. One study is needed to

determine if the respondents were simply 173

rejecting the technology of EFT offered

to them in upper Arlington.

H. Another study is needed to determine if

consumers will reject EFT as a system

without any complicating inter-relationships

from the technology,

I . A longitudinal study of the adoption of

electronic credit should be made following

the Rogers' Adoption of Innovation concept.

Will EFT simply diffuse through the popu­

lation in a similar pattern to a new product? APPENDIX A

DATA COLLECTION INSTRUMENTS

174 175

THE FIRST QUESTIONNAIRE

THE OHIO STATE UNIVERSITY Marketing Department 1775 S. College Road Columbus, Ohio 43210 422-0331

October 7, 1971

Dear Homemaker:

As you know from our phone conversation of a few days ago, I am a student of The Ohio State University studying shoppers' attitudes toward credit cards. The economy is greatly influenced by credit cards as are many family bud­ gets— this is a significant survey that you are an impor­ tant part of.

The study information will be collected through the use of a short mail questionnaire. The first one is en­ closed in this letter; the others will be sent to you in November 1971, March 1972 and June 1972. Each question­ naire will take only a few minutes of your time to com­ plete. We think you will find the questionnaire interes­ ting.

I would appreciate very much your filling out and returning the questionnaire as soon as possible. Since I am sending the questionnaire to only a select group of consumers, each one is very important.

Once again I want to thank you and assure you that your help and cooperation in this study is most appreciated by the University, by Professor LaLonde, and by myself. Let me remind you that your response will be completely confidential; in fact, as you will notice, your name is not even requested on the questionnaire. Thank you again for your interest. I am looking forward to receiving your opinion about the bank credit cards.

Very truly yours.

Bernard J. LaLonde Dorothy Jensen Professor of Marketing Research Associate

DJ/npw 176

THE OHIO STATE UNIVERSITY

CREDIT ATTITUDE SURVEY

The following pages contain several questions con­ cerning your feelings and habits when using bank credit cards; also some questions about supermarkets. PLEASE READ EACH OUESTION CAREFULLY.

Please answer each question carefully to the best of your ability. There are no right or wrong answers. Your assistance is greatly appreciated. Your answers will be held in strict confidence.

Please answer every question completely and return it to me in the stamped, self-addressed envelope I have en­ closed for that purpose.

Thank you!

1. On your last shopping trip to the supermarket, did you take someone with you?

/ / Yes / / No / / Don't remember

2. If yes, who? ______

3. Would you please estimate how you divide up your super­ market expenditures between the different supermarkets you shopped.

Total Weekly Number of Trips Supermarket Expenditure in Past 7 Days

Total 100%

4. What would you estimate your overall weekly food bill is in dollars? 177

/ / under $10 / / $30-$40 / / $10-$20 / / over $40 / / $20-$30 / / other (specify)_ _ _

5. On your last major shopping trip to the supermarket, did you make any other stops or purchases other than at the supermarket? (For example, at a drug store.)

/ / Yes / / No / / No Opinion

6 . If "yes," what else was purchased?

7. What is the closest supermarket to your home?

// Big Bear // Super Duper // A & P // Big Star // Kroger // Ontario / / Albers // Tarpy1s // Gold Circle / / Other (specify) // A Mart

8 . Do you or any member of your family presently save any type of trading stamps?

/ / Yes / / No / / Don't Know

9. If "yes,” please indicate:

Number of Filled Kind of Stamps Books You Now Have

/ / S & H Green books / / Top Value books / / Plaid books / / Buckeye books / / Other (specify) books

you usually cash personal checks to obtain cash for miscellaneous or household expenses?

/ / Yes / / No / / Other 178

11. If "yes," where do you cash most of them?

/ / Drug store / / Service station / / Bank / / Variety store / / Supermarket / / Other (specify)

12. On your last major shopping trip to the supermarket, how did you pay for your purchase?

/ / Cash / / Other (specify) / / Check / / Bank Charge Card (BankAmericard or / / Don't remember Master Charge)

13. During the last 30 days, please estimate the number of times you paid for your supermarket purchase in the following way:

______Cash ______Check ______Bank Charge Card (Master Charge or BankAmericard) ______Other ______Don' t Icnow

14. Which supermarkets in this area accept Bank Charge Cards? (BankAmericard or Master Charge)

15. Which of the following credit cards do you or any member of your family have?

Times Used Primary User Card last 30 days Husband Wife Both

/ / BankAmericard / / Master Charge / / Shoppers Charge / / Sohio / / Marathon / / Shell / / Gulf 179

Times Used Primary User _____ Card______Last 30 Days Husband Wife Both

/ / Sunoco / / Humble _ _ _ Z _ Z Z Z Z Z / / Penney ’ s______Z Z / / Sears Z _ Z _ _ ___ / / Lazarus______“ _ ___ / / Carte Blanche ___Z_ ___ / / American Express______‘ / / Other ______Z _ __ _

16. Which items below did you pay for with a credit card in the last 30 days?

// Gasoline // Drug Store purchase // Restaurant // Supermarket purchase // Clothing or shoes // Hardware store // Books // Beauty shop // Taxes // Other 180

a>

// // // // / / 1. Stores that acceptbank charge cards (Master Charge or BankAmericard) charge higher prices than those who don * t.

// // // // / / 2. Checks are becoming very difficult to cash unless you are known by the store per­ sonnel .

// // // // // 3. Sometimes the monthly bill from the bank is difficult to pay.

// // // // // 4. Everyone uses a bank charge card; it's the modern way.

// // // // // 5. People spend too much money with the new bank credit cards because they are too easy to use.

/ / / / / / / / / / 6 . Most people would stop pat­ ronizing a store if they re­ fused to cash their personal check.

// // // // // 7. Money is a nuisance and is too eacy to lose.

// // // // // 8 . The bank is more likely to make a mistake with a credit card than with a personal check.

// // // // // 9. It is a poor budgeting prac­ tice to charge supermarket purchases on a bank charge card. 181

0) 0) . , r-t O H CP -H ^ a> c a) o d» c o o

// // / / // / / 10. When people in front of me in the checkout line pay with a credit card, it takes more time.

/ / // / / // // 11. Most people would stop patro­ nizing a store if they re­ fused to accept their bank charge card.

/ / // / / // // 12. If people could charge almost everything they needed, it would be worth a few cents more per order.

/ / // // // // 13. Most people would like to be able to make purchases at the supermarket on a bank charge card.

/ / / / / / / / / / 14. Most people find credit cards help them balance their bud­ get.

// // // // // 15. Most people would take tra­ ding stamps in preference to being able to charge their purchases at a supermarket.

/ / / / / / / / / / 16. People are more apt to be overcharged when paying with a bank charge card than with a check.

/ / / / / / / / / / 17. People buy things that they do not need because they can charge it and pay later. 162

i » r H •a oj H O' u O' c a) o O' c 0 a) a) It) 0 u u TS tn u +J O' c ■H 0 1 < a VI

' / / / / / / / / / 18. Most stores act like they do not want people to use a bank charge card...they act like they are doing people a big favor to accept a bank charge card.

/ / / / / / / / / / 19. It would be nice to be able to charge all purchases and not have to keep track of a check book or carry cash.

/ / / / / / / / / / 20. People would over spend in a system without cash or checks, but only credit cards.

/ / / / / / / / / / 21. There are too many credit cards to carry.

/ / / / / / / / / / 22. Most people use a bank charge card at the supermarket any time they are short of cash. / / / / / / / / / / 23. Our society is already using too many machines and is too regimented by computers.

////////// 24. It is a good idea to have the paycheck deposited directly to the bank account by the employer.

////////// 25. Once you get started on a bank charge card, you can never quit because it takes too much money to catch up. 183

o i .-1 at i-l O' ■H u O' G

/ / / / / / / / / / 26. It is a good idea to receive an automatic loan from the bank in case of a checking account overdraft.

/ / / / / / // / / 27. it is a lot faster to pay cash and skip all that fuss with a bank charge card.

// / / // / / / / 28. People prefer to carry cash to pay their bills.

// / / // // / / 29. It is a good idea to have the utility bills paid auto­ matically from your checking account.

/ / / / / / // // 30. People would lose control over their personal financial matters under a no-cash, no­ checks system.

// // // // // 31. Parents should give their teenage children experience in using a bank charge card.

// / / // / / // 32. They should have separate checkout lanes for credit card customers.

/ / / / / / / / / / 33. It is a good idea to have all bills paid automatically by the bank from your checking account.

// // // // // 34. With automatic payment of bills by the bank, people would not be able to pay who they wanted when they wanted to pay them. 184

Q> 01 U 1 i rH fQ 0) *H O' •HMD' c a) u O' c O 0) (U Rl o u m -a tn m JJ O' C -H 4J in C d a tn

/ / / / / / / / / / 35. The bank charges too much interest on a charge card account.

/ / / / / / / / / / 36. Most people like the idea of using the bank money for a month free when they use a bank charge card.

// // // // // 37. Most people would prefer can­ celled checks as proof of payment rather than a monthly statement of amount paid each firm by the bank.

// / / // // // 38. With automatic payment of bills by the bank/ it would be impossible to refuse to pay a disputed bill.

/ / / / / / / / // 39. The Business/ Government, Computer World knows too much about my personal things al­ ready .

// // // / / // 40. Using a bank charge card is much easier than trying to cash a check in a new store.

/ / / / // / / // 41. The only ones to benefit from credit cards are the banks.

/ / / / / / / / / / 42. It is too easy to get credit cards. / 44. / / / / / / / / / / Strongly Agree w Q < / / / / / / / U )(tf d) O' O 1 V)

185

186

THE SECOND QUESTIONNAIRE

THE OHIO STATE UNIVERSITY Marketing Department 1775 S. College Road Columbus, Ohio 43210 4 2 2 - 0 3 3 1

December 6, 1971

Dear Homemaker:

I want to thank you for filling out and returning the first Questionnaire. The response wa s really great. As you know, I am a graduate student at Ohio State University and T am conducting a survey of shoppers attitudes toward credit cards. This study is being accomplished by using short mail questionnaires. The second one is enclosed with this letter; the others will be sent to you in February and May of 1972. Each one will take only a few minutes of your time to fill out. Along with each one, you will receive a self-addressed, stamped envelope for your convenience.

I will appreciate very much your filling out and re­ turning this questionnaire as soon as possible. Each one is important for nc to receive back because I am sending them to only a select group of women. Please answer all questions the best you can. Even if you do not think your experience or lack of it qualifies you to help in this sur­ vey, please remember a representative sample must include all kinds of people and so your opinion is valuable to me.

Let me assure you aqain that your response will be kept completely confidential. The number you see on the return address envelope is to allow me to divide the re­ sponses received into groups and then classify each group as to shopping habits and attitudes. I am interested in the changes that occur within each group which, therefore, makes it necessary for me to distribute the subsequent re­ sponses I receive into the same groups that I distributed the initial responses. No one cither at the University or elsewhere will see any individual's name on any question­ naire or be able to relate a specific nano to an individual questionnaire.

Thank you very much for your help and interest in this important study. Your help is appreciated by the Univer­ sity, by Dr. LaLonde, and by myself.

Very truly yours.

Dr. Dernard J. LaLonde Dorothy densen Professor of Marketing Research Associate 187 a > t r—i T) a 1—1 Ouestionnaire: t n u cn G QJ o cn c 0 G> o «o o u u TJ w cn d +J w < D Q w

/ / / / / / / / / 45. People like to use a bank charge card to pay for super­ market purchases because it leaves them more money for other things.

// / / // // // 46. A new direct line to the bank would be more accurate than the old system of charging.

/ / / / / / / / / / 47. People tend to purchase better qualities or higher- priced items at the super­ market on the trips when they know they are going to use a bank charge card to pay for their purchase.

// // // // // 48. They should provide a book to keep track of all the bank credit card purchases made each month.

// / / // // / / 49. Most people tend to stock up on specials and buy larger orders at the supermarket when they know they are going to use their bank charge card to pay it. 188

THE OHIO STATE UNIVERSITY

CREDIT ATTITUDE SURVEY

Tho following pages contain several questions about you and your attitudes. This information will help to determine if all kinds of attitudes and all types of people have been included in the survey. When grouped with all other returns your answers lose their identity, but aver­ ages are highly useful.

Please read each question carefully and answer all of then to the best of your ability. If you've answered some of these questions before, please answer them again. What is desired is your opinion at this time.

A self-addressed, stamped envelope has been enclosed for your convenience in returnino the survey to Dr. LaLonde.

Thank you for your cooperation!

C 2 Are there any children living at home?

1. / / Yes 2. / / No

C 3-4 If "yes," what are their ages?

C 5 How long have you lived at your present address?

1 . / /less than one year 5. / / 4-5 years 2 . / / 1-2 years 6 . / / over 5 years 3. / / 2-3 years 7. / / other 4. / / 3-4 years

C 6 How many times have you moved in the last five years?

1 . / / zero 6 . / / 5 times 2 . / / once 7. / / 6 times 3. / / twice 8 . / / over 6 times 4. / / 3 times 9. / / other 5. / / 4 times

C 7 At your present address are you:

1 . / / renting or leasing 3. / / own out-right 2 . / / buying 4. / / other 189

C 8-9 Please list any clubs or organizations you belong to and indicate how active you are in them.

C 10 Organization Active member Not active

// //

// //

// //

// //

// // Cll What is the last year of school completed by the head of the house?

1. / / some grade school 3. / / some post­ 2. / / high school graduate graduate work 3. / / some college or 6. / / Master's degree technical school 7. / / Ph. D. degree 4. / / college graduate 8. / / Other

C12 What is your marital status?

1. / / sinnle 3. / / divorced 2. / / married 4. / / widow or widower

C13 At which banks do you have checking accounts?

1. / / Ohio National 4. / / Ohio State Bank 2. / / The Huntington 5. / / other ______3. / / City National 6 . / / other ______

C14 What is the occupation ofthe head of the house?

(Specify) ______

C15 Does the lady of the house work outside the home for pay?

1. / / Yes 2. / / No 3. / / No opinion

Cl6 If "yes," does she work:

1 . / / part-time 2 . / / full-time 190

C17 What does she do?

(specify) ______

Cl 8 How many cars does your family own?

(specify) ______

C19 Have you used your bank charge card in the new com­ puterized system now in use in a few test stores in Upper Arlington?

1. / / Yes 3. / / Don't know 2. / / No 4. / / other (specify) ______

C20- 40 If "yes," in what stores have you used the new com­ puterized terminal for recording your BankAmericard purchase?

Approximate number Store of times used

C41 Please indicate the age range within which the head of the house is now.

1. / / under 24 5. / / 65 and over 2. / / 25-34 6 . / / no opinion 3. / / 35-49 4. / / 50-64

C4 2 Please indicate the income CATEGORY that best des­ cribes your family's total income per year.

1. / / under $5,000 4. / / $15,001-$25,000 2. / / $5,Q01-$10,000 5. / / over $25,000 3. / / $10,001-$15,000 6 . / / no opinion

THANK YOU VERY MUCH FOR YOUR COOPERATION: 191

THE THIRD QUESTIONNAIRE

THE OHIO STATE UNIVERSITY Marketing Department 1775 S. College Road Columbus, Ohio 43210 4 2 2 - 0 3 3 1

April 24, 1972

I want to thank you for filling out and returning the pre­ vious questionnaire. Your response was encouraging. As you know, I am a graduate student at Ohio State University and I am conducting a survey of shoppers' attitudes toward credit cards. This study is being accomplished by using short mail question­ naires, The third one is enclosed with this letter; the last one will be sent to you in Juno 1972. They will tako only a few minu­ tes of your time to fill out. Along with each one, you will re­ ceive a self-addressed, stamped envelope for your convenience.

I will appreciate very much your filling out and returning this questionnaire as soon as possible. Each one is important for me to receive back because I am sending them to only a select group of women. Please answer all questions the hest you can. Even if you do not think your experience qualifies you to help in this survey, please remember a representative sample must include all kinds of people and so your opinion is valuable to me.

Let me assiire you again that your response will be kept completely confidential. The number you see on the return address envelope is to allow mo to divide the responses received into groups and then classify each group as to shopping habits and attitudes. I am interested in the changes that occur within each group which, therefore, makes it necessary for me to distri­ bute the subsequent responses I receive into the same groups that I distributed the initial responses. No one either at the Univer­ sity or elsewhere will see any individual's name on any question­ naire or bo able to relate a specific name to an individual questionnaire.

Thank you very much for your help and interest in this important study. Your help is appreciated by the University, by Dr. LaLonde, and by myself.

Very truly yours,

Dorothy Jensen Research Associate

Dr. Bernard j. LaLonde Professor of Marketing Enclosure 192

THE OHIO STATE UNIVERSITY

THIRD QUESTIONNAIRE

The following pages contain several questions about you and your attitudes. This information will help to determine if all kinds of attitudes and all types of people have been included in the survey. When grouped with all other returns, your answers lose their identity, but aver­ ages are highly useful.

Please read each question carefully and answer all of them to the best of your ability. If you've answered some of these questions before, please answer them again. What is desired is your opinion at this time.

A self-addressed, stamped envelope has been enclosed for your convenience in returning the survey to Dr. LaLonde.

Thank you for your cooperation!

Have you used your BankAmericard during the last 30 days in one of the stores with the new computerized ter­ minal to record your purchases?

/ / Yes / / No

If "yes," which store:

store number of times used last 3 0 days 193

0) at M ai O' Please check one of the boxes c +i Ul S' D a tn

////////// 50. I would like to have the automated BankAmericard ter­ minals like the ones in use in Upper Arlington available to serve charge card custo­ mers in all stores that accept my BankAmericard.

/ / / / / / / / 51. The automated terminals to / / process the BankAmericard in many different retail stores have been a good thing for the customer.

////////// 52. The fact that a supermarket now accepts BankAmericard is a good thing for its custo­ mers.

////////// 53. It takes longer to go through the check stand when they use the automated terminals to accept a bank charge card. 194

THE FOURTH QUESTIONNAIRE

THE OHIO STATE UNIVERSITY Marketing Department 1775 S. College Hoad Columbusr Ohio 43210 4 2 2 - 0 3 3 1

July 17, 1972

I want to thank you for filling out and returning the pre­ vious questionnaire. Your response was encouraging. As you know, 1 am a graduate student at Ohio State University and I am conducting a survey of shoppers' attitudes toward credit cards. This study is being accomplished by using short mail question­ naires. The last one is enclosed with this letter; it will take only a few minutes of your time to fill < it. As you see, a self- addressed, stamped envelope is enclosed for your convenience in returning this questionnaire.

I will appreciate very much your filling out and returning the questionnaire as soon as possible. Each one is important for me to receive back because I am sending them to only a select group of women. Please answer all questions the best you can. Even if you do not think your experience aualifies you to help in this survey, please remember a representative sample must in­ clude all kinds of people and so your opinion is valuable to me.

Let me assure you again that your response will be kept completely confidential. The number you see on the return add­ ress envelope is to allow mo to divide the responses received into groups and then classify each group as to shopping habits and attitudes. I am interested in the changes that occur within each group which, therefore, makes it necessary for me to dis­ tribute the subsequent responses I receive into the same groups that I distributed the initial responses. No one, either at the University or elsewhere, will see any individual's name on any questionnaire or be able to relate a specific name to an in­ dividual questionnaire.

Thank you very much for your help and interest in this important study. Your help is appreciated by the University, by Dr. LaLonde, and by myself.

Very truly yours,

Dorothy Jensen Research Associate

Dr. Bernard J. LaLonde Professor of Marketing

Enclosure 195

THE UNIQUE QUESTION INCLUDED IN THE FOURTH QUESTIONNAIRE

The open-ended request for information included in

the Fourth Questionnaire:

Your comments on this study are encouraged. In the space below please indicate your feelings about computer terminals in the stores you shop. What would you think if all stores had these terminals and accepted your charge card? Please add another sheet if more space is needed or use the back of this page. Thank youi 196

MERCHANTS' QUESTIONNAIRE

CNB - BANKAMERICARD STUDY:

PART A

1. Most consumers seemed to be aware of the CNB Bank­ Americard Program.

SA A NO D SD

2. The program resulted in developing new customers for my business.

SA A NO D SD

3. Customers waiting in line behind a customer using the console device seemed irritated by the delay.

SA A NO D SD

4. I encouraged my customers to use the console device whenever possible.

BA A NO D SD

5. My employees or fellow employees were reluctant to use the console device all through the test period.

SA A NO D SD

6 . The console device significantly increased the speed with which we were able to serve our customers.

SA A NO D SD

7. The CNB BankAmericard Program is a good idea.

SA A NO D SD

8 . Most consumers seemed to understand the mechanics of how the program worked,

SA A NO D SD

9. The program was more trouble than it was worth.

SA A NO D SD 197 MERCHANTS' QUESTIONNAIRE Continued

1 0 . I neither encouraged nor discouraged my customers from using the console device.

SA A NO D SD

11. My employees or fellow employees were reluctant to use the console device at the beginning of the test.

SA A NO D SD

12. The CNB BankAmericard Program was a good idea but poorly planned and implemented.

SA A NO D SD

PART B

1. The biggest problem with the program was...______

2. Relative to the program, most of my customers thought

3. The major disadvantage of the program to the customer was...

4. The best part of the program was...

5. The biggest problem with operating the console device w a s ... 198

MERCHANTS’ QUESTIONNAIRE Continued

6 . The major advantage of the program to the customer was...

7. The consumer advertising program sponsored by CNB- BankAmericard was...

8 . The orientation and training given to the merchants by CNB and BankAmericard was...

9. The major disadvantage of the program to the merchant w a s ...

10. If I had another opportunity to participate in the same type of test, I would...

11. The major advantage of the program to the merchant was...

12. If I had a choice, I would change the program by. 199

MERCHANTS’ QUESTIONNAIRE Continued

PART C

I am going to ask you for some estimates regarding the program. I know they will not be exact, but all we want are your best estimates.

At the start At the End of the Test of the Test

What percent of your customers were aware of the program?

What percent of your customers understood the mechanics of the program?

What percent of your customers used the program?

Out of 100 percent, what percent of custo­ mers would you estimate were frequent users of the program (more than ten times)?

As a percent of total times used--what per­ cent of transactions did you start using the console and then switch to some other means of completing the transaction?

Out of 100 percent of the times the device was used— what per­ cent of the times would you estimate there was a mal­ function in the system?

I 200

MERCHANTS' QUESTIONNAIRE Continued

At the start At the End of the Test of the Test

7. Out of 10 0 percent of the times the device was used— what percent of the times would you estimate there was an unreasonably long de­ lay in utilizing the device to complete the transaction?

8 . Do you have any general comments on the program which would help us to evaluate its effectiveness?

9. Were you \7orking here during the entire period of the test? (October 1971 - June 1972).

If “No," what period

10. How many times would you estimate that you have per­ sonally used the console device for a customer trans­ action during the last thirty days? _ _ _ _ times.

11. Location ______

Time: In: Out:

Owner _____ Mgr. Emp.

Interviewer Date APPENDIX B

TABLES, SHOPPING ACTIVITY

201 TABLE 17 202

FREQUENCY COUNT OF SHOPPING ACTIVITIES MAILINGS ONE AND FOUR COMPARED

Test Group Control Group Percent of Percent of Mailings Mailings N o .______Question______Response No. 1 No. 4 No. I Ho. 4

1 On your last Yes 39 47 23 52 shopping trip to the super­ No 61 51 72 48 market, did you take some­ one with you?

2 If yes, who? None CO 50 72 48 Children 28 37 16 24 Husband 7 9 6 24 Relative 3 1 *■> 2 Friend 2 3 4 2

3 Percentage of None 27 27 56 60 supermarket 0-19 17 19 8 6 expenditure at 20-39 15 11 16 12 Big Bear 40-59 7 11 10 8 (5 0-79 9 5 4 2 80-100 25 26 4 12

4 Number of trips None 27 3 6 56 74 to Big Bear in 1 4 38 38 12 the last 7 2 36 17 4 6 n days 3 21 5 4 m 4 4 8 2 • • 4 5 4 1 t « • •

5 Percent of None G9 80 54 56 supermarket 0-19 14 6 20 18 expenditures 20-39 9 5 10 12 at" A & P 40-59 2 3 6 6 (50-79 2 2 6 4 80-100 4 4 4 4

6 Number of trips None 69 32 54 58 to A & P in the 1 3 13 2 22 last 7 days 2 19 3 28 * • 203 TABLE 17 Continued

Test Croup Control Croup Percent of Percent of Mailings Mailings No. Question Response MO. 1 No. 4 No. 1 MO.

7 Percent of None 40 41 36 44 supermarket ex­ 0-19 11 12 16 14 penditures at 20-39 7 10 10 12 Kroger 40-59 9 9 10 6 60-79 13 11 10 6 80-100 20 17 18 18

8 Number of trips None 45 47 40 56 to Kroger in 1 34 34 22 22 the last 7 days 16 14 22 16 3 2 3 10 2 4 2 2 6 • « 5 1 # ft ft « 2 7 • ■ ft ft • • 2

9 Percent of None 89 91 98 98 supermarket ex­ 0-19 4 7 • • 2 penditure at 20-39 5 ft • • « ft ft Albers 40-59 1 ■ • 2 • ft 60-79 • ♦ 1 ■ • ft « 80-100 2 1 ft ft ft •

10 Number of trips None 91 91 100 98 to Albers in 1 4 6 • « 2 the last 7 2 4 2 ft * ft • days 3 1 1 ■ * ft ft

11 Percent of None 86 91 98 100 supermarket ex­ 0-19 6 5 * ft » • penditure at 20-39 5 2 2 ft • Tarpeys 40-59 2 1 « • « • 60-79 ■ • 1 * ft ft ft 80-100 1 » ♦ ft » «■ •

12 Number of trips None 89 91 98 100 to Tarpeys in 1 7 6 2 ft ft the last 7 days 2 3 3 ft • ft ft 3 1 ft ■ • « ft ft

13 Percent of None 89 90 94 92 supermarket ex­ 0-19 ft « 1 2 4 penditure at 20-39 2 3 2 2 Cold Circle 49-59 2 3 2 2 60-79 4 • ■ • • • « 80-100 3 3 ft ft ft ft 204 TA3LE 17 Continued

Test Croup Control Croup Percent of Percent of Mailings Mailings No. Question Response Mo. 1 Mo. 4 MO. 1 Mo.

14 Number of trips None 39 90 96 92 to Cold Circle 1 g 7 4 8

the last 7 days 2 2 2 • • a a

15 Po you shop at None 11 76 *mo 10 other super­ Yes 15 14 58 44 markets? Wo 74 10 40 46

1G What would Under 510 • ♦ 1 • • • B you estimate 510-520 11 8 12 14 your over-all $20-530 19 21 28 20 weekly food bill $30-540 33 31 24 30 is in dollars? Over $40 37 39 36 36

17 On your last Mo resp. 3 3 a * 6 major shopping Yes 56 48 48 46 trip to the Mo 40 48 50 48

supemark e t, did Mo opin­ 1 1 2 a • you make any ion other stops or purchases other than at the supermarket?

18 If yes, what Nothing 29 49 52 53 else was pur­ drugs 42 35 8 24

chased? hardware 2 ■ a • ■ 4

gas, car • a 2 2 « •

sewing 3 2 2 ♦ a clothing • ■ 3 4 2

liquor 2 1 2 B •

spec. gro. 2 2 • a • a other 20 6 30 12

19 What is the Mo resp. 2 4 « • 4 closest super­ Big Bear 11 15 2 16 market to your A & P 4 5 10 16 home? Krogers 26 30 30 32

Albers 11 11 • a * •

Gold Cir. 1 m » • a • •

A Mart 7 2 a • • a

Tarpeys 1 • B • a 2 More than 36 32 56 42 one Other 1 1 2 4 205 TA3LE 17 Continued

Test Group Control Group Percent of Percent of Mailings Mailings No. Question Response Mo. 1 No. 4 No, 1 No. 4

20 Do you or any Mo resp. 2 member of your Yes 95 89 96 83 family presently No 5 4 Q save any type of No opin­ 2 trading stamps? ion

21 Number of green Mo resp. G2 63 62 77 ~) stamp books on None a* 5 • • ■ • hand 1 11 3 6 G 3 12 8 2 3 6 4 16 4 4 5 4 6 4 5 2 2 6 n 1 7 1 G 1 9 10 1 Over 10 1

2 2 Number of Top No reso.*- 20 25 10 22 Value stamp None 5 7 B 8 books on hand 1 12 13 G 4 2 9 11 2 14 3 7 5 14 6 4 12 4 10 4 5 5 4 10 6 6 8 7 0 • ♦ 7 4 4 2 6 8 4 2 10 4 9 2 n • ♦ 2 10 3 6 4 4 Over 10 8 11 16 16 206 TABLE 17 Continued

Test Group Control Group Percent of Percent of Mailings Mailings f l o . Question Bcsponse No. 1 No. 4 No. 1 Ho.

Humber of Ho resp. 15 20 34 38 Buckeye Stamp None 7 8 10 6 books on hand 1 7 7 8 4 2 12 15 16 16 3 7 8 4 14 4 9 10 0 6 5 10 9 4 6 6 5 6 4 2 7 5 1 2 2 8 7 4 • • 2 9 2 1 4 * * 10 6 7 4 2 Over 10 8 6 2 2

24 Humber of No resp. 72 84 62 38 Plaid stamp None 3 3 6 6 books on hand 1 7 1 4 4 2 5 4 18 16 3 3 2 2 14 4 2 2 • • 6 5 3 2 • • 6 6 2 1 2 2 7 1 1 2 2

8 • » • • 2 2 Over 8 2 1 2 12

25 Total number of No resp. 3 12 *■ * 12 kinds of trading None 1 1 4 • » stamps saved 1 IS 17 24 28 2 39 35 30 32 3 15 18 22 20 4 18 15 18 8 5 0 2 2 » *

26 Do you usually No resp. 2 3 * • 2 cash personal Yes 72 59 53 48 checks to obtain No 33 34 42 46 cash for miscel- Other 3 4 » • 4 lanoous or house­ hold expenses? 207 TABLE 17 Continued

Test Croup Control Group Percent of Percent of Mailings Mailings No. Question Response No. 1 No. 4 No. 1 No.

27 If yes, where do No resp. 35 39 40 48

you cash checks drug st. 3 * ■ 2 ■ ■ for cas'i— 1st bank 24 10 22 20 choice supemkt. 47 39 28 32

Other 2 2 2 9 9

Several « » 2 6 9 9

20 Second choice No resp. 90 95 88 98

as to where drug st. * • 9 9 9 9 2

checks are bank ■- • 9 m 9 9 ■ ■

cashed supermkt. 3 3 G 9 •

Other 2 1 6 * 9

29 On your last No resp. -■ ■ 2 • * 2 major shopping Cash 49 58 GO 64 trip to the Check 47 39 38 32 supermarket, Bank Or. 4 1 2 2 how did you pay card

for your pur­ Other • * ■ • 9 t 9 • chases?

30 Number of times No resp. 24 14 22 24

you paid cash None 3 3 * * • 9 for your super­ 1 2 4 2 4 market purchases 2 8 11 13 G during the last 3 11 7 3 6 30 days 4 10 11 10 4

5 4 7 ■ * 3 6 7 5 4 4 7 2 7 10 3 e 10 11 6 14

9 2 • * 6 4 10 8 6 8 10 Over 10 9 14 12 8 208 TABLE 17 Continued

Test Group Control Group Percent of Percent of Mailings failings No.____ Question______Response Mo. 1 No. 4 No. 1 No. 4

Number of times No resp. 36 36 54 46 you paid by check None 4 3 • * a • for your super­ 1 10 3 10 12 market pur­ 2 10 11 16 10 chases during 3 8 10 4 10 the last 30 4 11 17 6 12 days 5 C 7 4 ft • C 3 4 • • 2 7 2 1 2 « • 8 7 2 • B- 6 9 « • • a • ft * * 10 1 ft • 2 # • Over 10 2 1 2 2

Number of times No resp. 93 90 98 96 you paid for None 1 4 ♦ * ft a your super­ 1 4 4 « • 2 market purchases 2 * ■ 2 • * 2 by using a bank 3 1 « • 2 ft • charge card 4 • B • B • « « a during the last 5 1 • « a * ft ft 30 days Over 5 1 a • ■ • * ■

Other method of No resp. 97 97 96 98 paying for super­None 2 2 2 2 market purchases 1 • a • * 2 • ■ during last 30 2 1 ft B • • ft a days--number of 5 • a 1 • * ft a times used

Which super­ No resp. 48 23 86 14 markets in this None a * • • • a a • area accept bank Kroger 30 23 2 6 charge cards? Gold Cir. 11 12 2 6 First listed Tarpeys 7 8 2 a a Other 4 *> 8 • • Don't • ■ 32 a a 74 know

Which super­ No list 80 88 96 98 markets in this Kroger 4 2 • a ft ft area accept bank Gold Cir. 7 1 a a ■ ft charge cards? Tarpeys 6 7 • » 3 Second listed Other 3 3 2 • « Don 11 know • • • a 2 a « 209 TABLE 17 Continued

Test Croup Control Group Percent of Percent of Mailings Mailings No. Question______Response Mo. 1 No. 4 No. 1 Uo. 4

Number of tines No resp. 43 37 54 38 you or your None 18 22 13 30 family used your 1 3 13 12 14 BankAnericard 2 4 4 2 6 during the last 3 4 3 2 2

dO days 4 4 4 • * ■ ■

5 3 4 « • 4

6 5 2 4 • •

7 1 1 • • 2

0 1 2 • • » *

J « * • • ■ B * ■ 10 5 2 2 2 Over 10 5 6 6 2

Who is the Mo resp. 51 48 56 54 primary user of Husband 13 12 20 18 BankAnericard in Wife 12 17 4 6 your family? Doth 24 23 20 22

Number of tines Mo resp. 36 32 70 54 you or your None 23 19 12 20 family used 1 3 12 4 6 *> Masterchnrge «_■ 12 10 8 4 during the 3 2 7 4 4

last 30 days 4 4 2 • • • • 5 4 4 2 2 6 3 2 4

7 • * 2 • •

8 1 1 • •

9 • • 1 * * 10 3 2 4 Over 10 4 G 2

Who is the Mo resp. 47 41 70 74 primary user Husband 17 23 12 G of Masterchnrge Wife 15 15 3 in your family? Both 21 21 16 12 210 TABLE 17 Continued

Test Group Control Gr Percent of Percent of Mailings Mailings No. Question Response No. 1 No. 4 No.1 No.

40 Humber of times No. resp. 70 70 84 70

you or your None 19 17 14 0 0 family used 1 3 4 2 30

shoppers1 charge 2 3 3 ■ • ■ 0

during the last 3 • » 3 * ■ • m

30 days 4 2 2 » 0 0 0

5 1 • • • 0 m •

Over 5 2 1 • • • 0

41 who is the No resp. 80 80 84 86

primary user of Husband 1 • • ♦ * 0 0 shoppers' charge Wife 13 17 16 12

in your family? Both 6 3 0 0 2

42 Number of times No. rosp. 9 10 10 6 you or your None 12 24 24 32 family used your 1 11 14 24 14 Lazarus charge 19 15 12 12 card during 3 9 16 6 10 the last 3 0 4 11 5 10 2 days 5 8 4 2 14 6 9 4 2 4 7 1 1 • * • • 8 11 7 10 6

43 who is the No resp. 17 21 10 20 primary user of Husband • ♦ 3 • * 2 your Lazarus Wife 57 47 66 50 charge card in Both 26 29 24 20 your family?

44 Number of times No resp. 60 55 60 48 you or your None 24 27 16 22 family used 1 8 8 18 20 your Penney's 2 5 5 4 6 charge card 3 1 4 • « 4 during the Over 3 2 1 2 * ■ last 30 days

45 v;ho is the No resp. G9 65 60 60

primary user of Husband » * 2 • ♦ • 0 your Penney's Wife 25 28 30 32 charge card? Both C 5 10 Q 211 TABLE 17 Continued

Test Group Control Group Percent of Percent of Mailings Mailings Question Response Mo. 1 No. 4 No. 1 NO.

Number of tines Mo resp. 40 35 46 38 you or your None 21 36 22 22 family used your 1 20 8 18 16 n Scars charge *+ g 10 10 14 card during 3 e> 5 2 6

the last 30 4 3 4 • • • *

days 5 l 1 « * 2 Over 5 • * 1 2 2

V.'ho is the No resp. 48 47 46 48 primary user of Husband 4 3 4 4 your Gears Wife 26 30 32 32 charge card? Doth 22 20 18 16

Number of times No resp. 16 23 22 12 you or your None 13 3 18 • • family used 1 2 10 10 32 your oil 2 8 24 ■ • 24 company credit 3 5 12 4 10 card during 4 10 7 18 12 the last 30 5 3 7 10 4 days 6 12 4 8 G

7 • ♦ 1 2 • » 8 C » ■ 6 ♦ • 9 4 • • « *■ • • 10 n • ■ • • « *• Over 10 10 2 2 « •

Who is the No resp. 20 51 22 66 primary user husband 34 24 24 14 of your oil Wife 8 7 10 2 company credit Doth 38 13 44 13 card?

Other credit No resp. 10 56 22 28 cards used by Yes 37 33 72 64 you or your Mo 3 11 6 8 family 212 TABLE 17 Continued

Tost Croup Control Group Percent of Percent of Mailings Mailings N o . Question Response No. 1 No. 4 No. 1 No. 4

Recording of the Mo resp. 12 13 12 14 total number of None 4 6 6 6 kinds o^ credit 1 8 4 4 8 cards held by 2 6 10 8 4 the responding 3 13 5 16 4 family 4 12 8 14 22 5 8 15 8 8 G 11 16 16 18 7 17 14 10 8 8 9 9 6 8

Did your family No resp. 3 3 • * • • pay for gaso­ Yes 71 75 78 80 line with a No 24 22 22 20 credit card during the last 30 days?

Did your family No resp. 3 1 « * « ■ pay for a res­ Yes 24 25 18 26 taurant purchase No 71 74 82 74 with a credit card durinq the last 30 days?

Did your family No resp. 59 1 • * • « pay for pur­ Yes 32 62 78 74 chase of clo­ No 13 37 22 26 thing with a credit card during the last 30 days?

Did your family Mo resp. 5 1 • « • * pnv for a drug Yes 13 12 6 16 store purchase No 82 87 94 84 with a credit card during the last 30 days? 213 TABLE 17 Continued

Test Group Control Group Percent of Percent of Mailings Mailings No. Question Response Mo. 1 No. 4 No. 1 No. 4

56 Did your family No resp. 5 2 pay for a super- Yes 10 6 2 market purchase No 37 88 94 98 with a credit card during the last 30 days?

57 Did your family No resp. 5 2 pay for a pur- Yes 3 10 10 16 chase at a No 87 88 90 34 hardware store with a credit card durino the last 30 days?

53 Did your family No resp. 5 1 pay for the pur- Yes 7 11 10 8 chase of books No 88 88 90 92 v?.ith a credit card during the last 30 days?

59 Did your family No resp. G 2 pay for other Yes 27 18 12 4 purchases with No 67 80 38 96 a credit card during the last 30 days? A P P E N D I X C

TABLES OF LIKERT DATA

214 TABLE 18

NUMBER AND SIZE OF CHARGE TRANSACTIONS BY MONTH AT A SUPERMARKET IN UPPER ARLINGTON, OHIO*

Oct. Nov. Dec. Jan. Feb. March April May June

Net Number Sales Drafts 240 415 395 415 375 485 355 460 335

Gross Sales $3,900 $6,800 $6,300 $7,000 $6,400 $8,000 $6,100 $7,500 $5,800

Average Sale $16.50 $16.50 $16.00 $17.00 $17.00 $16.50 $17.50 $16.50 $17.50

Sales Distribution

$0-$5 15.9% 17.4% 12.9% 8 .0% 12.0% 11.0% 13.2% 12.9%

$5.01-$10 11.4% 29.0% 25.7% 29.5% 25.0% 30.8% 19.8% 2 1 .8%

$10.01-$20 22.7% 27.5% 38.6% 31.8% 35.9% 30.8% 33.3% 35.2%

$20.01-550 45.5% 24.6% 20.0% 29.5% 25.0% 26.4% 31.3% 28.9%

$50+ 4,5% 1.4% 2.9% 1 .1% 2 .2% 1 .2% 2.0% 1.5%

♦Taken from data furnished by the participating merchant. The figures have been rounded for ease of comparison. 216

TABLE 19

PROFILE OF BANKAMERICARD CUSTOMERS AT A SUPERMARKET IN UPPER ARLINGTON, OHIO MARCH 1972

A2£

The average age of a sample of customers was 32 years.

Years of Age Percent of Frequency

21-24 19.0 25-29 29.1 30-34 22.8 35-44 11.4 45-54 12.7 55-Over 5.1

Income

The average monthly income of the customer was $1,107.75.

Salary/Monthly Percent of

$0-400 4.1 $401-800 20.5 $801-1,200 34. 2 $1,201-1,600 22.0 $1,601-2,000 12.3 $2 ,001-Over 6.8 217 TABLE 20

LIKERT SUMMATED RATING ANALYSIS OF ALL ATTITUDINAL QUESTIONS IN ALL FOUR MAILINGS*

w T> 4-> G C G <3 G 1 3 flj x: oj 0) o (U *H OZH O' r s ps s >4 £ X fn

1 Stores that 1 All 2.739 2.111 4.396 accept bank Test 2.531 2. 059 3.037 Neg. charge cards Control 3.000 2.357 2.488 (Mastercharge or Bank- 2 All 2.733 2.043 4.094 Americard) Test 2.676 2.030 3.296 charge higher Control 3. 000 2.071 3.033 prices than those who 3 All 2 . 800 1.108 don11 . Test 2.722 2.031 4.225 Control 2.875 2.143 3.112

4 All 2.702 2.111 5.067 Test 2.687 2. 067 4.195 Control 2.786 2.286 2. 511

2 Checks are be­ 1 All 3.239 3. 667 1.755 coming very Test 3.281 3.765 1.765 Pos. difficult to Control 3. 200 3.357 .314 cash unless you are known by 2 All 3. 333 3. 596 1.141 the store Test 3.164 3.727 2.072 personnel. Control 3.143 3.133 .022

3 All 2.933 3. 383 1.822 Test 3.056 3. 594 1.907 Control 3.000 2. 929 .165

4 All 2.936 3.289 1.670 Test 2.969 3.515 2.166 Control 3. 000 2.643 1 . 000

*A T-Score of 1.7 is significant at the .05 confidence level. TABLE 20 Continued 218

'0 c d <0 d o o a> -H l-l *rl d jj O 4J •H M JQ Q (0 rl Cl fc t U -r1 3 3 N 3 High High 27% T Score Low Low 27% Mean of Respondents Mean Mean of C* ^ a £ Which

3 Sometimes the 1 All 2.870 2.333 2.295 monthly bill Test 2.813 2.412 1.515 Neg. from the bank Control 3. 067 2.286 2.925 is difficult to pay. 2 All 3.044 2.681 1.692 Test 3. 216 2.667 2.176 Control 2.733 2.786 0.145

3 All 3.133 2.426 3.165 Test 3.250 2.437 3.124 Control 2. 500 2.143 .957

4 All 3. 000 2.333 3.342 Test 3.156 2.424 3. 000 Control 2.786 2.214 2.010

4 Everyone uses 1 All 1.739 2.644 4. 621 a bank charge Test 2.156 2.670 2. 077 Pos. card; it's the Control 1.533 2.643 2.925 modern way. 2 All 1.822 2.723 4.283 Test 2.000 2.788 3.199 Control 1.467 2.357 2.797

3 All 1.911 2.915 5.193 Test 2.000 3.031 4. 586 Control 1.750 2.429 1.878

4 All 1. 830 3.089 6 . 250 Test 1.937 3.091 5.191 Control 1.786 2.714 2.174

5 People spend 1 All 4.237 3.178 5.106 too much money Test 4.357 3.176 5.515 Neg. with the new Control 4.333 3.357 2.411 bank credit cards because 2 All 4.289 2.979 6.997 they are too Test 4.054 2.909 4.725 easy to use. Control 4. 200 3.143 2.731 Pos.

Pos. Question 7 6 Number and Type oe i a is Money ol stop would people Most o lose. to and nuisance check. refused to cash to refused a patronizing their personal their tr i they if store is too easy too is •u O' c Q> (ft o 3 AL 2 Continued 20 TABLE H * H - rH r O' C in 4 3 1 4 2 4 3 2 3 1 (A H • x; o : a a) o x: a> o a Test All Control Test Test All Control All All All i.aoo Control 1.600 Control Test Control Control Test All Test All Control Test Test All Control All Control Test Test All Control •O Q) c tn C M d M — f »M dP 'M E J E C 10 0 1. 533 1.571 1.437 2.000 1. 656 1. 574 2.919 4.319 4.375 .9 2.644 1.891 3.194 1.622 1.644 3.149 3.178 3.429 2. 969 2.933 4.429 4.187 4.167 4.311 3.125 3.194 3.133 .2 3. 383 3.022 .4 3.265 3.344 3.109

r-

2.357 2.787 2.727 2.644 2.429 2.571 2.818 2.745 E 2.706 .0 2.113 2.500 3.429 3.500 3. 500 3.364 3.311 3.089 3.500 3.447 3.429 3.423 3.061 3. 312 3. 500 1.925 3. 364 3.267 3.500 3.298 m tn c x: CM C O 0 ) ->-t dP X

7.521 2.054 6 3.577 1.334 5.284 2.770 1.846 2.571 5.203 3.500 3.784 3.192 5.593 1.334 1.362 6.844 2.756 1.707 1.094 5.073 5.483 l/i O o 0 h . 372 .887 .000 .841 .948 .295 .674 219

220 TABLE 20 Continued

w 4i c c o 00 o O' TJ *w <*> m-i r- H O Oi a .e o -H 'H W * 5 O' to P x: o (U o ■H o £ s o£ E PJ X

8 The bank is 1 All 2.848 2.178 3.895 more likely to Test 3.125 2.176 5.205 Neg. make a mistake Control 2.400 2.286 .344 with a credit card than with 2 All 2.778 2.128 4.123 a personal check. Test 2.865 2.121 3.749 Control 2.533 2.143 1.788

3 All 3. 044 2.277 4.708 Test 1.667 2.969 6.047 Control 2.687 1.929 2.888

4 All 2.872 2.222 2.471 Test 3.000 2.121 4.957 Control 2.714 2.500 .822

9 It is a poor 1 All 4. 283 2.978 6.372 budgeting prac­ Test 4.344 3.000 5.729 N e g . tice to charge Control 4.333 3.143 3.162 supermarket purchases on 2 All 4.311 2.702 8.180 a bank charge Test 4.189 2.909 5.356 card. Control 4.267 2.071 6.903

3 All 4.133 2.702 6.757 Test 3.056 2.250 3.972 Control 4.375 2.286 7.899

4 All 4. 255 2.711 8.151 Test 4.187 2.697 6.160 Control 4.429 2.714 6.119

10 vThen people in 1 All 4.107 3.111 4.753 front of me in Test 4.375 3.176 5. 305 Neg. the checkout Control 3.733 3.000 1.831 line pay with a credit card. 2 All 4.022 3.362 3.077 it takes more Test 4.270 3.455 3.509 time. Control 3.733 3.000 1.687 221 TABLE 20 Continued

m T) c

G flJ o ‘.-I u +> o in o » High High 27% T T Score Low Low 27% Mean of Respondent Mailing Mean Mean of Which O 52 H Question

3 All 3.978 3.298 3.363 Test 4.222 3.562 3.046 Control 3.625 3.000 1.723

4 All 4.234 3.422 4.135 Test 4.344 3.545 3.505 Control 4.071 2.929 3.460

11 Most people 1 All 2.913 3.200 1.474 would stop Test 2.937 3.324 1.740 Pos. patronizing a Control 2.800 2.929 .354 store if they refused to 2 All 2.622 3.106 2.623 accept their Test 2.514 3.091 2. 805 bank charge Control 2. 533 3.071 1.434 card. 3 All 2.644 3.071 2.701 Test 2.694 3.428 3. 543 Control 2. 500 2.714 .547

4 All 2 . 681 3.267 3.587 Test 2.594 3.242 3.384 Control 2.714 3.286 1.736

12 If people 1 All 1.696 2.444 3.531 could charge Test 1.719 2.412 2.686 POS. almost every­ Control 1.667 2.429 2.343 thing they needed, it would 2 All 1.911 2.660 3.813 be worth a few Test 1.757 2.667 4.257 cents more per Control 2.067 2.929 2.298 order. 3 All 2. 681 5. 598 Test 1.778 2.813 4.707 Control 1.437 2. 50 0 3.689

4 All 1.723 2.733 5.076 Test 1.937 2.727 3.096 Control 1.429 2.643 4. 607 TABLE 20 Continued 222

T T Score High High 27% Low Low 27% Mean of Respondents Mean of Mailing which Question Number Number and Type Question

13 Most people 1 All 2.065 2.933 4.219 would like to Test 2.188 2.971 3.238 Pos. be able to make Control 1.733 2.643 2.576 purchases at the supermarket 2 All 2.067 2.979 5. 218 on a bank charge Test 1.973 2. 970 5.397 card. Control 2.067 2.929 2.263

3 All 2 . 000 3.170 6.092 Test 2.056 3.219 5.410 Control 1.750 2.857 3.081

4 All 1.915 3.156 6.970 Test 1.969 3.121 5.808 Control 1.857 3.000 3.040

14 Most people 1 All 1 . 826 2.800 5.386 find credit Test 1.875 2.912 4.999 Pos. cards help them Control 1.733 2.428 2.263 balance their budget. 2 All 2.133 2.702 3. 509 Test 2.081 2.818 3.915 Control 2. 067 2.429 1.243

3 All 2.022 2.894 4.735 Test 2.222 2.781 2.629 Control 1. 563 2. 929 4.961

4 All 2.149 2. 911 4.563 Test 2. 219 2.939 3. 506 Control 1.929 2.714 3.088

15 Most people 1 All 3.435 2.600 4.188 would take Test 3.438 2.765 2.831 Neg. trading stamps Control 3.333 2.357 2.977 in preference to being able to 2 All 3.267 2.915 1.808 charge their Test 3. 270 3.000 1.354 purchases at a Control 3.133 2.786 . 808 supermarket. Question Neg. Neg. 16 7Pol buy People 17 Number and Type eas te can they because hre t and it charge check. a with a later. pay People are more are People ak ad than card bank over­ be to apt charged when charged aig ih a with paying hns that things hy o o need not do they

Question AL 2 Continued 20 TABLE 4 2 3 4 1 3 1 2 3 4 Hailing Test All Control All Control All Test All All Test Control Test Control Control Test All Control Test All Test Test Control Control Control Control Test All All All Test Which Respondents 4.281 .4 3.511 4. 094 4.149 4.111 4.133 4.533 4.200 4. 286 4.222 4.437 2.937 4.413 3.222 2.867 4.135 2.933 2.714 3.357 3.344 3.319 3.125 3.083 2. 913 2.711 2.844 2.861 2.687 2.851 2.676 2.533 Mean of Low 27% 3.515 3.656 3.426 3.643 3.638 3.857 3.394 2.429 3.382 3.467 2.851 2.030 2.128 2.147 3.429 3.714 2.234 2.429 2.786 2.788 2.689 2.286 2. 214 3.071 2.750 2.156 2 2.133 2.178 Mean of . 061 High 27% 2.549 3.053 4.089 2.476 3.535 2.476 1.935 3.177 3. 681 1.862 1.743 4.417 4.538 4.341 3.973 1.954 2.362 3.377 1.459 4. 508 3.299 3.408 3.830 4.103 3.756 5.458 .148 .955 . 92 .832 T Score 223 6 Question •a Neg. Neg. a a tA .aa> . s o P 20 19 18 c c m <0 1 3 a> >1 3 a E +J u cs or cash out ucae and purchases vrsed in over-spend rdt cards. credit only but checks ot stores Most keep track of track keep able be to nice People would People o hv to have not do not want not do ad....they card cek ok or book check a epe o use to people hre card. charge ar cash. carry a system with­ system a epe big a people doing are c lk they like act c lk they like act o hre all charge to bn charge bank a cet bank a accept ao to favor twud be would It o» o AL 2 Continued 20 TABLE H ■ H ■ E id c c cn All 4 2 1 4 2 1 3 2 1 3 JZ ■ o X oiS All Test All Test Control Control Control All Control Test Control Test Test All a.u h l 1.500 All All Test Control Test Test Test All Control Control All Control Test All Control tn o *0 JJ 0) Q> c M-ldip E r- O G C Q O 3 * 4.135 4.533 4.333 4.457 4.333 1.533 2.429 1.667 1.400 1.594 1.312 4.469 2.400 2.437 2.778 2.667 2.596 1.444 1.531 1.286 1.489 2.500 1.639 3.061 1.568 2.556 2.600 2.500 2.459 2.687 rs| u-ir- E X 3.000 2.848 .5 3. 265 3.455 3.362 3.214 3.325 3.235 2.143 2.778 2. 941 .2 6.865 3.222 2.911 3.235 2.286 2.214 2.571 2.429 .5 04.265 7.091 2. 500 2.875 1 1 1 . 2 2.298 2.147 2. 500 2.447 2.214 2.273 2.333 2.289 2.957 2.723 0 «N 0

TABLE 20 Continued

High High 27% Low Low 27% Mean of T Score Respondents Mean of Mailing Which Question Number Number and Type Question l 1

3 All 4.556 3.298 7. 934 Test 4.333 3.312 5.223 Control 4.688 3.357 4.310

4 All 4.340 3.311 5.948 Test 4.281 3.242 4.665 Control 4.500 3.643 3.919

21 There are too 1 All 3.891 3.644 1.055 many credit Test 3.937 3.824 .476 Neg. cards to carry. Control 3.733 3.214 1.059

2 All 4. 022 3.362 2.189 Test 4.027 3.485 2.237 Control 4.000 3. 286 1.782

3 All 4.000 3.362 3.576 Test 4.111 3.406 3.290 Control 4.063 3.429 1.835

4 All 3.979 3.311 3.419 Test 4.063 3.242 3.649 Control 4.071 3.429 2.024

22 Most people 1 All 3.152 3.156 .018 use a bank Test 3.281 3.176 .460 P o s . charge card at Control 3.000 3.000 .000 the supermarket any time they 2 All 2.800 3.085 1.458 are short of Test 2.946 3.212 1.165 c a s h . Control 2.200 2.786 1.688

3 All 3.098 3.234 .683 Test 3.278 3.250 .122 Control 2.750 3.286 1.452

4 All 2.894 3.356 2.517 Test 3.125 3.424 1.444 Control 2.571 3.214 1.858 226

TABLE 20 Continued

in c n) c a* dP 0 o ■o IM <*> in r- to O' W 3 J2 0> O 0 0) -H a z e-» O r i £ « E *J E X in

23 Our society is 1 All 3.273 2.400 3.793 already using Test 3.219 2.559 2.452 Neg. too many Control 3.533 2.071 3.648 machines and is too regimented 2 All 3.911 2. 383 8.480 by computers. Test 3.703 2.515 5.046 Control 3.800 2.214 5.133

3 All 4.133 2.468 8.719 Test 3.722 2.500 5.004 Control 4.312 2.214 6.573

4 All 3.766 2. 533 5.977 Test 3.844 2.515 5.846 Control 3. 929 2.714 3.002

24 It is a good 1 All 2.435 2.933 1 . 808 idea to have the Test 2. 500 3.059 1. 775 Pos. paycheck de­ Control 2.400 2.643 .459 posited directly to the bank 2 All 1. 978 3.106 4.553 account by the Test 2.162 3.333 4.119 employer. Control 1.800 2.714 1.848

3 All 2.178 3.08 5 3.494 Test 2.417 3.250 2.867 Control 2 . 0 0 0 2.571 1.166

4 All 1.957 3.044 4.551 Test 2.094 3.152 3.594 Control 1.857 2.786 2 . 2 1 2

25 Once you get 1 All 3.196 2.111 5.572 started on a Test 2. 969 2.088 3.895 Neg. bank charge Control 2.467 2.357 3.003 card, you can never quit 2 All 3.089 2.149 5.088 because it Test 2.892 2.091 3.957 takes too Control 3.133 2.214 2,407 much money to catch up. 227

TABLE 20 Continued

in +J 'd C e Cl OP o o CP 10 14-4 <*> iw r- Cl • H Ul -H c c 0 r* 0 in u +J 01 ■U •H .c o IN 0 w ja a in H u a c e js U a) e a a> •H >rl w m cp l/l D 3 >1 3 <9 .G Cl Cl O (LI *H O 'Z H O r s IK r j £ K H

3 All 3.267 2.255 5.174 Test 3.083 2.250 3.768 Control 3.375 2.071 3.634

4 All 3.447 2.289 5.976 Test 3.469 2.303 4.921 Control 3.643 2.286 4.567

26 It is a good 1 All 2.304 3.333 4. 686 Test 2.375 3.324 3.506 POS. Control 2.200 3.286 2.925

2 All 2 . 2 0 0 3.596 6.986 Test 2.459 3. 515 4.065 Control 2 . 2 0 0 3.857 4.745

3 All 2.489 3.362 3.910 Test 2.528 3.428 3.515 Control 2.813 3.286 1.139

4 All 2.532 3.444 4.072 Test 2.375 3.455 4.072 Control 3.071 3.571 1.314

27 It is a lot 1 All 4. 339 3.111 5.487 faster to pay Test 4.094 3.265 3.470 Neg. cash and skip Control 4.467 2.857 4.744 all that fuss with a bank 2 All 4.067 3.298 3.913 charge card. Test 4.216 3.333 3. 854 Control 3. 933 3.357 1.720

3 All 4.356 3.277 6 . 1 1 1 Test 4. 333 3.344 4.888 Control 4.250 3.143 3.296

4 All 4.106 3.222 3.840 Test 4. 000 3.333 2.456 Control 4.357 3.071 3.059 228

TABLE 20 Continued

73 G

CD C 0 O ■i-t V 4 ■MO) -U tn 3 * 3 T T Score High High 27% Low Low 27% Mean of Respondents Mean Mean of Mailing O ?! Eh O Which

28 People prefer 1 All 3.152 1. 978 7. to carry cash Test 2. 906 2 . 0 0 0 4. Neg. to pay their Control 3.533 2 . 0 0 0 5. bills. 2 All 2.822 2.191 3. Test 2.568 2.152 2 . Control 3.133 2.286 2 .

3 All 2.933 2.234 3. Test 3.056 2.188 3. Control 2.750 2.429 *

4 All 3.106 2.178 4. Test 2.906 2.091 3. Control 3.643 2.500 3.

29 It is a good 1 All 2.261 3.044 3. idea to have Test 2.531 3.118 2 . Pos. the utility Control 1.733 2.714 3. bills paid automatically 2 All 1.956 2.809 4. from your Test 2.108 2. 909 3. checking Control 1.933 2.643 2 . account. 3 All 2.067 2.787 3. Test 2.167 2.781 2 . Control 2.312 2.786 1 .

4 All 1.936 2.778 4. Test 2.094 2.697 2 . Control 1.714 2.929 4.

30 People would 1 All 4.391 2.889 8 . lose control Test 4.214 3.000 5. Pos. over their Control 4.667 2.069 6 . personal finan­ cial matters 2 All 4.244 2.851 6 . under a no­ Test 2.054 2.808 5. cash, no­ Control 4.467 2.857 4. checks system. 229 TABLE 20 Continued

High High 27% T Score Respondents Low Low 27% Mean Mean of Mean Mean of Mailing Question Which Number Number and Type Question 1

3 All 4.378 3.000 8.378 Test 4.250 2.937 7.189 Control 4.375 2.714 4.550

4 All 4.191 3.022 6.092 Test 3.906 3.000 3.852 Control 4.643 3.071 5.276

31 Parents should 1 All 2. 087 3.333 5.914 give their Test 2 . 0 0 0 3.382 5.468 Pos. teenage chil­ Control 1.867 3.382 4.164 dren experience in using a bank 2 All 2.133 3.255 5.682 charge card. Test 2.432 3.455 4.489 Control 1.800 3. 000 3.509

3 All 2. 244 3. 383 5.054 Test 2.417 3.531 4.642 Control 2.188 2.786 1. 365

4 All 2. 213 3.556 6.187 Test 2.312 3. 606 4.759 Control 1.929 3.500 4.938

32 They should 1 All 4.043 3.873 1.097 have separate Test 4.219 3.794 1 . 862 Pos. checkout lanes Control 3.667 3.929 .786 for credit card customers. 2 All 3.844 3. 638 .914 Test 4.162 3.667 2.116 Control 3.467 3.429 . 085

3 All 4.000 3.745 1.306 Test 4.222 3.656 2.448 Control 3.687 4.143 1.327

4 All 4.043 3.733 1.631 Test 4.156 3.697 1.874 Control 3.786 3.571 .685 Question' ?5 E-* T3 -3 O Neg. Pos. « Pos. 35 3 U C 34 g CD 33 a >1 uh interest much h they who h bank The n charge a on hre too charges wanted when wanted ol nt be not would ih automatic With ad account. card or checking your ak people bank, il b the by bills l bls paid bills all h bn from bank by the automatically amn of payment be o pay to able account. opy them. pay to they wanted they t s good a is It da o have to idea ■iH r a •U 0 c M 3 a AL 2 Continued 20 TABLE *H -H >—1 c IB 1 2 1 All 4 3 2 4 1 3 2 Z o JZ 'H in .n o 3 3 OS Test All Test Control Test All Test Control Control Control Test Test Test All Control All Control Test All l 3.739 Control Test All o Q. All All Control All Control Test Control T3 ■4J 0 c c V) ) tu <*> O r- Of0 C 3.911 4.200 3.867 3.892 4.000 3.935 4.000 1.532 3.667 3.571 3. 781 1.563 3.745 3.933 4.081 1.500 1. 625 1.750 1.600 1.467 4. 022 3.806 3.844 1.511 1.467 1.500 1.541 3.731 1.609 C C £ 3.714 3.000 3.176 3.178 3.929 3.106 3.214 3.857 3.687 3.727 3.756 3.857 2.215 2.143 2. 362 2.178 0 0 0 . 2 2.455 3.643 3.735 2.412 2.378 2.214 3.788 2.152 2.344 2.234 3.809 3.711 3.745 « (r> to 0 4.157 O o 3.949 3.025 3.448 M 3.392 2.892 2.423 4.327 2.126 5.295 2.947 3.585 3.868 2.029 2.798 3.869 2.535 1. 504 5.761 ) .468 . 304 . 064 .242 .976 .536 .531 .083 .463 .239 .171 230 TABLE 20 Continued 231

to Tl HJ G c e a G 0) <#> o o O' ♦a IW dP u-i r* o * r4 G a O r- O CN M 4J o 4J •H x: o n 0 01 tn rH u a. C c x: o S f a a> -iH •rH CO A cr» to 3 3 > 1 3 « j c a) 0) o O ’H C* ?! a r s «: r j s: x H

3 All 4.067 3. 212 4. 580 Test 3.972 3.219 3.256 Control 4.125 3.357 2.179

4 All 3.851 3.089 4.215 Test 3.939 3.121 3.722 Control 3.643 3.143 1.639

36 Most people 1 All 3.109 3.800 4.245 like the idea Test 3.250 3.882 3.252 Pos of using the Control 3.133 3.500 1.229 bank money for a month free 2 All 3.244 3.851 3.728 when they use Test 3.703 3.909 1.269 a bank charge Control 2.867 3.786 3.224 card. 3 All 3.289 3.745 2. 609 Test 3.611 3.711 .597 Control 3.125 3.857 2.285

4 All 3.298 3.844 3.788 Test 3.469 3.879 2.190 Control 3.071 3.786 4.191

37 Most people 1 All 4.087 3.222 5.116 would prefer Test 4.000 3.176 3.861 Pos cancelled checks Control 4.333 3. 500 3.882 as proof of pay­ ment rather 2 All 4.022 3.298 4.265 than a monthly Test 4. 000 3.273 3.734 statement of Control 4.333 3.500 2.622 amount paid each firm 3 All 4,000 3.426 2.982 by the bank. Test 3.972 3.375 2.619 Control 4.125 3.429 2.138

4 All 4.085 3.289 5.040 Test 3.906 3.242 3.530 Control 4.429 3.357 4.065 Question •o jd fljc

sn a bank a Using oenet cm Test com­ government, business. The ih automatic With bu y perso­ my about world puter a things nal hre adTs 3. 406 Test check a cash card charge the by bills knows too much too knows n nw store. new a in to trying than easier much is Control already. amn of payment e impossible be bank, it would it bank, dsue bl.Control bill. disputed a to refuse to pay to refuse to --i ■P O' o 3 V W c AL 2 Continued 20 TABLE 2 1 4 3 2 1 2 4 1 3 ■H •ct r c fl3 r. x: W o H ■ £: « Test o o a, Control Control All Control All Test All Test All Control Control Test All Control Test All Test Control Test All Test All All Control All o •o +J to -C C 2.714 M < O 2.429 2.733 2.750 2. 786 2. 553 2.765 3.428 3.222 2.937 2.714 3.273 3. 643 3.000 3.255 3.471 3.043 = r- 2.261 6.087 2.069 2.914 4. 554 4.387 3.286 3.332 3.304 4.240 3.766 3.567 1.158 2.351 5.899 4.658 4 .400 2. 566 2.545 1.282 w 5.344 2.139 1.199 3.176 2.233 2.638 1.674 E-* CJ o u u .490 .193 .713 232 Neg. Neg. 42

41 Question TJ XX ifr < HJ C kt e 1 )

o,

Question

I

i Continued 20 TABLE All 4 2 4 1 3 3 All 4 All 3 2 1 Mailing Control Control All Control Test Control Test Test Test Test All Test All Test All Control Control Test Control Control Test Control All Test All All Control Which Respondent (0 4. 250 4.361 4.286 4.289 4.219 4.351 4. 356 4.234 4.370 3.344 3.362 4.333 4.333 3.000 3.156 3.106 3.312 3.333 . 5 13.765 4. 531 3.333 3.178 3.286 .0 2.133 2.906 3.109 3.125 3.200 3.000 3.200 3.378 3.356 Mean of Low 27%

3.929 3.489 3. 545 3.594 3.532 3.591 2.143 3.786 3.929 2.214 3.485 4.022 3.532 3.778 3.643 1 1 1 . 2 2.143 4.000 3.969 2.176 2.061 0 0 0 . 2 4.0 91 3.872 0 0 0 . 2 2.188 2.191 1 2 0 2. Mean of High 27%

1.149 4.111 4.674 2.550 1.569 1.033 4,707 . 2 0 1.2 4.953 6.838 3. 590 4 .324 4.814 2.943 6.045 3.130 3.456 3.936 3.001 3.319 4.873 3.709 3.961 4.387 2.797 5.373 6.030 2.936 3.065 3.026 T Score 233

Question . s o P . s o P 5Pol lk to like People 45 T3 Pos. A 44 43 C O U Id d E-1 >4 04 0) akt pur­ market oe oe for money more matic machine matic te things. other use a bank a use hss eas Test because chases to card charge a fr super­ for pay id fe Test bank a with after mind prefer personal prefer people Most ecads Control merchandise ak f you if back hn n auto­ an than rather bank t evs them leaves it aig o i Control it for paying elr Control teller. a at service hne your change hre card. charge ay o take to easy t s very is It ■U O' 3 (0 o C AL 2 Continued 20 TABLE 4 2 3 4 All 4 2 3 1 3 2 1 ‘rH *H r id e O’ XZ • .C0 Control Test All All Test Control Control Control Test All l 2.578 All l 3.867 Control Test All Test Test l 3.956 Test All Control osS h o a o Control l 3.891 All Test All Control Test All l 3.133 All Cl tn T3 +J c o in C c c 0 *M 3. 214 3.656 3.583 3.667 3.143 3.622 3.364 3.735 sz dp 0 0 0 . 0 1. 526 1. 500 3.645 1.227 2.739 2.749 1.533 3.106 2.747 1. 807 1.656 2.425 2 1.631 2.745 3. 460 1. 518 1.314 1.869 3.037 3.257 2. 517 2.235 3.372 W En

C 19 c a <*o O o O' * a • W tfP <4-i r>* CJ • H »-) -H c c 0 r - 0 < N u 4-» o ■u ■r4 o fM o W -Q o in o a c C .C o a e o •H -H M 19 t P w (U - H a a >1 3 (9 J T IK a o ■—i O 2 O r a

46 A new direct 2 All 2.800 3.340 3. 725 line to the Test 2.892 3.364 2.601 P o s . bank would be Control 2.667 3.143 1.829 more accurate than the old 3 All 2.800 3.191 2. 514 system of Test 2.917 3.281 2.027 charging. Control 2.750 3.143 1.633

4 All 2.830 3.178 2.475 Test 2.844 3.273 2.393 Control 2.714 3.143 2.255

47 People tend to 2 All 3.133 3. 021 .610 purchase better Test 3.189 3.152 .163 P o s . qualities or Control 3.067 2.857 . 584 higher priced items at the 3 All 3.311 3.128 .916 supermarket on Test 3.167 3.031 . 604 the trips Control 3. 562 3.286 .741 when they know they are going 4 All 3. 383 3.178 1.050 to use a bank Test 3.344 3.182 .665 charge card to Control 3. 571 3.214 1.032 pay for their purchase.

48 They should 2 All 3.622 3.681 .336 provide a book Test 3.351 3.667 1. 402 P o s . to keep track of Control 3.867 3.929 .262 all the bank credit card 3 All 3.489 3.851 2.066 purchases made Test 3.417 3.812 2. 013 each month. Control 3.312 4.286 3.274

4 All 3.723 3.556 .983 Test 3. 607 3. 545 .648 Control 3.857 3.643 . 967 TABLE 20 Continued 236

TJ 4J c c to O o O' T3 <*> IN fl) ■H M c C 0 r- 0 rsi U ■U <0 +> ■H sz o CM 0 U1 JQ to W rH u a C ^ C X 0 fl O' CO 3 3 >1 3 <0 -3 to a) Q

49 Most people 2 All 3.133 3.234 . 592 tend to Test 3.135 3.242 .499 Pos. stock up on Control 3.133 3.357 .681 specials and buy larger 3 All 3.267 3.340 .397 orders at the Test 3.083 3.312 1.065 supermarket Control 3. 500 3.357 .445 when they know they are 4 All 3.298 3.356 . 319 going to use Test 3.156 3.394 1.069 their bank Control 3.571 3.429 .469 charge card to pay for it.

50 I would like 4 All 2.043 3.044 6.004 to have the Test 2.0 0 0 3. 061 5.121 P o s . automated Bank- Control 2.143 3. 000 3.123 Americard ter­ minals like the ones in use in Upper Arlington available to serve charge card customers in all stores that accept my BankAmericard.

51 The automated 4 All 2.426 3.156 4.244 terminals to Test 2.281 3. 212 4.128 Pos. process the Control 2.714 3.000 1.472 BankAmericard in many dif­ ferent retail stores have been a good thing for the customer. 237 TABLE 20 Continued

tn C c d 4 d 40 o o tn -o •H 40 *H P- Q) ■<-» d d O r- 0 PI U 4J i 3 £

52 The fact that 4 All 2.170 3.644 9.651 a supermarket Test 2.000 3.636 8.735 Pos. now accepts Control 2.429 3,357 3.523 BankAmer icard is a good thing for its custo­ mers.

53 It takes longer 4 All 3.447 3.422 .126 to go through Test 3.656 3.545 .438 Neg. the checkstand Control 3.071 2.857 1.122 when they use the automated terminals to accept a bank charge card.

♦Mailing Number One had forty-four statements; numbers Two and Three had forty-nine; and Mailing Number Four had fifty-three statements; therefore, the last section of this table did not have four responses to each statement. 238

TABLE 21

LIKERT RATINGS ON QUESTIONS FAVORABLE TO CREDIT CARD USE BY THE THIRTY RESPONDENTS WHO USED THE COMPUTER TERMINALS IN MAILING NUMBER ONE COMPARED WITH FOUR

Resp. Question Numbers Likert NO. 2 7 14 19 40 43 Rating

3 4 1 3 1 3 4 2.67 8 5 2 2 4 4 3 3.33 13 4 4 2 3 4 4 3.50 21 4 1 1 1 5 5 2.84 32 4 4 2 4 5 4 3.84 41 5 4 2 2 4 4 3.50 43 3 2 2 2 4 4 2.84 45 4 2 3 3 4 4 3. 50 47 4 1 2 2 4 1 2.33 51 4 2 2 1 2 2 2.16 56 2 2 4 4 5 5 3.67 61 4 2 3 4 4 4 3.50 66 2 2 4 2 3 5 3.00 67 5 4 4 4 5 4 4.33 69 4 2 2 2 4 2 2. 67 75 4 5 3 5 5 4 4.33 82 3 2 2 2 4 4 2.84 94 4 1 2 1 5 3 2.67 95 2 5 2 2 4 2 2.84 127 4 3 2 3 5 2 3.16 131 4 4 4 2 4 4 3.67 136 5 4 4 3 5 4 4.16 140 4 4 3 4 4 4 3.84 142 4 2 3 2 4 3 3.00 143 4 2 2 1 4 3 2.67 151 4 2 4 2 4 4 3.33 154 5 2 1 1 4 4 2.84 190 5 2 2 1 4 3 2. 84 191 4 2 3 1 4 4 2.67 19 6 2 2 3 4 4 3 3.00

116 77 78 73 124 106 95.54

Likert Rating 3.87 2.57 2.60 2.43 4.13 3.54 3.19 239

TABLE 21 Continued

LIKERT RATINGS ON QUESTIONS FAVORABLE TO CREDIT CARD USE BV THE THIRTY RESPONDENTS WHO USED THE COMPUTER TERMINALS IN MAILING NUMBER FOUR

Resp. Question Numbers Likert No. 2 7 14 19 40 43 45 50 51 Rating

3 3 2 1 1 4 4 3 1 1 2.2 2 8 3 2 2 2 4 4 2 3 2 2.67 13 4 4 2 4 5 4 3 1 1 3.11 21 4 2 2 2 4 4 2 3 3 2.89 32 4 4 2 4 4 4 4 2 2 3.33 41 4 4 2 1 4 3 3 3 3 3.00 43 3 2 2 2 4 4 4 2 2 2.77 45 3 2 3 2 4 4 2 2 2 2.67 47 4 1 2 2 4 1 2 1 1 2 . 0 0 51 4 2 3 2 4 4 3 2 3 3.00 56 4 2 4 2 4 4 4 1 1 2.89 61 4 2 2 2 3 4 2 4 3 2.89 66 2 2 3 3 4 4 2 2 2 2.67 67 4 2 4 2 5 4 2 3 4 3.33 69 4 2 4 3 4 2 1 4 4 3.11 75 2 5 2 4 5 4 4 4 4 3.78 82 4 4 2 2 5 4 1 4 4 3.22 94 3 2 3 2 3 3 2 1 1 2. 2 2 95 2 1 2 1 2 4 5 1 1 2 . 1 1 127 4 4 3 3 2 4 4 3 4 3.45 131 4 3 2 3 4 4 1 2 3 2.89 136 5 3 3 2 4 3 3 3 3 3.2 2 140 4 4 4 4 4 4 2 4 4 3.78 142 2 1 3 2 4 4 2 2 2 2. 44 143 4 1 4 1 4 4 1 2 3 2.67 151 2 2 3 2 4 4 2 4 4 3.00 154 4 4 3 2 4 4 2 2 2 3.00 190 5 2 5 2 4 3 4 3 4 3.56 191 3 2 3 3 3 3 3 2 2 2.61 196 2 5 3 4 4 4 3 2 2 3.22

104 78 83 71 117 110 78 73 77 87.72

Likert Rating 3. 47 2. 60 2 .77 2.37 3.90 3.67 2.60 2.43 2.57 2.92

NOTE: Responses from mailings number one and four show few significant differences. 240

TABLE 22

LIKERT RATINGS ON QUESTIONS FAVORABLE TO CREDIT CARD USE BY THE THIRTY RESPONDENTS WHO USED THE COMPUTER TERMINALS IN MAILING NUMBER TWO COMPARED WITH THREE

Resp. Question Numbers Likert NO. 2 7 14 19 40 43 45 Rating

3 3 2 2 2 4 4 2 2.71 8 4 2 2 2 4 3 2 2.71 13 4 4 3 4 5 3 3.43 21 4 2 1 2 4 4 2 2.71 32 4 2 4 5 4 4 4.00 41 4 4 2 1 5 4 3 3.29 43 3 2 2 1 3 4 3 2.57 45 4 2 3 3 4 4 3 3.29 47 4 2 2 1 4 1 3 2.43 51 4 2 3 2 4 2 2.71 56 3 2 4 4 4 4 3 3.43 61 4 2 2 4 4 4 2 3.14 66 2 4 4 2 5 2 3.00 67 4 2 4 4 5 2 2 3.29 69 4 2 2 3 5 2 2 2 . 86 75 4 5 4 5 5 4 5 4.57 82 4 2 2 2 4 4 1 2.71 94 1 1 1 5 3 2 2.14 95 1 1 2 2 4 4 2 2. 29 127 4 2 4 3 5 2 3 3.29 131 4 2 2 1 4 3 2 2. 57 136 4 2 3 5 4 3 3.71 140 4 4 4 4 4 3 2 3.51 142 4 2 3 1 4 4 2 2 . 86 143 4 1 2 1 2 4 2 2.29 151 2 2 4 2 4 4 2 2 . 8 6 154 4 2 3 3 3 4 3 3.14 190 5 2 2 2 4 2 3 2 .8 6 191 3 2 - - 5 5 2 3.43 196 2 4 2 4 2 4 3 3.00

108 72 75 75 122 106 75 89.82

Likert Rating 3.60 2.40 2.53 2.53 4.06 3.53 2.50 2.99 241

TABLE 22 Continued

LIKERT RATINGS ON QUESTIONS FAVORABLE TO CREDIT CARD USE BY THE THIRTY RESPONDENTS WHO USED THE COMPUTER TERMINALS IN MAILINGNUMBER THREE

Rating Resp. Question Numbers Likert On All No. 2 7 14 19 40 43 4 5 Rating Questions

3 2 2 2 1 4 4 2 2.29 2.80 8 2 2 2 3 4 4 2 2.71 2 . 8 6 13 4 4 2 4 4 4 3 3.57 3.50 21 5 2 2 2 4 4 2 3.00 2.80 32 4 4 2 4 4 4 2 3.71 3.43 41 4 2 2 1 4 4 3 2.86 2 . 8 6 43 3 2 2 2 4 4 3 2.86 2.90 45 2 2 3 3 4 4 3 3.00 3.08 47 4 1 - - 4 4 2.86 2. 94 51 4 2 2 2 4 2 2.57 2.53 56 2 2 3 3 5 4 4 3.14 2 . 8 8 61 2 2 2 2 - - 2.00 2.80 66 2 2 4 2 4 4 2 2.86 2.70 67 5 3 4 2 5 2 3.29 3.18 69 2 1 2 2 4 3 2 2.29 2 . 8 8 75 2 5 2 4 5 4 5 3.86 3.71 82 4 4 2 2 4 4 2 3.16 2 . 8 6 94 2 2 3 2 4 4 3 2.86 2.71 95 1 1 1 2 1 1 1.71 2.35 127 4 2 2 3 5 4 3 3.29 3.12 131 4 4 1 4 -— 3.16 2.90 136 5 4 3 2 4 4 3 3.57 3.12 140 2 4 3 4 5 4 2 3.43 3.41 142 4 4 2 2 4 4 2 3.16 2.76 143 5 1 4 1 2 4 1 3.57 2.47 151 2 2 -- 4 4 2 2.86 3.02 154 4 4 2 2 4 4 3 3.29 3.12 190 5 2 4 2 4 4 3.29 3. 88 191 3 2 2 1 4 4 4 2.86 2. 57 196 2 2 2 4 2 4 2 2. 57 2. 8 6

96 76 67 68 110 104 75 89.15

Likert Rating 3. 20 2 .53 2.40 2 .43 3.93 3.71 2 .60 2.97

NOTE: Responses from mailings number two and three were very similar. SUMMARY OF MEASUREMENT OF RESPONSES TO ATTITUDINAL QUESTIONS OF FOUR MAILINGS

Mean Plus Mean Plus Mean Minus Mean Minus Mailing Arithmetic Standard One Standard Two Standard One Standard Two Standard Number Mean Deviation Deviation* Deviations* Deviation* Deviations*

1 2.876 .144 3.020 3.164 2.732 2.588

2 2.939 .146 3.085 3.231 2.793 2.647

3 2.880 .155 3.035 3.190 2.725 2,57

4 2.906 .145 3.051 3.196 2.761 2.616

*One Standard Deviation from the Mean is significant at the .158 level, one-tailed test. Two Standard Deviations from the Mean is significant at the .0227 level, one-tailed test. K) TABLE 24

LIKERT SUMMATED RATINGS SHOWING INDIVIDUAL TOTAL SCORES FOR ALL FOUR MAILINGS

Mailing Number 1 2 3 4

Lowest Score Total Score 44 49 49 53 Possible Average Summated Rating 1 1 1 1

Lowest Total Score Total Score 94 113 97 109 Low 27% Average Summated Rating 2.136 2.306 1.980 2.057

Score for Cut-Off Total Score 119 135 134 145 Low 27% Average Summated Rating 2.705 2.755 2.735 2.736

Mean of Low 27% Average Total Score 111 126 124 135 Average Summated Rating 2.513 2.571 2.531 2.547

Mean of High 27% Average Total Score 141 157 157 170 Average Summated Rating 3.205 3.204 3.204 3.208

Score for Cut-Off Total Score 134 150 150 162 High 27% Average Summated Rating 3.045 3.061 3.061 3.057

Highest Total Score Total Score 160 180 182 192 High 27% Average Summated Rating 3.636 3.673 3.714 3.623

Highest Score Total Score 220 245 245 265 Possible Average Summated Rating 5 5 5 5 243 Total Number of Questions Each Mailing 44 49 49 53 244

The lowest total summated score, ninety-seven, was in mailing number three. Here an average summated rating of 1.979 was figured for each of the forty-nine questions by dividing ninety-seven by forty-nine, the number of questions possible. The highest total summated score, one hundred ninety-two, was in mailing number four, which figured an average summated rating of 3.623; however, mailing number one had a higher summated rating of 3.636 on forty-four questions.

Average mean scores for each mailing were very close together. The low mean scores of 111, 126, 124, 13 5 and the high mean scores of 141, 157, 170 did not reflect large changes between mailings. The average difference was 32.25 rating points between low mean scores and high mean scores, which was a difference in Likert rating of

.658 per question. 245 TABLE 25

LIKERT SCORES OF RESPONDENTS USING COMPUTERIZED TERMINALS DURING THE LAST THREE MAILINGS TEST GROUP ONLY

Mailing No. 2 Mailing No. 3 Mailing No. 4 Respondent Total Likert Total Likert Total Likert Number Score Rating Score Rating Score Rating

3 G* 153 3.122 159 3.245

8 151 3. 081 140 2.857

13 170 3.469 171 3.490

20 70 = 3.208

21 G 152 3.102 137 2.796

2 5 G 133 2.714 153 - 2.887

27 G 144 2.939

28 141 2.660

32 G 165 3.367 177 3. 340

41 149 3. 041

43 147 3.000 142 2.899 148 = 2.792

44 142 2.899

45 146 2.979 151 3.081 162 3.057

47 134 2.735 139 2. 623

48 143 2.918

51 G 119 2.429 124 2.531

56 G 148 3.020 144 2.939 149 = 2.811

61 147 3.000

66 G 139 2.837 144 * 2.717

67 169 3.449

69 151 3.081 141 2.878 246 TABLE 25 Continued

Mailing No. 2 Mailing No. 3 Mailing No. 4 Respondent Total Likert Total Likert Total Likert Number Score Rating Score Rating Score Rating

75 G 180 = 3.673 182 = 3.714 187 = 3.528

80 153 * 3.122

81 G 126 * 2.571

82 G 126 * 2.571 140 = 2.857 150 = 2.830

91 G 153 = 2.887

94 121 ■ 2.469 133 = 2.714

95 137 = 2.796

97 157 = 3.204 166 = 3.132

99 132 = 2.694

118 137 = 2.796

121 G 153 * 3.122

1 2 2 116 - 2.189

127 152 = 3.102

129 G 142 - 2.679

130 160 = 3. 019

131 133 * 2.714

135 172 - 3.245

136 153 = 3.122 153 = 3.122 166 « 3.132

140 G 160 = 3.265 167 = 3.408 187 = 3.528

142 160 - 3.265

143 121 - 2.469

146 121 = 2.469 175 = 3.571 192 = 3.623 247 TABLE 25 Continued

Mailing No. 2 Mailing No. 3 Mailing No. 4 Respondent Total Likert Total Likert Total Likert Number Score Rating Score Rating Score Rating

151 145 2.959 148 = 3.020

154 142 2.899

176 G 171 = 3.224

190 146 2.980

191 140 2.857 126 2. 571 136 2.566

196 147 3.000 140 2.857 158 2.981

Totals 4403 4093 3640

Average Response; 146.77 146.18 158.26

Average Likert R a t i n g : 2.995 2.983 2.986

*A "G" signifies a respondent who used his Bank- Americard to make purchases in the grocery supermarket on the computerized terminals at least once during the time period covered during the survey. TABLE 26

LIKERT SUMMATED RATING ITEM ANALYSIS OF ATTITUDINAL QUESTIONS IN WHICH THE HIGH AND LOW TWENTY-SEVEN PERCENT OF THE RESPONDENTS WERE IN AGREEMENT IN DIRECTION OF RESPONSE

STATEMENTS ANSWERED WITH RESPONSES !FAVORABLE TO CHARGE CARD USAGE

Question Mean Mean Mailing Number of Low of High Response Number and Type Statement 27% 27% Direction 1 2 3 4

1 Stores that accept bank charge 2.739 2.111 Negative X cards (Mastercharge or Bank- 2.733 2.043 Negative X Negative Americard) charge higher prices 2.800 2.043 Negative X than those who don't. 2.702 2.1 1 1 Negative X

2 Checks are becoming very diffi- 3.239 3.667 Positive X cult to cash unless you are Positive known by the store personnel.

6 Most people would stop patro­ 3.022 3.383 Positive X nizing a store if they refused Positive to cash their personal check.

8 The bank is more likely to make 2.808 2.178 Negative X a mistake with a credit card 2.778 2.128 Negative X Negative than with a personal check. 2.872 2.222 Negative

16 People are more apt to be 2.913 2.128 Negative X overcharged when paying with 2,711 2.138 Negative X Negative a bank charge card than with 2.933 2.234 Negative a check. 2.851 2.133 Negative TABLE 26 Continued

STATEMENTS ANSWERED WITH RESPONSES FAVORABLE TO CHARGE CARD USAGE

Question Mean Mean Mailing Number Of Low Of High Response Number and Type Statement 27% 27% Direction 1 2 3 4

18 Most stores act like they do 2.500 2.111 Negative X not want people to use a bank 2.596 2.289 Negative X Negative charge card...they act like they are doing people a big favor to accept a bank charge card.

23 People prefer to carry cash 2.822 2.191 . Negative X to pay their bills. 2.033 2.234 Negative X Negative

36 Most people like the idea of 3.109 3.800 Positive X using the bank money for a 3.244 3.851 Positive X Positive month free when they use a 3.289 3.745 Positive X bank charge card. 3.298 3.844 Positive X

40 Using a bank charge card is 3.467 4.064 Positive X much easier than trying to 3.378 3.872 Positive X Positive cash a check in a new store. 3.362 4.022 Positive X 3.261 4.267 Positive X

43 It is very easy to take mer­ 3.087 3.622 Positive X chandise back if you change 3.222 3.553 Positive X Positive your mind after paying for it 3.191 3.667 Positive X with a bank charge card. 249 TABLE 26 Continued

STATEMENTS ANSWERED WITH RESPONSES UNFAVORABLE TO CHARGE CARD USAGE

Question Mean Mean Mailing Number Of Low Of High Response Number and Type Statement 27% 27% Direction 1 2 3 4

4 Everyone uses a bank charge card; 1.739 2.644 Negative X it's the modern way. 1.822 2.723 Negative X Positive 1.911 2.915 Negative X

5 People spend too much money 4.237 3.178 Positive X with the new bank credit 4.311 3.298 Positive X Negative cards because they are too 4.319 3.089 Positive X easy to use.

7 Money is a nuisance and is 1.891 2.644 Negative X too easy to lose. 1.644 2.745 Negative X Positive 1.533 2.787 Negative X 1.574 2.644 Negative X

1 0 When people in front of me 4.109 3.111 Positive X in the checkout line pay with 4.222 3.362 Positive X Negative a credit card, it takes more 3.978 3.298 Positive X time. 4.234 3.422 Positive X

12 If people could charge almost 1.696 2.444 Negative X everything they needed, it 1.911 2.660 Negative X Positive would be worth a few cents 1.667 2.681 Negative X more per order. 1.723 2.733 Negative X TABLE 26 Continued

STATEMENTS ANSWERED WITH RESPONSES UNFAVORABLE TO CHARGE CARD USAGE

Question Mean Mean Mailing Number Of Low Of High Response Number and Type Statement 27% 27% Direction 1 2 3 4

13 Most people would like to be 2.067 2.979 Negative X able to make purchases at the 2.065 2.933 Negative X Positive supermarket on a bank charge card.

14 Most people find credit cards 1.826 2.800 Negative X help them balance their budget, 2.067 2.979 Negative X Negative 2.022 2.894 Negative X 2.149 2.911 Negative

17 People buy things that they 4.413 3.467 Positive X do not need because they 4,200 3.426 Positive X Negative 4.222 3.638 Positive X 4.149 3.511 Positive

19 It would be nice to be able 1.500 2.778 Negative X to charge all purchases and 1.533 2.957 Negative X Positive not have to keep track of a 1,444 2.723 Negative X checkbook or carry cash. 1.489 2.911 Negative

20 People would overspend in a 4.457 3.222 Positive X system without cash or checks 4.333 3.362 Positive X Negative but only credit cards. 4.556 3.298 Positive X 4.340 3.311 Positive TABLE 26 Continued

STATEMENTS ANSWERED WITH RESPONSES UNFAVORABLE TO CHARGE CARD USAGE

Question Mean Mean Mailing Number Of Low Of High Response Number and Type Statement 27% 27% Direction 1 2 3 4

21 There are too many credit cards 3.891 3.644 Positive to carry. 4.022 3.362 Positive Negative 4.000 3.362 Positive 3.979 3.311 Positive

*A11 respondents included in the ratings had significant differences between high and low twenty-seven percent of respondents using the T Test with a confidence level of .05, one-tailed test. Both test and control groups included in the ratings.

A T-value of 1.7 was significant at the .05 confidence level. All respondents were 252 included in the table. TABLE 27

LIKERT SUMMATED RATING ITEM ANALYSIS OF ATTITUDINAL QUESTIONS WHICH SHOW AREAS OF STRONGEST EXPRESSED FEELING*

STATEMENTS ANSWERED WITH RESPONSES FAVORABLE TO CHARGE CARD USAGE

Question Mean Mean Mailing Number Of Low Of High Response Number and Type Statement 27% 27% Direction 1 2 3 4

40 Using a bank charge card is 3.261 4.267 Positive X much easier than trying to 3.467 4.064 Positive X Positive cash a check in a new store. 3.362 4.022 Positive x

STATEMENTS ANSWERED WITH RESPONSES UNFAVORABLE TO CHARGE CARD USAGE

4 Everyone uses a bank charge 1.739 2.644 Negative X card; it's the modern way. 1.822 2.723 Negative X Positive 1.911 2.015 Negative X 1.830 3.089 Negative X

5 People spend too much money 4.237 3,178 Positive X with the new bank credit 4.289 2.979 Positive X Negative cards because they are too 4.311 3.298 Positive X easy to use. 4.319 3.089 Positive X

7 Money is a nuisance and 1.891 2.644 Negative X is too easy to lose. 1.644 2.745 Negative X Positive 1.533 2.787 Negative X 1.574 2.644 Negative X 253

*All responses were statistically significant at the .022 confidence level. TABLE 27 Continued

STATEMENTS ANSWERED WITH RESPONSES UNFAVORABLE TO CHARGE CARD USAGE

Question Mean Mean Mailing Number Of Low Of High Response Number and Type Statement 27% 27% Direction 1 2 3 4

10 When people in front of me in 4.109 3.111 Positive X the checkout line pay with a 4.022 3.362 Positive X Negative credit card, it takes more 4.234 3.422 Positive X time.

12 If people could charge 1.696 2.444 Negative X almost everything they 1.911 2.660 Negative X Positive needed, it would be worth a 1.667 2.681 Negative X few cents more per order. 1.723 2.733 Negative X

14 Most people find credit 1.836 3.800 Negative X cards help them balance Positive their budget.

17 People buy things that they 4.413 3.467 Positive X do not need because they 4.200 3.426 Positive X Negative can charge it and pay later. 4.222 3.638 Positive X 4.149 3.511 Positive X

19 It would be nice to be able 1.500 2.778 Negative X to charge all purchases and 1.533 2.957 Negative X Positive not have to keep track of 1.444 2.723 Negative X a check book or carry cash. 1.489 2.991 Negative X TABLE 27 Continued

STATEMENTS ANSWERED WITH RESPONSES UNFAVORABLE TO CHARGE CARD USAGE

Question Mean Mean Mailing Number Of Low Of High Response Number and Type Statement 27% 27% Direction 1 2 3 4

20 People would overspend in a 4.457 3.222 Positive X system without cash or checks, 4.333 3.362 Positive X Negative but only credit cards. 4.556 3.298 Positive X 4.340 3.311 Positive X

21 There are too many credit 4.022 3.362 Positive X cards to carry. 4.000 3.362 Positive X Negative

27 It is a lot faster to pay 4.239 3.111 Positive X cash and skip all that fuss 4.067 2.198 Positive X Negative with a bank charge card. 4.356 3.277 Positive X 4.106 3.222 Positive X

29 It is a good idea to have 1.956 2.809 Negative X the utility bills paid auto­ 1.936 2.778 Negative X Positive matically from your checking account.

30 People would lose control 4.391 2.889 Positive X over their personal financial 4.244 2.851 Divided X Negative matters under a no-cash, no­ 4.378 3.000 Positive X check system. 4.191 3.022 Positive X 255 32 They should have separate 4.043 3.822 Positive X checkout lanes for credit 4.000 3.745 Positive X Positive card customers. 4.043 3.733 Positive X TABLE 27 Continued

STATEMENTS ANSWERED WITH RESPONSES UNFAVORABLE TO CHARGE CARD USAGE

Question Mean Mean Mailing Number Of Low Of High Response Number and Type Statement 27% 27% Directior 1 2 3 4

33 It is a good idea to have all 1.109 2.378 Negative x bills paid automatically by 1.511 2.362 Negative x Positive the bank from your checking 1.600 2.234 Negative X account. 1.532 2.178 Negative X

34 With automatic payment of 3.826 4.000 Positive X bills by the bank, people 4.022 3.809 Positive X Positive would not be able to pay who they wanted when they wanted to pay them.

35 The bank charges too much 4.067 3.213 Positive X interest on a charge card Negative account.

37 Most people would prefer can­ 4.087 3.222 Positive X celled checks as proof of 4.022 3.298 Positive X Positive payment rather than a monthly 4.000 3.426 Positive X statement of amount paid each 4.085 3.289 Positive X firm by the bank.

42 It is too easy to get credit 4.370 3.778 Positive X cards. 4.356 3.532 Positive X Negative 4.289 3.532 Positive X

4.234 3.489 Positive X 256 TABLE 27 Continued

STATEMENTS ANSWERED WITH RESPONSES UNFAVORABLE TO CHARGE CARD USAGE

Question Mean Mean Mailing Number Of Low Of High Response Number and Type Statement 27% 27% Direction 1 2 3 4

44 Most people prefer personal 4.021 3.556 Positive service at a bank rather Positive than an automatic machine teller.

STATEMENTS WHERE THE RESPONDENTS WERE UNDECIDED ABOUT CHARGE CARD USAGE

9 It is a poor budgeting practice 4.283 2.978 Divided X to charge supermarket purchases 4.311 2.702 Divided X Negative on a bank charge card. 4.133 2.702 Divided X 4.255 2.711 Divided X

13 Most people would like to be 1.915 3.156 Divided X able to make purchases at the Positive supermarket on a bank charge card.

23 Our society is already using 4.133 2.468 Divided X too many machines and is too Negative regimented by computers.

24 It is a good idea to have the 2.804 4.000 Divided X

paycheck deposited directly to 1.978 3.106 Divided X 257 Positive the bank account by the 1.957 3.044 Divided X employer. TABLE 27 Continued

STATEMENTS WHERE THE RESPONDENTS WERE UNDECIDED ABOUT CHARGE CARD USAGE

Question Mean Mean Mailing Number Of Low Of High Response Number and Type Statement 27% 27% Direction 12 3 4

28 People prefer to carry cash to 3.152 1.978 Divided pay their bills. Negative 258 TABLE 28

LIKERT SUMMATED RATING ITEM ANALYSIS OP ATTITUDINAL QUESTIONS WHICH HAD THE HIGHEST T SCORES

STATEMENTS ANSWERED WITH RESPONSES FAVORABLE TO CHARGE CARD USAGE

Question Mean Mean Mailing Number T Of Low Of High Number and Type Statement Value 27% 27% 1234

Stores that accept bank charge 5.496 2.800 2.043 cards (Mastercharge or Bank- 5.067 2.702 2.111 Negative Americard) charge higher prices than those who don't.

40 Using a bank charge card; is much 6.087 3.261 4.367 easier than trying to cash a Positive check in a new store.

4 Everyone uses a bank charge 5.193 1.911 2.915 X card; it's the modern way. 6.250 1.830 3.289 X Positive

5 People spend too much money 5.106 4.237 3.178 X with the new bank credit 6.997 4.289 2.979 X Negative cards because they are too 5.483 4.311 3.298 X easy to use. 6.844 4.319 3.089 X

7 Money is a nuisance and is 5.593 1.644 2.745 X 259 too easy to lose. 7.521 1.533 2.787 X Positive 6.372 1.574 2.644 X TABLE 28 Continued

STATEMENTS ANSWERED WITH RESPONSES UNFAVORABLE TO CHARGE CARD USAGE

Question Mean Mean Mailing Number T Of Low Of High Number and Type Statement Value 27% 27% 1 2 3 4

12 If people could charge almost 5.598 1.667 2.681 X everything they needed, it 5.076 1.723 2.733 X Positive would be worth a few cents more per order.

14 Most people find credit cards 5.386 1.826 2.800 X help them balance their budget. Positive

17 People buy things that they do 5.458 4.413 3.467 X not need because they can Negative charge it and pay later.

19 It would be nice to be able to 6.865 1.500 2.778 X charge all purchases and not 7.438 1.533 2.957 X Positive have to keep track of a check­ 9.227 1.444 2.723 X book or carry cash. 8.956 1.489 2.911 X

20 People would overspend in a 6.865 4.457 3.222 X system without cash or checks 5.196 4.333 3.362 X Negative but only credit cards. 7.934 4.556 3.298 X 5.948 4. 340 3.311 X

27 It is a lot faster to pay 5.487 4.239 3.111 X

cash and skip all that fuss 6.111 4.356 3.277 X 260 Negative with a bank charge card. TABLE 28 Continued STATEMENTS ANSWERED WITH RESPONSES UNFAVORABLE TO CHARGE CARD USAGE

Question Mean Mean Mailing Number T Of Low Of High Number and Type Statement Value 27% 27% 1 2 3 4

30 People would lose control over 8.193 4.391 2.889 X their personal financial matters 6.762 4.244 2.851 X Negative under a no-cash# no-checks 8.378 4.378 3.000 X system. 6.092 4.191 3.022 X

33 It is a good idea to have all 5.761 1.511 2.362 X bills paid automatically by Positive the bank from your checking account.

37 Most people would prefer can­ 5.116 4.087 3.222 X celled checks as proof of 5.040 4.085 3.289 X Positive payment rather than a monthly statement of amount paid each firm by the bank.

STATEMENTS WHERE TIIE RESPONDENTS WERE UNDECIDED ABOUT CHARGE CARD USAGE

9 It is a poor budgeting practice 6.372 4.283 2.978 X to charge supermarket purchases 8.180 4.311 2.702 X Negative on a bank charge card. 6.757 4.133 2.702 X 8.151 4.255 2.711 X 261 13 Most people would like to be 5.218 2.067 2.979 X able to make purchases at the 6.092 2.000 3.170 X Positive supermarket on a bank charge 6.970 1.915 3.156 X card. TABLE 28 Continued

STATEMENTS WHERE THE RESPONDENTS WERE UNDECIDED ABOUT CHARGE CARD USAGE

Question Mean Mean Mailing Number T Of Low Of High Number and Type Statement Value 27% 27% 1 2 3 4

23 Our society is already using 8.480 3.911 2.383 X too many machines and is too 8.719 4.133 2.468 X Negative regimented by computers. 5.977 3.766 2.533 X

25 Once you get started on a 5.572 3.196 2.111 X bank charge card you can 5.088 3.089 2.149 X Negative never quit because it 'r.akes 5.174 3.267 2.255 X too much money to catch up. 5.976 3.447 2.289 X

26 It is a good idea to receive 6.986 2.200 3.596 X an automatic loan from the Positive bank in case of a checking account overdraft.

28 People prefer to carry cash 7.305 3.152 1.978 X to pay their bills. Negative

31 Parents should give their 5.914 2.087 3.333 X teenage children experience 5.682 2.133 3.255 X Positive in using a bank charge card. 5.054 2.244 3.383 X 6.187 2.213 3.556 X

39 The business, government, 5.899 3.733 2.553 X computer world knows too much 262 Negative about my personal things already. TABLE 28 Continued

STATEMENTS WHERE THE RESPONDENTS WERE UNDECIDED ABOUT CHARGE CARD USAGE

Question Mean Mean Mailing Number T Of Low Of High Number and Type Statement Value 27% 27% 1 2 3 4

41 The only ones to benefit from 6.838 3.178 2.021 X credit cards are the banks. 6.030 3.356 2.191 X Negative 6.045 3.106 2.111 X

50 People would like to have 6.004 2.043 3.044 X automatic credit in all stores Positive that accept BankAmericard.

52 The fact that supermarkets now 9.651 2.170 3.644 X accept BankAmericard is a good Positive thing.

*High T Scores show the questions where the difference between the low twenty- seven percent and the high twenty-seven percent of the respondents was greatest. The T scores were at least 5.000 for inclusion on the table, which has a confidence level greater than .0005 for a one-tailed test. All respondents were included in the ratings. 263 264 TABLE 29

LIKERT SUMMATED RATING ITEM ANALYSIS OF ATTITUDINAL QUESTIONS WHICH SHOWED NO SIGNIFICANT DIFFERENCE BETWEEN HIGH TWENTY-SEVEN PERCENT AND LOW TWENTY-SEVEN PERCENT OF RESPONDENTS AT THE .05 LEVEL OF CONFIDENCE

STATEMENTS ANSWERED FAVORABLY TO CHARGE CARD USAGE

Direction Mailing Question of Number Number Statement Agreement 12 3 4

Checks are becoming very Positive difficult to cash unless you are known by the store personnel.

IS Most stores act like they Negative XXX do not want people to use a bank charge card. They act like they are doing people a big favor to accept a bank charge card.

43 It is a very easy thing Positive to take merchandise back if you change your mind after paying for it with a bank charge card.

47 People tend to purchase Positive XXX better quality or higher- priced items at the supermarket on the trips when they know they are going to use a bank charge card to pay for their purchases.

49 Most people tend to stock Positive XXX up on specials and buy larger orders at the supermarket when they know they are going to use their bank charge card to pay it. TABLE 29 Continued

STATEMENTS ANSWERED UNFAVORABLY TO CHARGE CARD USAGE

Direction Mailing Question of Number Number Statement Agreement 1 2 3 4

Most people spend too much Positive x x money with the new bank credit cards because they are too easy to use.

32 They should have separate Positive X X X X checkout lanes for credit card customers.

34 with automatic payment of Positive X X X X bills by the bank, people would not be able to pay who they wanted when they wanted to pay.

44 Most people prefer per­ Positive X sonal service at a bank rather than an automatic machine teller.

45 People like to use a Positive X bank charge card to pay for supermarket purchases because it leaves them more money for other things.

48 They should provide a book Positive X X to keep track of all the bank credit card purchases made each month.

53 It takes longer to go Positive X through the checkstand when they use the auto­ mated terminals to accept a bank charge card. 266 TABLE 29 Continued

STATEMENTS WHERE THE RESPONDENTS WERE UNDECIDED ABOUT CHARGE CARD USAGE

Direction Mailing Question of Number Number Statement Agreement 1 2 3 4

Sometimes the monthly Undecided x bill from the bank is difficult to pay.

II Most people would stop Undecided X patronizing a store if they refused to accept their bank charge card,

22 Most people use a bank Undecided X X charge card at the supermarket any time they are short of cash.

*A T Value of 1.7 was at the .05 confidence level. 267 TABLE 30

FREQUENCY COUNT OF ALL LIKERT STATEMENTS WHERE FIFTY PERCENT OR MORE OF THE RESPONDENTS AGREED WITH THE STATEMENT

STATEMENTS ANSWERED FAVORABLY TO CHARGE CARD USAGE

Percentage of Responses in Statement Mailing Number Number Statement 1 2 3 4

Checks are becoming very 57 58 50 48 difficult to cash unless you are known by the store personnel.

Most people would stop 51 45 51 50 patronizing a store if they refused to ca3 h their personal check.

36 Most people like the idea 53 65 56 58 of using the bank's money for a month free when they use a bank charge card.

40 Using a bank charge card 75 76 69 58 is much easier than trying to cash a check in a new store.

STATEMENTS ANSWERED UNFAVORABLY TO CHARGE CARD USAGE

People spend too much 70 64 75 64 money with the new bank credit cards because they are too easy to use.

It is a poor budgeting 59 60 62 59 practice to charge super­ market purchases on a bank charge card.

10 When people in front of me 65 70 64 72 in the checkout line pay with a credit card, it takes more time. 268 TABLE 30 Continued

STATEMENTS ANSWERED UNFAVORABLY TO CHARGE CARD USAGE

Percentage of Responses in Statement Mailing Number Number statement 1 2 3 4

17 People buy things that 80 78 76 78 they do not need because they can charge it and pay later.

20 People would overspend in 71 70 68 73 a system without cash or checks, but only credit cards *

21 There are too many credit 74 71 69 71 cards to carry.

27 It is a lot faster to pay 71 75 76 74 cash and skip all that fuss with a bank charge card.

30 People would lose control 68 63 68 64 over their personal finan­ cial matters under a no­ cash, no-checks system.

32 They should have separate 73 72 75 74 checkout lanes for credit card customers.

34 With automatic payment of 84 86 78 80 bills by the bank, people would not be able to pay who they wanted when they wanted to pay them.

35 The bank charges too much 47 56 54 50 interest on a charge card account.

37 Most people would prefer 69 73 71 70 cancelled checks as proof of payment rather than a monthly statement of amount paid each firm by the bank. 269 TABLE 30 Continued

STATEMENTS ANSWERED UNFAVORABLY TO CHARGE CARD USAGE

Percentage of Responses in Statement Mailing Number Number Statement 1 2 3 4

38 With automatic payment of 58 56 53 53 bills by the bank, it would be impossible to refuse to pay a disputed bill.

42 It is too easy to get credit 83 77 76 78 cards.

44 Most people prefer personal 68 68 62 68 service at a bank rather than an automatic machine teller.

48 They should provide a book .. 67 62 62 to keep track of all the bank credit card purchases made each month.

*Both Agree and Strongly Agree responses are included in the percentages in the table. All respondents were included. Table 30 was not evaluated as to statistical significance. It was included in the Appendix because it was considered to be of interest to management personnel of retail stores, banks, and computer makers. 270 TABLE 31

FREQUENCY COUNT OF ALL LIKERT STATEMENTS WHERE OVER FIFTY PERCENT OF THE RESPONSES DISAGREED WITH THE STATEMENT*

STATEMENTS ANSWERED WITH RESPONSES FAVORABLE TO CHARGE CARD USAGE

Percentage of Statement Responses in Number Mailing Number and Type Statement 1 2 3 4

Stores that accept Bank- 60 69 57 59 Americard are higher Negative priced.

3 Sometimes the monthly 52 39 52 49 bill from the bank is Negative difficult to pay.

8 The bank is more likely to 57 56 47 48 make a mistake with Bank- Negative Americard than with a check.

18 Most stores act like they 65 63 53 58 are doing you a favor to Negat ive take your charge card.

25 Once you start a charge 57 60 55 49 card, you can never quit. Negative

28 People prefer to carry cash 64 64 58 49 to pay their bills. Negative

41 Banks are the only ones to 69 65 57 59 benefit from BankAmericard. Negative

*Both Disagree and Strongly Disagree responses were included in the table. 271 TABLE 31 Continued STATEMENTS ANSWERED WITH RESPONSES UNFAVORABLE TO CHARGE CARD USAGE

Percentage of Statement Responses in Number Mailing Number and Type Statement 1 2 3 4

Everyone uses a bank charge 69 67 63 60 Positive card; it's the modern way.

Money is a nuisance and is 81 77 80 77 Positive too easy to lose.

12 If people could charge 72 72 72 74 Positive almost everything they needed, it would be worth a few cents more per order.

13 Most people would like to 55 56 53 54 Positive be able to make purchases at the supermarket on a bank charge card.

14 Most people find credit 61 61 51 50 Positive cards help them balance their budget.

16 People are more apt to be 62 61 55 57 Negative overcharged when paying with a bank charge card than with a check.

19 It would be nice to be 75 68 67 74 Positive able to charge all pur­ chases and not have to keep track of a check book or carry cash.

24 It is a good idea to have 58 58 54 61 Positive the paycheck deposited directly to the bank account by the employer.

29 It is a good idea to have 62 67 58 70 Positive the utility bills paid automatically from your checking account. 272 TABLE 31 Continued

STATEMENTS ANSWERED WITH RESPONSES UNFAVORABLE TO CHARGE CARD USAGE

Percentage of Statement Responses in Number Mailing Number and Type Statement 1 2 3 4

33 It is a good idea to have 83 87 80 88 Positive all bills paid automatically by the bank from your checking account. APPENDIX D TABLES, MERCHANT RESPONDENTS DATA

273 274 TABLE 32

A COMPLETE LISTING OF RESPONSES TO THE MERCHANTS' QUESTIONNAIRE STATEMENT: "THE BIGGEST PROBLEM WITH THE PROGRAM WAS...... "

Number of Responses

1. The computer not working 22

2. Time 17

3. Customers did not like to wait. 4

4. Cards that did not have the magnetic strip 4

5. In the beginning it did not work well. 3

6 . No problems 2

7. Not enough cards were distributed for test

8 . Customers did not know what was going on.

9. Extra v/ork for the store manager

10. The need for double recording of sale

11. Calling in each sale

12. Human error

13. Mouthpiece on the telephone 275

TABLE 33

A COMPLETE LISTING OF THE MERCHANTS * RESPONSES TO THE STATEMENT: "THE MAJOR DISADVANTAGE OF THE PROGRAM TO THE CUSTOMER WAS. "

Number of Responses

1. Time consuming 17

2* Waiting for authorization 9

3. Wasted time when the computer was down 7

4. None 6

5. Delay 2

6 . In case of stolen cards or bad credit 2

7. They did not know what was going on. 2

8 . Embarrassment because of late payments or 2 non-approval

9. Spend too much money 1

10. Wrong kind of card 1

11. Waiting to get through when the telephone 1 line was busy

12. Cause them to pay sooner or pay service charge

13. Being told to call the bank after it was closed 276

TABLE 34

A COMPLETE LISTING OF MERCHANTS'RESPONSES TO THE STATEMENT: "THE BIGGEST PROBLEM WITH OPERATING THE CONSOLE DEVICE WAS ...... "

Number of Responses

1. Computer not operating— breakdown 18

2. None 6

3. Time 4

4. When customer did not have magnetized card, 4 we had to punch the data

5. The use of one phone 3

6 . Phones tied up 3

7. Not being able to get authorization without 2 calling the trouble number

8 . Making errors in the beginning 2

9. Using it properly 2

10. When several BankAmericard came together

11. When the computer couldn't read the card

12. Hurt ears

13. Couldn't hear the computer lady with noise of the store

14. Training new personnel

15. Getting authorization

16. Forgetting to return credit cards to customers

17. Hot used enough to keep in practice

18. Doing two operations (machine and paper)

19. Difference in operating the debits and credits 277

TABLE 35

A COMPLETE LISTING OF MERCHANTS' RESPONSES TO THE STATEMENT: "TIIE MAJOR DISADVANTAGE OF THE PROGRAM TO THE MERCHANT WAS ...... "

Number of Responses

1. Time 14

2. None 10

3. Extra paper work 8

4. Angry customers waiting in line 4

5. Learning how to operate it 3

6 . Customer inconvenience {lost business) 3

7. Customer complaints about time (customer) 2

0* Duplication of effort running it twice 2

9. Equipment did not work. 2

10* No response from the computer 1

11. Calling the order in manually 1

12. Not understanding the operation of the 1 Machine 276 TABLE 36

A COMPLETE LISTING OF MERCHANTS' RESPONSES TO THE STATEMENT: "IF I HAD A CHOICE, I WOULD CHANGE THE PROGRAM B Y ...... "

Number of Responses

1. No comment 14

2. Get better equipment (computer) 8

3. Separate phones (plenty of them) 5

4. Combine computer with receipt printer 5

5. Make it faster. 4

6 . Do it without the phones. 3

7. No change 3

8 . Forget the computer. 2

9. Better distribution of magnetic strip cards 2

10. Increasing the training for checkers 1

11. More advertising to customers 1

12. Better back-up system for when the 1 computer is down

13. Discontinue the credit cards, 1

14. Faster reconcilement procedure 1

15. Eliminate keying the card numbers. 1

16. Separate checkstands for BankAmericard 1 customers

17. Eliminate extra work. 1 TABLE 37

FREQUENCY COUNT OF RESPONSES TO LIKERT TYPE STATEMENTS BY THE OWNERS, MANAGERS, AND EMPLOYEES OF THE TWENTY-EIGHT STORES ACCEPTING BANKAMERICARD USING THE COMPUTER CONSOLES

State- Response Percentages ment Strongly No Strongly Number Statement Agree Agree Opinion Disagree Disagree

1 Most consumers seemed to 4 72 4 16 4' be aware of the City National Rank-Bank- Americard Program.

2 The program resulted in 2 18 32 30 18 developing new customers for my business.

3 Customers waiting in 24 38 22 16 0 line behind a customer using the console device seemed irritated by the delay.

4 I encouraged my custo- 4 18 42 20 16 mers to use the console device whenever possible.

5 My employees or fellow 10 16 22 42 10 employees were reluctant to use the console de­ 279 vice all through the test period. TABLE 37 Continued

State­ Res pons e Percentages ment Strongly No Strongly Number Statement Agree Agree Opinion Disagree Disagree

6 The console device signi- 4 12 16 33 30 ficantly increased the speed with which we were able to serve our custo­ mers.

7 The City National Bank- 34 34 14 12 6 BankAmericard program is a good idea.

8 Most consumers seemed to 6 38 18 32 6 understand the mechanics of how the program worked.

9 The program was more 8 18 16 38 20 trouble than it was worth.

10 I neither encouraged nor 8 62 14 14 2 discouraged my customers from using the console device.

11 My employees or fellow 10 34 16 34 6 employees were reluctant to use the console device

at the beginning of the 280 test. TABLE 37 Continued

State­ Response Percentages ment Strongly No Strongly Number Statement Agree Agree Opinion Disagree Disagree

12 The City National Bank- 2 18 30 34 16 BankAmericard program was a good idea but poorly planned and implemented. TABLE 38

MERCHANT QUESTIONNAIRE, PART C: ESTIMATE OF CUSTOMER PARTICIPATION AT THE FIRST OF THE TEST COMPARED TO PARTICIPATION AT THE END OF THE TEST

At the Start At the End Change Question of the Test of the Test None Up Down

1. What percent of your customers None 3 2% 88% .. were aware of the program? 1-15% 20 1-15% 4 16-30% 16 16-30% 2 31-45% 1 31-45% 5 46-60% 3 46-60% 13 61-75% 1 61-75% 15 76-90% 9 Over 9 0 2

2. What percent of your customers None 9 None 2 7% 76% .. understood the mechanics of 1-15% 27 1-15% 16 the program? 16-30% 7 16-30% 9 31-45% 0 31-45% 3 46-60% 1 46-60% 12 61-75% 3 76-90% 1 76-90% 2 Over 90 2

3. What percent of your customers None 9 None 1 44% 30% 8% used the program? 1-15% 21 1-15% 25 16-30% 8 16-30% 8 31-45% 4 31-45% 6 46-60% 2 46-60% 4 61-75% 1

75-90% 1 76-90% 1 282 TABLE 38 Continued

At the Start At the End Change Question Of the Test Of the Test None Up Down

Out of one hundred percent, None 10 None 6 50% 32% 6% what percent of customers 1-15% 21 1-15% 23 would you estimate were fre­ 16-30% 6 16-30% 9 quent users of the program? 31-45% 1 31-45% 2 (More than ten tines.) 46-60% 4 46-60% 2 61-75% 1 76-90% 1 76-90% 1

As a percent of the total None 15 None 19 50% 16% 22% times used— what percent of 1-15% 23 1-15% 17 the transactions did you start 16-30% 5 16-30% 4 using the console and then 31-45% 1 31-45% 3 switch to some other means of 46-60% 1 completing the transaction? 61-75% 1 61-75% 1 76-90% 1

Out of 100% of the times the None 4 None 5 38% 10% 38% device was used— what percent 1-15% 20 1-15% 27 of the times would you esti­ 16-30% 8 16-30% 9 mate there was a malfunction 31-45% 4 31-45% 3 in the system? 46-60% 5 46-60% 3 61-75% 2 61-75% 1 76-90% 1 76-90% 1

Out of 100% of the times the None 5 None 6 34% 4% 46% device was used— what percent 1-15% 17 1-15% 25 of the times would you estimate 16-30% 12 16-30% 13

there was an unreasonably long 31-45% 2 283 delay in utilizing the device 46-60% 6 46-60% 3 to complete the transaction? 61-75% 4 61-75% 1 284

TABLE 39

A COMPLETE LISTING OF THE MERCHANTS' RESPONSES TO THE STATEMENT: "RELATIVE TO THE PROGRAM, MOST OF MY CUSTOMERS THOUGHT...... "

Positive/ Number of Negative Responses

1. It was O.K. Positive 9

2. Too much time Negative 7

3. Thought very well of the Positive 6 program (good idea)

4. It was a bother. Negative 4

5. No comment 4

6 . It was O.K. if they did not have to wait.

7. They enjoyed being part of the Positive test.

8 . Didn't like the computer Positive 2

9. It was a waste of time. Negative 2

10. It was stupid for a grocery to Negative take BankAmericard,

11. Good idea for the big purchases Positive

12. Under 55.00 not a good idea Negative

13. The bank didn't trust them. Negative

14. Forget it. Negative

15. Liked the idea of no records Positive to keep

16. Not much interest Negative

17. It was convenient, Positive

18. It wasn't necessary. Negative 285

Table 39 Continued

Positive/ Number of Negative Responses

19. It helped the banks to bill the customer more quickly. ----- 1

to o • It was a progressive idea. Pos itive 1

2 1 . That I was checking their credit Negative 1

2 2 . Couldn't understand why you had to call in everyone Negative 1

23. Fear of overdrawing Negative 1

24. Liked the idea of Bank- Americard for groceries Positive 1 286 TABLE 40

A COMPLETE LISTING OF THE MERCHANTS' RESPONSES TO THE STATEMENT: "THE BEST PART OF THE PROGRAM WAS...... "

Number of Responses

1. Instant credit 7

2. Catch stolen cards 7

3. Convenience for the store 6

4. No response 6

5. Ability to catch people at their limit 4

6 . Getting our money now 3

7. When it worked like it should 3

8 . Accuracy 3

9. Fewer trips to the bank 2

10. Not having to check list of bad cards 2

11. Convenience for the customer 2

12. The experience 2

13. Fast service

14. Not to call for over amounts

15. Ability to correct our errors next day

16. when it ended

17. It brought in new customers.

18. Not having to check all their I.D.*s

19. Protect card holder against stolen cards

20. Customer bought something else while waiting

21. Customer interest 287 TABLE 40 Continued

Number of Responses

22, Good when customer forgot money 1

23. I enjoyed it. 1

24. No need to carry cash 1 288 T AISLE 41 A COMPLETE LISTING OF THE MERCHANTS' RESPONSES TO THE STATEMENT: "THE MAJOR ADVANTAGE OF THE PROGRAM TO THE CUSTOMER WAS..... "

Number of Responses

1. None 19

2. Protection in case of a lost or stolen card 11

3. Not necessary to carry cash 6

4. Convenience 3

5. Balancing their account {keep bills straight) 2

6 . Speed 2

7. Help them locate a lost card

8 . Writing less checks

9. Purchases register immediately on their account

10. Using the card for identification in cashing a check

11. Credit check— seeing if it was O.K.

12. Instant credit

13. Wider acceptance of the BankAmericard 289

TABLE 42

A COMPLETE LISTING OF TIIE MERCHANTS’ RESPONSES TO THE STATEMENT: "THE CONSUMER ADVERTISING PROGRAM SPONSORED BY CNB-BANKAMERICARD WAS ...... ”

Number of

1 . Good 20

2 . No response 10

3. Not complete (not sufficient) 7

4. We11-planned 3

5. Poor people did not know about it. 3

6 . Adequate 3

7. Very low 1

8 . Did not help us; our over-all use of 1 DankAmericard went down. They used Mastercharge.

9. Very effective, but many people did not 1 know about it. 290

TABLE 43

A COMPLETE LISTING OF THE MERCHANTS' RESPONSES TO THE STATEMENT: "THE ORIENTATION AND TRAINING GIVEN TO THE MERCHANTS BY CITY NATIONAL BANK AND BANKAMERICARD WAS...... "

Number of Responses

1 . Very good 18

2 . Good 16

3. Sufficient 9

4. No comment 4

5. Very low (too short) 2

6 . Poorly done— all employees not covered 1 291

TABLE 44

A COMPLETE LISTING OF TIIE MERCHANTS ’ RESPONSES TO THE STATEMENT: "IF I HAD ANOTHER OPPORTUNITY TO PARTICIPATE IN THE SAME TYPE OF TEST, I WOULD..."

Number of Responses

1. Take it 29

2. Turn it down 8

3. No opinion 4

4. Agree only if the time required was less

5. Try to go along with it; there are merits somewhere.

6 . Hope all BankAmericards have the magnetic strip

7. Comply for the sake of progress

8 . Ask for a machine that would telephone direct without dialing

9. If I could be sure that the program was effective. Note: No one said if this program was effective or not.

10. Probably have to if it was my job 292 TABLE 45

A COMPLETE LISTING OF THE MERCHANTS' RESPONSES TO THE QUESTION: "THE MAJOR ADVANTAGE OF THE PROGRAM TO THE MERCHANT WAS...... "

Number of Responses

1. None 9

2. At times we discovered cards that were 8 stolen or no good.

3. Secure sales....no bad credit loss 6

4. Instant credit 6

5. Getting our money credited to our account fast 5

6 . An increase in sales 2

7. Less trips to the bank 2

8 . Providing information if our people goofed 2

9. Less checks bouncing 2

10. Eliminated the necessity of carrying ourown 2 charge account

11. With reconcile you know the exact amount each day

12. Daily justification of accounts

13. Some customers liked it.

14. It was good advertising.

15. Not having to wait for an authorization number

16. No subjective judgment....bookkeepers handled it all.

17. Less money handling

18. Checking on bad cards

19. No need to O.K. a check 293 TABLE 4 6

A COMPLETE LISTING OF ALL THE MERCHANTS’ RESPONSES TO THE QUESTION: "DO YOU HAVE ANY GENERAL COMMENTS ON THE PPOGRAM WHICH WOULD HELP US TO EVALUATE ITS EFFECTIVENESS?"

Number of Responses

1. No comment given 19

2. I thought the program was a very good idea. 7

3. It should take less time. 7

4. Improve the system so it works as it should. 4

5. Combine the computer and the paper receipt 4 machine.

6 . Increase the advertising to the customer. 3

7. It was effective and well-organized. 3

8 . Increase the training. 2

9. People in line behind the user did not like 2 the delay.

10. Many of the problems were because of the 2 attitudes of the employees

11. The major problems were mechanical. 2

12. A better back-up system is needed when the 2 computer is broken.

13. People are very impatient.

14. People do not like to delay the folks behind them.

15. We knew no bad cards would be taken.

16. Do the program city-wide.

17. The computer should be used in all credit transactions, not just BankAnericard.

18. It should be easier to use. 294

TABLE 46 Continued

Number of Responses

19. It was a lot of extra bother. 1

20. The only bad thing was when it did not go through the first time. 1 21. BankAmericard users liked it. 1 22. People are unhappy that we have not continued its use. 1

23. Give each merchant a different account number. 1

24. We need quicker confirmation back from each day's deposit. 1

25. Many customers did not use their Bank­ Americard because of the computer system. 1 APPENDIX E

FIGURES

295 \s? : -Pm.*-) .1

Dublin GrifMitt* lBrrv;p ch3 ’ fl E^ld!^

►*#>« 1 fc V . . . . . l \ i I // a ,w >*f6aharwaj^

SumfM

f dhM* Unwefsityl ViewQ Marbit(| Q iGiandm " • * His L'5*? Reyoeldiluti Lincoln \ Va«** o VtlldBe

Urtwoci**!

LyafcLA COLUMBUS A N D VICINITY Slaton 0 1 4 3fflil«* _U .diqw potl FIGURE 1. Map of Columbus, Ohio showing location of research areas Test Group A 1st Mailing 2nd Mai liner 3rd Mailing 4th Mailing Oct. 4, 1971 Dec. 5, 1971 April 24, 1972 July 17, 1972

202=1001 172=851 [146=72?; 130=641 mailed Returns,. mailed Returns. mailed Returns. nailed

121=601 Test Group

50=671 Control Group Final Responses Total

Control Group

75=1001 70=931 63=841 57=764 nailed Returns^ mailed Returns mailed Returns mailed ------7 ---- -— ^

to Figure 2. Flow chart showing date, number and percent returns for each VD mailing of questionnaires one through four, and total returns. *o Respondants 100

80

60

40

20

0

Number of Cards 298

FIGURE 3. Total Number of Credit Cards Held By Test Group Pamilies Number of Respondants

15 -

Number of Uses

FIGURE 4. Total Use of Credit Cards Last Thirty Days APPENDIX F

STATISTICAL PROCEDURES

300 301

LIKERT COMPUTER PROGRAM BY RICHARD KOHR

The Likert Program is a computer routine which scores

Likert type attitude scales and will do an item analysis

for the purpose of item selection. Three options are

available for the user of the program:

Option 1: Does an item analysis for purposes of item selection. Each question on the survey is an item in the program. The program sums overall respondents on each question to determine a mean score for each item of a Likert type scale.

Option 2: Scores an attitude scale of the Likert type. The program can handle subscales composed of groups of questions and produces a score for each subscale as well as a total score for the data.

Option 3: Is a combination of Option one and Option two. The program scores the attitude scale and performs an item analysis.

The Likert Program will take positively and negatively worded questions and reverse the negative scores so that the computations on all items are comparable.

Three ways of handling omits are possible:

1. Leave the blank in and the program weights amount with a zero value.

2. Compute a mean score for each individual respondent and insert the mean score for each item omitted.

3. Punch a neutral score for all omits. A three is a neutral score in a five choice situation.

Allen L. Edwards, Techniques of Attitude Scale Construction. (New York: Appleton-Century-Crofts, Inc., 1957), pp. 152-155. 302

The method selected for the analysis done on the study was: A three was punched in each of the attitudinal cards where no answer was returned by the respondents.

The method used by the Likert Program to score a

Likert type attitude scale is to select the top twenty-seven percent of the responses and the lowest twenty-seven per­ cent of the responses. The selection procedure is described by Edwards. The procedure uses the method of summated ratings. A student T is calculated for each item, and the items are then ranked on the basis of student T value. The calculation of the student T is accomplished by the formula:

XH “ XL t = ------

<*H - V 2 +

where (XH - XH )2 = Xn 2 “ < X h >,2 .

and

X = the mean score on a given statement for the high group

= the mean score on the same statement for the low group

nH = the number of subjects in the high group n L - the number of subjects in the low group 303

Analysis of the highest twenty-seven percent of the items as opposed to the lowest twenty-seven percent of the items provides insight into the most differentiating items.

The twenty-seven percent figure used as a cut-off point in the program was built into the program by the programmer.

No reason is given as to why twenty-seven percent is used.

Edwards suggested twenty-five percent in his description.

The operations performed by the program are:

1. Figures a mean score for all scores in total

2. Figures a standard deviation for all scores in total

3. Figures a score for each respondent

4. Figures an item score by totals

5. Selects the top twenty-seven percent and the lowest twenty-seven percent of the respondents by item analysis

The data analysis performed by the Likert Program provides differentiating questions, mean scores, deviations from means, and subscale scores to be used in additional statistical analysis as explained in the research design section of the study. 304

THE McNEMAR TEST FOR THE SIGNIFICANCE OF CHANGES, A NON-PARAMETRIC STATISTICAL TEST*

The McNemar test is useful in "before-and-after"

research designs in which each respondent is used as his

own control and when the data is nominal or ordinal, Non-

parametric tests are useful, in general, when the data base

is small, as it is in the current study, or when the data

used is nominal or ordinal, that is non-parametric.

The "before" measure was the mailing sent to the re­

spondents early in the test, December 1972, The respon­

dents had been exposed to the computer terminals and had

started to use them for credit card purchases. The "after"

measurement was the next mailing, which allowed the re­

spondent five months to use the computer terminals and

develop a shopping pattern relative to them.

The hypothesis and the test follow:

a) Null Hypothesis: For the respondents who

change their use of the computer terminals, the

probability that any one respondent will change

from non-use to use is equal to the probability

that he will change from use to non-use. That

is, Pn=Pnu=l/2.

*For a complete discussion of the McNemar Test, see Sidney Siegel, Nonparamctric Statistics for the Behavioral Sciences. (New~YorTTT McGraw-Hill Book Company, 1^56), pfv. 63-67. 305 b) Statistical Test: The McNemar test for the

significance of changes was selected because

the study used two related samples which are of

the "before-and-after" type and nominal data

wore collected. c) Significance bevel: Let o<= .05. d) Sampling Distribution: An approximation to

the chi-square distribution with a correction

for non-continuity was used.

X 2 = (]a-d|-1)2 with df = 1 A + D e) Rejection Region: Reject all values of 2 y X _ 3.84 on a one-tailed probability test.

If no is not rejected then the changes are of

a random nature and are not significant. APPENDIX G

PARTICIPATING MERCHANTS

306 307 TABLE 47

THE PARTICIPATING MERCHANTS WHO HAD COMPUTER TERMINALS, LISTED BY SHOPPING CENTERS

KINGSDALE SHOPPING CENTER

Tarpy1s Argo & Lehne Jewelers (discontinued at bank's request, April 1, 1972) McClelland's Bookstore Youthland Sherwin-Williams Paint Store Easton Shoes (discontinued in mid-June) So-Fro Fabrics City National Travel (Kinney) Limited Madisons Kingsdale Pharmacy (discontinued at bank's request, April 1, 1972)

TREMONT CENTER

Arlington Visual Audio Trcmont Hardware (ended March 14, 1972) Walker’s Brown Shoes Tremont Cleaners

HENDERSON-REED CENTER

Verhoff Jewelers Jac Coiffures Gaslight (discontinued at bank's request, April 1, 1972) Village Sampler Tape Centre Sayre (closed down in mid-February) N . W . Corp. Super X Buckeye Mart (started in mid-April) Columbus Auto Club (discontinued at bank's request, April 1, 1972) Krogers Tremont Cleaners APPENDIX II

RESEARCH HYPOTHESES

308 309 LIKERT NULL HYPOTHESIS

The guiding hypothesis of Section One was that con­ sumers must perceive some personal advantage in use of a charge card on a computer terminal at retail stores or they will not use the terminal. The specific null hypotheses were of the form:

Respondents who answer the question, "Have you used the computer terminal during the last thirty days?" with a "yes" answer wiil not have positive answers to favorable Likert-type questions; that is, the item analysis on the Kohor Likert Pro­ gram rating will be 3.23 or less.

A complete matrix follows of favorable questions and the relevant behavioral questions tested in the above null hypothesis form. All squares in the matrix were computed and analyzed, which resulted in twenty-one hypothesis tests. a h rtdQ Questions Favorable ra ra x t c to Credit Cards W w fl> o ra x. X. H p * n ^ 01 LT1 u> o v£> X. -J to Mailings 1, 2 or 3 t-t 0 “ 0 r t H- 3 o It P- Likert Questions a* m r r o CARDS CREDIT TO FAVORABLE QUESTIONS LIKERT ra ra o f t 3 O a oi m 3 01 C Number of Times * ra P- 0* t ra to oi Computer Terminals 3 < Oi ra " r t Used in Last 30 r t • p . p) f t 1* " j 0 Days. Ans. BAC TESTS HYPOTHESIS NULL THEAND X 3- 3 - 3 3* r a n (ft Mailing No. 1 P- M t r * H* X . i-n H* O M ' o» Have you Used the r t 3* < 0 r t P* 0 Computer Terminals O M 3* u) n During Last 30 ra - ra M 3 Days? Ans. Yes r t 3 p* O C o o Mailing No. 2 3 3 % ra r t > n ■P 0 Have you Used the 3 H- LJ p» n * O Computer Terminals M Ql t ^ P* x* ra During Last 30 01 t-n a Days? Ans. Yes H* < p- 01 £0 0 r t Mailing No. 3 H> 3 •3 C 0 n ra 3 Si 0 P* O M 0 1— 0 P* O P> 0 P- 0 P* o Oi ft h .. It ' " t{ - tQ 01 p . o* n t - >t •» Expected Answers It 01 p* U ) W L J tO l j to LJ to LJ N) LJ KJ LJ tO (b 01 p - C 3 P- 3 01 - *3 02 0i 1 1 S 3 iQ .3 or 3.23 .3 or 3.23 .3 or 3.23 .3 or 3.23 .3 or 3.23 .3 or 3.23 3- ra 3 ra or 3.23 H , a less

less less less less less o i ra i less Rating Expected 3 * r t O' n 0 ra ra On Likert Item P* •t (ft r t Analysis

w tr1

3* p* ra o w LJ 3 ra ra it Meaning if Greater O > r t Than 3.23 T A B L E 49

DEMOGRAPHIC NULL HYPOTHESES for for purchases 30 30 days? the the computerizedterminals to pay during the last Demographic Que s t i o n s Mailing No. 2 Have you used Heavy Users of Light Users of Charge Cards Charge Cards Charge Cards Non-Users of 1 1 i

Q u e s t i o n No. 1: Are there any children living at hone?

Question No. 4 j How long have you lived at your present address?

Question No. 5: How many times have you moved in the last five y e a r s ?

Question No. 6: Are you renting, leasing, buying, or own your hone?

Question No. 7: What is the last year of school completed by the head of the house?

Question No. 8: What is your marital s t a t u s ?

Question No. 9: What is the occupation of the head of the house?

Question No. 10: Docs the lady of the house work for pay, full or part- tim e ?

Question no. 15: Age of the head of the h o u s e ?

Question No. 16: Please indicate the cate­ gory of your family's total income per year. 312

The cross tabulation technique was used as shown in the matrix above. Each of the cells in the matrix was analyzed, making forty tests of demographic influence.

Null hypotheses tested were of the form:

Respondents' use of charge cards in retail outlets as determined by question nineteen, mailing number two, did not differ with variations in the age of the respondents. APPENDIX I

DEMOGRAPHIC DATA

313 TABLE 50 314

DEMOGRAPHICS OF USERS OF LAZARUS DEPARTMENT STORE CHARGE CARDS COMPARED WITH COMPUTER TERMINAL USERS Users Demographic Response Difference Lazarus Level Characteristic Significant Users Significance Terminal 1 i

Children Yes 74% 97% Yes .001 living at No 26% 3% home

Time at No Response 6% « » No • • • • present Less than 1 year 13% 9% address 1-2 years 20% 13% 2-3 years 14% 2 2 % 3-4 years 12% 9% 4-5 years 23% 19% Over 5 years 12% 28%

Times moved Zero 38% 31% No • * • • last five Once 37% 38% years Twice 14% 2 2 % Three times 9% 9% Over 3 times 2% • •

Home Buying 71% 85% No • ■ * * ownership Rent or lease 13% 9% Own 16% 6%

Education High School grad 7% 3% Yes .05 Some college 24% 9% College grad 28% 29% Some grad work 13% 26% Master1s 12% 12% Ph.D. 8% 1 2 % Other 3% 9%

Marital Single 2% 3% No m * a- • status Married 93% 97% Divorced 2% Widowed 3% • • 315 TABLE 5 0 Continued

u •H ■U QJ O 10 •M U •pH c a) c .c u ffl o nj Q* CJ Cl ■-H o c O in in n) •H CJ ■H j-i u e D e <4-1 M tu cp cj x : CJ

Occupation Professional 28% 35% No of head of Self-employed 6% 6 % house Clerical 2% • * White Collar 18% 16% Management 26% 34% Blue Collar 1% • • Service 5% 3% Sales 9% • •

Other 5% • ♦

Lady of No 64% 80% Yes .01 house Part-time 21% 17% works? Full-time 15% 3%

Ago of Under 21 3% • * Yes .001 head of 25-34 years of age 26% 28% house 35-49 years of age 44% 72% 50-64 years of age 22% • *

Over 6 5 5% • •

Total No Response 5% 3% Yes .001 family Under $5,000 3% • • income $5,001-$10,000 22% * a $10 ,001-$15,000 45% 12% $15,001-$25,000 19% 60% Over $25,000 6% 25% TABLE 51

DEMOGRAPHICS AND CHARGE CARD USE, A CROSS TABULATION OF FREQUENCY COUNT AND NULL HYPOTHESES TESTS

& H-l U-i CN c o 0 0 U •h n tn tn 0 tn o • rH tn 'O tn O K3 ■p 0 a, o •P II u p P P iH p c e £ 5 2 rt V rt CJ rt fl tn « rt o rt c O 0 f—1 s c tn u tn u c P CJ o c o 0 in rt D D 0 0 ■H o O *rt *rl e C C "T c 0) >H o o tn O ir> tM P

i t r im •M (0 D •H O H *H tn a -P i—1 E u > u X u rt 1 p £ Un QJ £ a) tn in -h n p o • to rt II t7> (0 II u C rt it Ci t*-) > tJi 3 0 CJ RJ o to o o SZ •H u 0 JZ -H *H CJ -H O (X f s c e ^ X o c PI o £ C K CJ c tn o »-J tn

Are there any Yes 78% 97% 84% 86% 64% Yes children living at home? No 22% 3% 16% 14% 36%

How long have Less than 6% 9% • m 8% 7% NO you lived at 1 year your present 1-2 years 17% 13% 16% 12% 15% address? 2-3 years 24% 22% 23% 16% 2 0 % 3-4 years 11% 9% 10% 14% 10% 4-5 years 12% 19% 16% 10% 4% Over 5 years 30% 28% 3 5% 40% 44%

*Heavy users were respondents who possess a bank credit card, plus two or more other credit cards, and had used them eleven or more times during the last thirty days as reported in the first mailing. Light users were respondents who had one or more credit cards, but not a bank credit card, and had used cards of any kind three to ten w times during the last thirty days. Occasional or non-users were respondents who did £ not have a bank credit card and who used other credit cards two or less times during the last thirty days. TABLE 51 Continued

Question Response Mailing Mailing No. n 2 = 145 Test Test Group Users, Mailing No. 2 n = 30 Terminal Heavy Heavy Users of Charqe Cards n = 51 Light Light Users of Charge Cards n = 50 n n - 55 Occasional or Difference Level of Charge Charge Cards Non-Users of Significant Significance I 1

How many tines Zero 32% 31% 37% 40% 45% No have you moved Once 40% 38% 37% 42% 27% in the last Twice lb% 22% 18% 10% 11% five years? Three times 9% 9% 6% 4% 15% Over 3 times 3% * * 2% 4% 2%

Are you Rent or lease 13% 9% 9% 12% 9% No renting, lea­ Buying 74% 85% 73% 80% 69% sing, buying. Own 13% 6 % 18% 3% 20% or own your home?

Last year of High school 5% 3% 6% 8 % 6% Yes 01 school com­ Some college 21% 9% 16% 28% 27% pleted by the College grad 30% 29% 24% 30% 33% head of the Some post 12% 26% 19% 10% 11% house grad work Master1s 15% 12% 17% 6 % 13% Ph.D. 7% 12% 12% 4% 4% Other 10% 9% 6% 10% 6% M -J TABLE 51 Continued

tr> in (M c o 0 O U •H m tn tn 0 u-) in CJ m rH tn T3 in na O 'O 4J 0 a o tl u 14 U (4 .H 14 e o c G Z rt cj rt CJ rt rt tn rt rt u rt g 0) 0 H s c m O in a c U CJ o c IM u o IQ u C 'tn to D o 0 o •H 0 0 •H ■H c V) G G * CJ >—I £ h « i u C S' 3 CJ 0) m a tn o a x: A 0 0 j : •H -H a O a ~ G Eh e : CJ c t-3 O c c 2 CJ c tn a »J tn

What is your Single 3% 3% 4% • ♦ • • No marital status? Married 94% 97% 96% 96% 87% Divorced 2% ♦ * • • 2% 4% Widowed 1% m a • • 2% 7%

What is the Professional 30% 35% 26% 30% 24% Yes .05 occupation of Self-employed 5% 6% 10% 4% 4% the head of Clerical 2% * « • • 2 % 6 % the house? White collar 2 0% 16% 16% 24% 16% Management 26% 34% 35% 18% 26% Blue collar • « m * • • » ♦ 4% Service 4% 6% 4% 8% 4% Sales 10% 3% 8% 10% 7% Other 3% • • 2% 4% 9%

Does the lady No 66% 80% 78% 62% 54% Yes .001 of the house Part-time 15% 17% 16% 22% 24% work for pay? Full-time 19% 3% 6% 16% 22% CJ b* ao TABLE 51 Continued

U-l IT 14-1 c im tn D C rir t -H Q tn a +J *H e U > u -C n « 1 U G *H « tn in -h it u 0 . (0 IQ II t r to n o G (0 II f . lU 3 QJ Q) c o in o o .c ■h .e 0 0 J3 ■H *H a; h E Significance G E C Eh D E ss o c u c c E O C tn q Level of

A g e of the Under 24 2% 9 • 2% 9 9 2% .001 head of the 25-34 years 27% 28% 28% 30% 22% house 35-49 years 47% 72% 49% 48% 31%

50-64 years 19% 9 9 17% 18% 32%

65 and over 1% • 9 4% 2% 6%

No opinion 4% 9 9 • * 2% 7%

Please indicate No response 11% 3% 6% 8% 18% .01 the category Under $5,000 • • 9 9 9 9 9 9 2% of your family's $5,001-510,000 3% 9 9 • * 6% 4% total income $10,001-$15,000 18% 12% 16% 22% 27% per year. $15,001-25,000 48% 60% 55% 50% 33% Over $25,000 20% 25% 23% 14% 18% TABLE 52

CROSS TABULATION OF SELECTED DEMOGRAPHICS WITH LAZARUS CHARGE CARD USE MAILING NUMBER FOUR

Number of Times Used Lazarus Charge Card

o c c 0 U Q O 1-t G> c 0 0 u 3 > X > O > o c > JZ O * H •H 0)

Response £ h fc. Response No W VI O V) Question 2 O h l 1 i

I. Are there Yes 10% 2 0 % 15% 14% 17% 4% 6% 4% 1% 9% any children No 10% 18% 15% 22% 7% 8% 13% 5% • 4 2% living at home?

4. How long No Response 9% 13% 11% 22% * * 11% 11% « 4 • 4 22% have you Less than 1 yr. 10% 15% 10% 15% 20% 10% 10% 5% • • 5% lived at 1-2 years 5% 12% 9% 16% 23% 5% 10% 10% 4 4 10% your present 2-3 years 4% 15% 14% 24% 24% 5% 5% 5% * 4 4%

address? 3-4 years 16% 10% 2 1 % 27% • • 5% 5% 5% • 4 11% 4-5 years 11% 2 0 % 22% 11% 14% 6% 8% • • 3% 5% Over 5 years 27% 26% 17% 10% 10% » » 5% 5% • 4 a 4

5. How many Zero 9% 29% 19% 10% 14% 5% 7% 2 % 2% 3% times have Once 10% 13% 15% 21% 12% 5% 5% 7% • * 12%

you moved in Twice 8% 25% 10% 14% 24% * * 14% 5% • 4 4 4 the last 5 Three times 2% 12% 14% 29% 21% • « 15% 7% 4 4 4 4

years? Over 3 times • • 1% • * • 4 a 4 2% TABLE 52 Continued

Number of Tines Used Lazarus Charge Card Question Response Response NO Hone One Two Three Four Five Six Seven Over Seven

6 . Are you Rent or lease 15% 2 0 % 20% 15% 25% • • • • 9 9 9 9 5% renting, lea­ Buying 13% 15% 13% 18% 13% 6% 9% 5% 1 % 7% sing, buying. Own 16% 16% 16% 8% 16% 4% 8% 8% 9 9 8% or own your hone?

7. Education No Response 100% of head of Grade School 100% the house High school grad 2 0 % 10% 20% 20% 10% 10% 10% Some college 8% 23% 20% 18% 5% 10% 3% 10% 3% College grad €% 13% 18% 13% 6 % 10% 10% 4% 4% 11% Some grad work 5% 1 0 % 10% 15% 15% 2 0 % 10% 00 5% 10% Master * s 20% 20% 9 9 15% 20% 5% 9 9 5% 9 9 Ph.D. 00 7% 2 2 % 29% 7% 7% 7% 14% 9 9 7% Other 8% 15% 33% 24% • » 8% 8 % 8% 9 9 9 9 8 . What is Single 50% 9 9 9 9 25% 9 9 25% 9 9 9 9 9 9 9 9 your marital Married 8% 9% 9% 9% 2 % 26% 8% 9% 1% 13% status? Divorced 33% 9 9 33% 33% Widowed 40% 20% 00 40%

u> KJ TABLE 52 Continued

Number of Times Used Lazarus Charge Card

c 0 0 0 tn tn •H c c 0 o in a c .

z a Three Four Seven Seven

2 cn Over ! One ! i i 1 Two '

9. Occupation Professional 6% 16% 14% 2 0 % 10% 4% 8% 4% 4 4 10% of head of the Self-employed 00 11% 11% 11% ■ 4 22% 11% 11% 4 4 22% house Clerical 50% 25% 25% 4 4 * 4 White collar 14% 6% 20% 2 2 % 10% 9% 3% 6% 3% 3%

Management 13% 15% 30% 8% 8% 3% 3% 3% 4 4 17% Blue collar 100% Service m » 50% 25% 13% 13%

Sales 7% 7% 12% 21% 4 4 21% 7% 14% 4 4 14% Other 25% 2 5% 4 4 25% • 4 4 4 12% 1 4 4 4 13%

11. Does Mo 8% 15% 14% 17% 8 % 12% 8% 7% 4 4 12% the lasy of Full-time 20% 8% 36% 16% • 4 8% 4% 8% 4 4 4% the house Part-time 6% 23% 9% 14% 14% 11% 3% 6 % 3% 9% work?

12. Age of No Response 25% • • • 4 25% 25% 4 4 25% 4 4 4 4 4 4 the head of Under 24 50% 50% the house 25-34 years old 10% 2 9% 2 1 % 9% 6% 9% 5% 2 % 3% 5%

35-49 years old 7% 9% 13% 17% 9% 11% 7% 7% 4 4 16%

50-64 years old 9% 14% 12% 18% 6 % 18% 3% 12% 4 4 9% 65 and over 33% 4 4 16% 16% 4 4 4 4 16% 4 4 4 4 16% U) t o t o TABLE 52 Continued

Number of Times Used Lazarus Charge Card

e QJ QJ 0 in to *H c C 4J 0 0 QJ c c cn a a QJ QJ Jh QJ a U CJ QJ » to C c 0 U s > X > QJ > 3 QJ o a) 0 c 0 •*-t *H Q) > 0 a e e z c P ft. Cn tn tn 0 tn

16. Category Ho Response 25% 50% 25% 25% 25% of total Under $5,000 50% 50% family income $5,001-10,000 10% 33% 13% 10% 7% 10% 3% 2% 4% 4% $10,001-15,000 7% 9% 14% 18% 10% 10% 7% 7% .. 15% $15,001-25,000 9% 14% 12% 26% 17% 3% 11% 00 9% Over $25,000 33% • • 16% 17% 16% 16% 16% No opinion 100% 323 324 TABLE 53

CROSS TABULATION OF DEMOGRAPHICS BY THREE CATEGORIES OF USERS: HEAVY, LIGHT, AND NON-USERS OF BANK CREDIT CARDS, MAILING NUMBER ONE

in tn tn ID u -4 II o a c x: <8 s M tn nS II 3 II U G) p 0) a> •H U M II) a a: c 3 G 0 0 3

1. Arc there Yes 84% 8 6 % 64% any children No 16% 14% 36% living at hone?

4 * How long Less than 1 year • • 8% 7% have you lived 1-2 years 16% 1 2 % 15% at your present 2-3 years 23% 16% 2 0 % address? 3-4 years 10% 14% 1 0 % 4-5 years 16% 1 0 % 4% Over 5 years 35% 40% 44%

5. How many 2ero 37% 40% 45% tines have you Once 37% 42% 27% moved in the Twice 18% 1 0 % 1 1 % last 5 years? Three times 6% 4% 15% Over three times 2% 4% 2 %

6 . Are you Rent or lease 9% 12% 9% presently ren­ Buying 73% 80% 69% ting, leasing, Own 18% 8% 2 0 % buying, or do you own your own hone?

11. What is High school grad 6% 8 % 6 % the last year Some college 16% 28% 27% of school com­ College grad 24% 30% 33% pleted by the Some post-grad 19% 1 0 % 11 % head of the Master*s 17% 6 % 13% house? Ph.D. 12% 4% 4% Other 6% 1 0 % 6%

12. What is Single 4% ♦ * your marital Married 96% 96% 87% status? Divorced • * 2 % 4% Widowed » • 2% 7% 325

TABLE 53 Continued

m tn « m t-i u a> 01 « h G 0) w tn G O ui D D O 1 G -H G rH o •H C 4J 0 > t» n •P tn tn o tn in a > X BJ t4 a> in m ii o> n o o G o 0) O « o x X G *4 G 0 0 3

14. What is the Professional 26% 30% 24% occupation of Self-employed 10% 4% 4% the head of the Clerical • • 2% 6% house? White collar 16% 24% 16% Management 35% 18% 26% Blue collar • • • • 4% Services 4% 8% 4% Sales 8 % 1 0 % 7% Other 2 % 4% 9%

16. Does the No 78% 62% 54% lady of the Part-time 16% 22% 24% house worh out­ rull-time 6 % 16% 22% side the home for pay?

41. Please in­ Under 24 2% • * 2% dicate the age 25-34 years old 28% 30% 22% range within 35-49 years old 49% 48% 31% which the head 50-64 years old 17% 18% 32% of the house 6 5 and over 4% 2 % 6 % is now. No opinion • • 2% 7%

42. Please in­ Under $5,000 • * 2% dicate the $5 ,001-10,000 * » 6 % 4% income category $10,001-15,000 16% 22% 27% that best des­ $15,001-25,000 55% 50% 33% cribes your Over $25,000 2 3% 14% 18% family's total No opinion 6% 8% 16% income per year. TABLE 54

DEMOGRAPHICS CROSS TABULATED AGAINST TOTAL NUMBER OF TIMES ANY CREDIT CARD WAS USED DURING THE LAST THIRTY DAYS PREVIOUS TO MAILING NUMBER FOUR

Number of Times Any Credit Card Used During Last Thirty Days Question Response None 1-5 6-10 11-15 16-20 21-25 26-30 Over

1. Number None 19% 19% 27% 16% 8% 3% • ft 8% of children One 11% 23% 27% 23% 12% 4% • ft ft * at home Two 4% 29% 13% 13% 10% 4% 9% 16% Three 16% 8% 29% 10% 13% 13% 5% 13% Over three 17% 6% 27% 27% 8% 6% • ■ • «

3. Age of None 16% 19% 27% 17% 8 % 3% ■ ft 8% oldest child 0-5 years old 13% 21% 30% 13% 8% • ft 4% 8% living at 6-10 years old 11% 22% 15% 14% 14% 11% ft ft 11% home 11-15 years old 7% 15% 20% 13% 10% 8% 13% 13% 16-20 years old 10% 20% 16% 23% 10% 3% ■ ft 16% Over 20 years 7% • ft • ft 14% 14% 14% ft * ft •

4. How Less than 1 yr. 33% 22% 11% 11% • • 11% • • 11% long have 1-2 years 17% 13% 29% 13% 13% 8% 4% 4% you lived 2-3 years 12% 18% 12% 15% 18% 6% 6% 12% at your 3-4 years 11% 22% 22% 17% ft ft 6% • • 22% present 4-5 years 7% 7% 20% 27% 13% 7% 7% 13% address? Over 5 years 9% 17% 24% 17% 9% 4% 3% 9%

5. How Zero 9% 22% 23% 16% 10% 6% 3% 9% many times Once 9% 14% 21% 16% 11% 9% 2 % 14% have you Twice 18% 14% 9% 18% 9% 9% 5% 18% 326 moved in the Three times 33% 13% 27% 7% 20% • ft « • ft ft

last 5 years? Over 3 times • » 42% 17% 16% • • ft ft • « ft ft TABLE 54 Continued

Number of Times Any Credit Card Used During Last Thirty Days Question Response None 1-5 6-10 11-15 16-20 21-25 26-30 Over 30

6. Are you Rent or lease 23% 29% 18% 12% ft ft 6% 6% 6% renting, lea­ Buying 10% 17% 19% 18% 13% 7% 3% 11% sing, or buy­ Own 12% 16% 32% 12% 8% 4% 4% 12% ing your home?

7, What is High School grad 10% 30% 10% 20% • ft ft ft • • 30% the last College 17% 25% 23% 13% 10% 3% • ft 5% year of College grad 13% 13% 21% 17% 4% 13% 4% 11% school com­ Some grad work 5% 19% 9% 23% 9% 10% 5% 13% pleted by Master's 20% 15% 15% 5% 15% 5% 10% 15% head of the Ph.D. 17% 11% 23% 10% 26% 3% 3% 7% house?

8. What is Single 25% ft • 50% ft • 25% ft ft • ft ft • your marital Married 11% 17% 20% 17% 10% 7% 6% 12% status? Divorced * • 33% 33% 33% ft « ft ft « ft # #

Widowed 20% 40% # • 20% 20% • • ft ft ft •

9. What is Professional 7% 11% 24% 17% 22% 7% ft • 13% the occupa­ Self-employed 22% ft ft 11% 22% 11% 11% • • 22% tion of the Clerical 25% 25% 25% 2 5% • ft ft ft head of the White collar 10% 30% 33% 7% 3% 10% 3% 3% house? Management 10% 21% 14% 12% 5% 9% 2% 12%

Blue collar • • 100% • a ft • ft • « • ft ft # ft

Services 25% 12% 37% 13% ft ft ft ft • • 12% 327 Sales 13% « * 13% 19% 20% ft » 7% 19%

Other 25% 25% 13% 25% 12% * • ft ft ft • TABLE 54 Continued

Number of Times Any Credit Card Used During Last Thirty Days Question Response None 1-5 6-10 11-15 16-20 21-25 26-30 Over 30

11. Does No 10% 15% 20% 20% 12% 7% 4% 8% the lady of Part-time 14% 12% 23% 9% 12% 3% 6% 9% the house Full-time 16% 29% 21% 12% 4% 8% « » 4% work full or part-time?

15. Age of No Response 50% • « • ♦ 25% • » 25% 9 9 * • the head of Under 24 years ■ • 50% « ■ 50% • 4 • * • * • * the house 25-34 years old 16% 22% 28% 11% 9% 2 % 5% 7% 35-49 years old 7% 15% 19% 15% 13% 7% 8% 15% 50-64 years old 11% 24% 19% 27% 5% 3% • • 8% 65 and over 33% » • 16% * » 33% 17% • • • •

16. Total No Response 43% 14% • » 29% • * 14% • • • « yearly in­ Under $10,000 * • 20% 80% • » * • • * * * • • come of the $ 1 0 , 001-15,000 19% 24% 26% 11% 5% • • 3% • ♦ family $15,001-25,000 11% 13% 22% 18% 12% 6% 1% 14% Over $25,000 3% 16% 17% 6 % 18% 15% 10% 16% 328 329 TABLE 55

FREQUENCY COUNT OF DEMOGRAPHICS BY TEST GROUP, TERMINAL USER GROUP AND CONTROL GROUP, MAILING NUMBER TWO

Term. Test User Control Question Response Group Group Group

1. Are there Yes 78% 97% 74% any children living at home? NO 22% 3% 26%

2 . IIow many None 20% 3% 24% children are One 15% 16% 18% living at home? Two 27% 28% 26% Three 2 2 % 44% 22% Four 8% • • 6% Five 6 % 3% 2 % Six 2 % 6 % * *

3. Age of No Response 20% 3% 24% oldest child 0-5 years 18% 22% 4% living at 6-10 years 17% 24% 16% home? 11-15 years 24% 28% 26% 16-20 years 17% 2 1 % 24% Over 20 years 4% • « 6%

4. How long Less than 1 year 6 % 9% 4% have you lived 1-2 years 17% 13% 10% at your present 2-3 years 24% 2 2 % 12% address? 3-4 years 11% 9% 10% 4-5 years 1 2 % 19% 2 % Over 5 years 30% 28% 62%

5. How many Zero 32% 31% 62% times have you Once 40% 38% 20 % moved in the Twice 16% 22% 8 % last 5 years? Three times 9% 9% 10%

Over 3 times 3% * • 9 9

6 . Are you Rent or lease 13% 9% 2 % renting, lea­ Buying 74% 85% 4% sing, buying Own 13% 6% 74% or own your Other • m « « 20% home? 330 TABLE 55 Continued

Term. Test User Control Question Response Group Group Group

7. What is No Response 1% 3% ft ft

the last year Grade School ft a • » 2 % of school nigh School grad 5% 3% 8% completed by Some College 21% 9% 32% the head of College grad 30% 29% 24% the house? Some grad work 12% 2 6% 14% Master's 15% 12% 6 % Ph.D. 7% 12% 10% Other 9% 6% 4%

8 . What is Single 3% 3% « * your marital Married 94% 97% 90% status? Divorced 2 % • ft 2%

Widowed 1% • ft 8%

9. What is Professional 30% 35% 2 2 % the occupa­ Self-employed 5% 6% 6 %

tion of the Clerical 2 % • » 4% head of the White collar 20% 16% 14% house? Management 26% 34% 24%

Blue collar • • ft * 4% Services 4% 6% 6% Sales 1 0 % 3% 8%

Other 3% » • 1 2 %

10. Does No Response 3% 3% • « the lady of Yes 34% 19% 38% the house NO 63% 81% 62% work?

11. Does No Response 6 6 % 80% 62% the lady of Full-time 19% 3% 24% the house Part-time 15% 17% 14% work full or part-time?

12. Occupa­ No Response 66% 80% 62% tion of the Professional 13% 6% 16% lady of the Clerical 10% 6% 12% house? White collar 4% ft ft 4%

Management 3% * ft 2 % Services 2 % 4% ft • Sales 1 % 4% 2 %

Other 1 % ft ft 2 % TABLE 55 Continued 331

Term. Test User Control Question Response Group Group Group

13. How many No Response 4% « « • m cars does your One car 2 2 % 1 2 % 42% family own? Two cars 63% 75% 44% Three cars 8% 9% 14% Four cars 3% 4% » •

14. Have you No Response 4% 9 9 9- • used your bank Yes 26% 1 0 0 % 4% charge card on No 61% • * 90% the new compu­ Don't know 9% • • 6 % terized termin­ als in Upper Arlington?

15. Age of No Response 4% • « 9 9 the head of Under 24 years 2% •- m 0 9 the house? 25-34 years old 27% 28% 22% 35-49 years old 47% 72% 36% 50-64 years old 19% •- • 30%

65 and over 1% m m 1 2 %

16. Please No Response 5% 9 0 2 % indicate the Under $5,000 * • m * 2 % category of $5,001-10,000 3% • * 4 1 your family's $10,001-15,000 18% 1 2 % 32% total income $15,001-25,000 48% 60% 38% per year. Over $2 5,000 2 0 % 25% 16% No opinion 6% 3% 6 % 332 TABLE 56

SELECTED DEMOGRAPHICS CROSS TABULATED WITH USERS OF BANKAMERICARD ON THE COMPUTER TERMINALS DURING THE LAST THIRTY DAYS OF THE CITY NATIONAL BANK TEST

Mailing Humber 4

Total Test Term. Non- Question Response Group Users Users

1. Are there Yes 78% 85% 76% any children living at home? NO 22% 15% 24%

4. How long No Response have you lived Less than 1 yr. 6 % 1 0 % 5% at your present 1-2 years 17% 30% 13% address? 2-3 years 24% 15% 21% 3-4 years 11% 15% 10% 4-5 years 12% 15% 0% Over 5 years 30% 15% 44%

5. How many Zero 32% 2 0 % 44% times have you Once 40% 45% 32% moved in the Twice 16% 2 0 % 13% last five Three times 9% 15% 8% years? Over 3 times 3% • * 3%

6 . Are you Rent or lease 13% 2 0 % 9% presently Buying 74% 70% 7 5% renting, lea­ Own 13% 1 0 % 16% sing, buying, or do you own your own home?

7. What is No Response 1 % * a . 5% the last year of Grade school • a a a .5% school completed High school 5% 10% 5.5% by the head of Some college 21% 25% 24% the house? College grad 30% 15% 30% Some orad work 1 2% 2 0 % 12% Master's 15% 10% 12.5% Ph.D. 7% 1 0 % 8 .0% Other 9% 1 0 % 7.0%

8 . What is Single 3% • a 3% your marital Married 94% 1 0 0 % 92% status? Divorced 2% • a 2% Widowed 1% • • 3% 333 TABLE 56 Continued

Mailing Number 4

Total Test Term. Non- Question Response Group Users Users

9. What is Professional 30% 40% 26% the occupation Self-employed 5% 5% 6 % of the head Clerical 2 % * a 3% of the house? White collar 2 0 % 1 0 % 2 0 % Management 26% 35% 24% Blue collar « * • * # a Services 4% 5% 5% Sales 1 0 % 5% 1 0 % Other 3% • • 5%

11. Does the No 6 6 % 85% 61% lady of the Full-time 19% 15% 15% house work? Part-time 15% • » 24%

12. Age of No Response 4% 5% 2 % the head of Under 24 2 % 9 * 1% the house 25-34 years old 27% 40% 24% 35-49 years old 47% 40% 45% 50-64 years old 19% 15% 23%

6 5 and over 1% 9 9 5%

16. Please No Response 5% 5% 4% indicate the Under $5,000 • • a • 1% category of $5,001-10,000 3% • * 4% your family's $10 ,001-15,000 18% 15% 24% total income. $15,001-25,000 48% 65% 42% per year. Over $25,000 2 0 % 15% 19% TABLE 57

SU'IMARY OF NULL HYPOTHESIS TESTING FOR DEMOGRAPHIC CHARACTERISTICS OF THE RESPONDENTS

Difference Difference Test Group Significance Test Group Significance Question Versus Control Level Versus Users Level

1. Are there any None None Yes .05 children living at Users more hone?

3. Age of oldest 16-20 years .05 0-5 years 05 child living at home Control group- 6-10 years 05 older children more users have children 0-10 years old

4. How long have 1-2 years .05 4-5 years 05 you lived at your test group- More test More users present address? shorter-- group— over 5 years 1-2 years .01

5. How many times Zero .01 Twice 05 have you moved in Control— more Users-more the last 5 years? stationery-- .02 mobile once, twice .05 TABLE 57 Continued

Difference Difference Test Group Significance Test Group Significance Question Versus Control Level Versus Users Level

6 . Are you renting, Rent 05 .05 leasing or buying or Test rents more own your hone? Test group— buying more; 01 Users buying .05 Control group— more; test owns more group owns more

7. What is the last Some colleqe 05 Some college .05 year of school com­ College grad 05 Test group— pleted by the head high of the house? Master1s Graduate work & Test group— 05 Ph.D. .05 more education Users— highest

8 . What is your Widowed 05 No None marital status? Control— highest

9. What is the Professional 05 Management .05 occupation of the Test— hiahest Users— highest head of the house?

10. Does the lady of No None Users— .05 the house work for pay? Least number work 335 TABLE 57 Continued

Difference Difference Test Group Significance Test Group Significance Question versus Control Level Versus Users Level

11. Does lady work None Users .02 full or part-time? Least full­ time work

12. Occupation of lady No None No None of the house

13. How many cars One car .02 One car .05 does your family Two cars .02 Two cars .05 own? Test group— Users— most more cars

15. Age of head 35-49 years .05 ««*•«••• of house 35-49 years .01 50-64 years .05 50-64 years .01 65 and over .01 Users— Test group— younger younger

16. Please indi­ $10,001-15,000 .05 $10,001-15,000 .05 cate category of $15,001-25,000 .05 $15,001-25,000 .05 family's total income Over $25,000 .05 Test group— per year Test— higher lower incomes incomes 336 *See TableSOfor actual demographics of all groups. A difference of 6% points between the test group and either the control group or the terminal user group is significant at the .05 confidence level using chi square test. APPENDIX J

ADVERTISING SCHEDULE

AND SAMPLE ADVERTISEMENTS

337 TABLE 58 338

DATES AND PAGE NUMBERS OF ADVERTISEMENTS RUN IN THE UPPER ARLINGTON NEWS DURING THE BANKAMERICARD TEST

DATE PAGE DATE PAGE

October 2 1 , 1971 P. 6A January 6 , 1972 p. 3B

October 28, 1971 P* 19B January 13, 1972 p. 3B

November 4, 1971 P- 1C January 20, 1972 p. 3B

November 18, 1971 P* 8A, January 27, 1972 p. 9A

November 25, 1971 P. 2B February 3, 1972 p. 3B

December 2 , 1971 P. 3C February 10, 1972 p. 2B

December 9, 1971 P* 3C February 17, 1972 p. 1C

December 16, 1971 P. 3B March 2, 1972 p. 16B

December 23, 1971 P. 3C March 9, 19 72 p. 3C

December 30 , 1971 P* 3B March 16, 197 2 p. 3C Iftrt 1 1*1*11* AIM r.t.TON M*| 2. 1'iT* Ml I%ttS©0Mi3 339 «T 1

W D U H pfflJi] ? ” ® 1 Li w -7 m v m w n ' q T; iiviJ^U UUjJjL'aUu o o*

' j ; ( O f i m ~ Attention Upper Arlington residents: You’ve made national headlines for 4 months during your test of BankAmericard Authorization Terminals and new Bank24. Now we need your opinions. Many will be published in the Upper Arlington news. *lf yours are published, City National will pay you $5.00.

You've helped us complete the fust halt 11c.rnit‘ ntty. red u cin g h o u is Ol p a p e rw o rk* ol an historic two part I’upciimenl A' one At the same time, you've boon helping us pari. merchants in the Ticriuml. hinrtsdale, test new Dnnk?4, tin kill service totally and Mcndrtsoii Rcfd shrpinm i centers mil lin.itie, hanking nia'ltm es at City Na- have been usmq new Bank Amcncard au­ Itunal s Kmnr.rl.ile anil Henderson Niiqeilt thorization terminals When yon use your oltier's V/e o p e d |},ink/’-l to make liank- BankAmer ic.m d with those merchants, inn mote convenient lot customers than money is transferred instantly and clee- ever Imtorc.

HERE ARE A FEW THINGS WE THINK HAVE ALREADY BEEN ACCOMPLISHED:

+ Hottrt (it j*,?j yrt*r&tk f»rfn r ttm'n.tit'd thtfWQh j/jtjrO' Ati>ryritQfi iVc can toff frcm tfto It&ec* thr (li*- tt m oiT f>M'* v\cr t'ftotv f*W*« < i» C’tfy ft.if.-Pit.tf *«t jMJ'tfs, ft.v wtttifitAw < igdin&t lc*.\ rr Vit'ft ymir njii*Ar*rf\t ;ittf ft r*m c^t account*. ftiW fooblttft + ftonAing #m$ froiomr more con* to/ cash

NOWTFTLL US WHAT YOU HUNK AflOUTAI I TUIiL W ICI L TO MU PAUL TOMLINSON. MAHKLTING ADMINIGI HA (OR OiT Y NAI It )NAL HANK AND lFUJfiTCO.. 1O0 LAST ITUOAU SI riLE T COI IJMHUS. OHIO A:t?IC> City Bank asftl Trias?! Consjpany 340 December 2.1871 LITER ARUXCTO\ NEWS

Now, flai aSi'ii to hanEi w h e n I wa n t to, 24 hours a day.

Harley Rouda Pt«*Jeott H*rf

. City National's Bank74 solves one maior problem that everyone has (tom time lo time: getting cash when you need cash, anytime, night or day There have been limes when my agents needed money to take a client to lunch The new Bank?4 solves lhat ptoblem completely All you have to do now is use the Bank24 cart) | I work long hours and ollcn can't g fl to die bank. Now, t'm able to bank when I want to, 24 hours a day. I can make deposits as well as withdrawals, and even pay bills through the Bank24 l‘tn also very happy that I won't have to go to some­ t o r t one to cash a check (or me Cashing a check can be exas­ perating When you linally get the money, you wonder and il it was worth the trouble W ith 8ank24, I get money Trust Company when I need it fidartt Du pom hiMinct Co|OM4»

As an Upper Arlington resident. YOU arc also a participant in this lest lhat may shape the future of banking and shopping We are interested in your comments Please call us with your views and ideas, or any questions, at 461-898&. or Stop by our Kmgsdate Office at 3250 Tremont Hoad 341

•S' iP— '^ARUNCTOvj^^^^^

Your communtiy has been selected for » unique lesi This ■$ another *n * tenet of *ds where Uppt* A*hnp- £f ior> are* r«sidenti rip lfin ihen rfid io n i lo Ihte test '

/

V. * #*4r

f. f Mrs 0rf ^3 Aschinyor Upper Arlington Housewife }raatf J f

We asked Mrs Belva Asrhtnger her thoughts on the Upper Arlington test being conducted by City National Bank . . .

Upper Arlington is an ideal location lo icsl a now con­ cept in banking It is a progressive rny with most residents willing to try new ideas I have talked W illi my neighbors and friends who are interested and excited to (earn and ' C M i g use City National's new banking experiment Also. I have found the merchants participating m the test to be very rece p tive The convenience of banking after hours is very bene­ ficial lo us There are many times when I pist cannot bank during regular banking hours or when the lines are long and I gist do not have time to wad Uank24 will really be ffifflEBik helpful rn solving these problems Each of us as individuals should take a step forward to ai'.sl clear away the paper clutter we are causing with pur Trust Company checks, sales slips and receipts I really want to do my rrfe'K O*potrt Ce'tortf** part in helping lo reduce the amount of paper that must be processed in present day banking procedures After ihis trial period is Over we may fmd lhal what we tested here in Upper Arlington could be used everywhere in the c o u n try

As an UppOf A*4mgion rcs»dcrM. YOU XT£ * p^rtiCFp.inl in this lest thrTl m ay $h*pr 1hc tutor* of hanking iinrf shopping W* arp interested m your comments Please call us with yo.ir views and ideas or any questions, a( 461-6938. or Slop by our Kirnjsd.de Office at 32bO Tremcm Road A P P E N D I X K

CONSUMER COMMENTS

342 343 TABLE 59

FREQUENCY COUNT OF THE VOLUNTARY RESPONSES IN ANSWER TO THE STATEMENT: "YOUR COMMENTS ON THIS STUDY ARE ENCOURAGED...... '* MAILING NUMBER FOUR

Response Type by Percent Of : Category of Comment All Responses Other

Any comments Yes = 65% No * 33% given

Comments about Favorable = 4% Unfavorable - 24% 1 % time

Comments about Favorable *= 17% Unfavorable = 21% 3% credit cards

Comments about Favorable * 9% Unfavorable - 15% 1 % government and compu­ ters

Preference for Positive = 3% Negative = 14% old way to pay with cash and checks

Computer ter­ Positive «* 9% 1 % minals could be improved

Totals: Favorable = 42% Unfavorable = 74% 6 %

NOTE: Responses total to more than 100% because some respondents gave more than one answer. *A11 responses categorized into five general response areas. APPENDIX L

PUBLIC AND PRIVATE DEBT

344 TABLE 6 0 345

NET PUBLIC AND PRIVATE DEBT, END OF CALENDAR YEAR, 1916-52*

Public and End of Private, Public Private Year Total Total Total

1916 82.1 5.6 76. 5 1917 94.4 12.0 92.4 1918 117.4 25.9 91.5 1919 128. 0 30.8 97. 2 1920 135.4 29.6 105. 8

1921 135.8 29.6 106.2 1922 140.0 30. 5 109.5 1923 146.3 30. 0 116. 3 1924 153.0 30. 0 123. 0 1925 162.6 30.3 132.3

1926 163.8 29.9 139.9 1927 177.3 29.7 147.6 1928 185.9 29. 8 156.1 1929 190.9 29. 7 161.2 1930 191.9 30. 6 160.4

1931 181.9 34.0 147.9 1932 174.6 37.9 13G.7 1933 168. 5 41.0 127. 5 1934 171.4 46.3 125.1 1935 174.7 50. 5 124.2

1936 180.3 53. 9 126.4 1937 182.0 55.3 126.7 1938 179.6 56. 5 123.1 1939 183.2 58.9 124.3 1940 189.9 61.3 128.6

1941 211.6 72.6 139.0 1942 259.0 117. 5 141.5 1943 313.6 169.3 144. 3 1944 370. 8 226. 0 144. 8 194 5 406.4 266.4 140.0

1946 397. 5 243.3 154.2 1947 418.0 237.7 180.3 1948 434.3 232.7 201.6 1949 447.9 236.7 211.2 1950 488. 2 239.4 248.8

♦Survey of Current Business, Septenber, 1953, p. 14. 346 TABLE €0 Continued

Public and End of Private, Public Private Year Total Total Total

1951 521.2 242.0 279.2 1952 552.7 250.0 302.7 APPENDIX M

GLOSSARY OF TERMS

347 348

GLOSSARY OF EFTS ACRONYMS*

ACH Automated Clearing House

APD Automated Payment and Deposit

ATM Automated Teller Machine

BASE BanitAmericard Service Exchange

CACIIA California Automated Clearing House Association

CBCT Customer BankCommunications Terminal

CDM Cash Dispensing .Machine

COPE Committee on Paperless Entries (of Atlanta)

DDA Demand Deposit Account

DDD Direct Deposit of Dividends

DDP Direct Deposit of Payroll

ECR Electronic Cash Register

EDP Electronic Data Processing

EFT Electronic Funds Transfer

EFTS Electronic Funds Transfer System(s)

EMT5 Electronic Money Transfer System

EPS Electronic Payments System

GACHA Georgia Automated Clearing House Association

GIRO European-Style Credit-Based Payments System

INAS Interbank National Authorization System

ISO International Standards Organization

*Taken from Mark G, Binder, EFTS: Electronic Funds Transfer Systems (Port Washington, New York, 1'97 5 )7 pp. 8 8 -W .------349

MAPS Monetary and Payment Systems Planning Committee

MDTS Modular Data Transaction System

MICR Magnetic Ink Character Recognition

MINTS Mutual Institutions National Transfer System, Inc.

NACHA National Automated Clearing House Association

NEACH New England Automated Clearing House Association

NETS Nebraska Electronic Transfer System

NOW Negotiable Order of Withdrawal

PAL Preapproved Loan

PAP Prearranged Payments

PAT Prearranged Transfers

PEP Paperless Electronic Payments

PIN Personal Identification Number

POS Point-of-Sale

POW Pay Order of Withdrawal

RCPC Regional Check Processing Center

RSU Remote Service Unit

SCOPE Special Committee on Paperless Entries (of California}

SPC Switching and Processing Center

SWIFT Society for Worldwide Interbank Financial Telecommunication

TMS Transmatic Money System

UPC Universal Product Code wot'? Western Order of Withdrawal APPENDIX N

PRESS RELEASE

350 351

FIILQD PRESS RELEASE FOR RELEASE 1/10/74

Federal Home Loan Bank Board Chairman Thomas R. Bomar today announced that the Board has adopted effective January 9 a temporary regulation permitting federally- chartered savings and loan associations to apply for Board approval to operate experimental place-of-business funds transfer systems.

A place-of-business funds transfer system includes the use of on-line computer terminals located in places of business other than office facilities of the association. A customer of the association may use the terminals to make deposits to or withdrawals from a savings account.

The regulation and any Board approval under the regu­ lation terminate on July 9, 197 4. The regulation requires that the terminals used in the system must be located within the State in which the homo office of the association is located and within 50 miles of the home office or a branch office of the association.

In conjunction with this, Board Chairman Bomar also announced that the Board has approved on a six-month experimental basis the place-of-business funds transfer system plan of First Federal Savings and Loan Association of Lincoln, Nebraska. This plan includes the installation of terminals in two supermarkets in Lincoln and is to be operational on January 14.

The Board intends later this month to propose, for public comment, regulations to permit federally-chartered associations to operate place-of-business funds transfer systems on a permanent basis.

Bomar explained that the temporary regulation and the experimental pilot program in Lincoln are designed to pro­ vide valuable information to the Board and to the public which will assist the formulation of final permanent regu­ lations on this matter.

The text of this new temporary regulation is attached and will be published in the Federal Register during the week of January 14. LIST OF REFERENCES

352 LIST OF REFERENCES

Books and Published Monographs

Baitels, Robert B. The Development of Marketing Thought. Homewood, 111. : Richard D. Irwin, Inc., 1962.

Beckman, Theodore N. Credits and Collections, Management and Theory. ith edNew Y o r k : McGraw-Hill, 1962.

Binder, Mark G. EFTS: Electronic Funds Transfer Systems. New York: Kennikat Press, 1975.

Bonk, Roger S. Bank Cards: Addition or Erosion. New York: National Retail Merchants Asso- ciation, 1975.

Booz-Allen and Hamilton, Inc. EFTS, A Retail Banking Tool. Lake Success, New York: Eastern States Bank Card Association, 1975.

Dunkelberg, William C. and Johnson, Robert W. EFTS and Consumer Credit; Working Paper No. 2 (Revised). Lafayette, Ind.: Krarmert Graduate School of Industrial Administration, Purdue University.

Engel, James F.; Kollat, David T.; Blackwell, Roger D. Consumer Behavior. 2nd ed. New York: Holt, Rinehart, Winston, 1973.

Green, Paul E. and Tull, Donald S. Research For Marketing Decisions. 2nd ed. Englewood Cliffs, N. J.: Prentxce Hall, Inc., 1970.

Griffin, Al. The Credit Jungle. Chicago: Henry Regnery Company, 1971. 354

Books and Published Monographs Continued

10. Haines Publishers. Inc. The Haines' Columbus City and Suburban Criss-Cross Directory. “ Columbus, Ohio: Haines Publishers, Inc., 1971.

11. Hendrickson, Robert A. The Cashless Society. New York: Dodd, Mead and Company, 1972.

12. Kelley, Eugene J. and Lazer, William. Managerial Marketing: Policies, Strategies and Decisions. Homewood, 111.: Richard D. Irwin, Inc., T T 7 T T

13. Kohr, Richard L. Likert Attitude Scale Analysis. University Park, Pennsylvania: Pennsylvania State Computation Center, 1969.

14. Mandell, Lewis. Credit Card Use in the United States. Ann Arbor: Braun 6 Brumfield, T972.

15. Mathews, Lee If. and Slocum, John W . , Jr. Marketing Strategies in the Commercial Bank Credit Cara Field. Chicago: Bank Public Relations and Marketing Association, 1968.

16. Nystrom, Paul H. Economics of Retailing. Rev. ed. New York: The Ronald Press, 1930.

17. Richardson, Dennis w. Electronic Money: Evolution of an Electronic Funds Transfer System. Cambridge, Mass. : The MIT Press, 1970.

18. Seligman, Ben B. The Potentates: Business and Businessmen in American History. New York: Dial"PTe'sV,' "1971” ------

19. Seligman, Edwin R. A. The Economics of Installment Selling. New York: Harper Brothers Publishers, 195?.

20. Shaw, Marvin E. and Wright, Jack M. Scales For the Measurement of Attitudes. New Y o r k ! : McGraw- Hill BooY Co. , 1'9'67.-----

21. Shay, Robert B. and Dunkelburger, William C. Retail Store Credit Card Use in New York. New York: Columbia University Press, 1975. 355

Books and Published Monographs Continued

22. Siegel, Sidney. Nonparametric Statistics For the Behavioral Sciences. New York: Mcfiraw - H ilT Book Company, 1956.

23. Supermarket Institute. Summary of Supermarket Point-of-Sale Systems. Chicago: Supermarket Institute, 1974.

24. Time, Inc. A New Way of Buying. New York: Time, Inc., 1972. 356

Articles

25. MABA To Help Treasury With Direct Deposit of Social Security Checks." Banking 66 (October 1974): 134.

26. "A Court Test Delays Electronic Banking." Business W e e k , July 7, 1975, p. 21.

27. "A Fight For A Piece of the Cashless Society." Business Week, March 24, 1972, p. 60.

28. "A $5 00,000 POS Investment Worthwhile, Toy Firm Says." Electronic News 20 (January 13, 1975): 21.

29. "A New Beginning: Words Become Deeds." United States Investor/Eastern Banker, October 20, 19*5',' p. 23.

30. "APOSS Technical Triumph, Economic Question Mark?" Progressive Grocer 51 (December 1972):36-39.

31. "Are We Ready For UPC?" Progressive Grocer 51 (March 1973): 23-26.

32. Ashe, Harold J. "what About Charge-Card Credit For Your Clients?" Veterinary Medicine/Small Animal Clinician, June 1968.

33. "Automated Checkout Feared By Customers." Boca Raton (Fla.) N e w s , 13 October 1975, p. 5.

34. "Automation Clause in New Contract." Supermarket News 24 (May 26, 1975):21.

35. "Bank Cards Make a Minor Dent in Majors' Financing." Merchandising Week 105 (February 19, 1973) :1.

36. "Bank Cards Take Over the Country." Business Week, August 4, 1975, pp. 44-54.

37. "Bank Lobby Cashes In On Grass-Roots Power to Sway Legislators." Wall Street Journal, 30 March 1976, p. 1.

38. "Banks Becoming Largest Users of Computerized Data Service." Commerce Today 2 (September 18, 1972):23. 357

Articles Continued

39. Berk, M, A.; Dunbar, C. W.; and Hobson, G. C. "Design and Performance Considerations For The Retail Store System." IBM Systems Journal 14 (January 1975) :18-22.

40. Blackwell, Roger D.; Hawes, Douglas K.; and Talarzyk, Wayne W. "Americans' Use of Credit Cards: A Nationwide Study of Female and Male Attitudes." Bulletin of Business Research (The Ohio State University) 50 (February '197£) :5-7.

41. Brandemihl, Arnold. "Automated Bank System For Credit Verification." Credit World, December 1968.

42. Brumback, Nancy. "Cashless Society Heralded By EFT?" Supermarket News 24 (May 19, 1975)si.

43. ______. "Disagree On EFT Potential, Agree On Working Together." Supermarket News 25 (May 10, 1976):19.

44. ______. "Industry Meeting to Map No-Item Pricing Strategy." Supermarket News 24 (March 17, 1975):1.

45. ______. "Scanner Progress Picture For Year Has Been Mixed." Supermarket News 25 (April 19, 1976):4, 18.

46. . "Unions Hit On Item Prices." Supermarket News 24 (June 9, 1975):1.

47. Brumback, Nancy and Pick, Walter. "Funds Transfer Units Gaining Ground." Supermarket News 24 (May 19, 1975) :12.

48. "California Bill Could Hurt POS Sales.” Electronic News 20 (March 17, 1975):11.

49. "California's Step Towards Checkless Banking." Business Week, September 9, 1972, p. 56.

50. "Canada: A Move to Shut IBM Out of Data Network." Business Week, February 9, 1974, p. 42.

51. "Central States Health and Live Selling Via Credit Cards." Nation's Business 60 (October 1972):23. 358

Articles Continued

52. "Chase Manhattan Will Open Tellerless Branch." Payment Systems Newsletter 4 (December 1973): XT

53. "Checkless Banking Is Available, But Public Sees Few Advantages." Wall Street Journal, 18 November 1975, pp. 1, 27.

54. "Checkless Society Is At Least 5-10 Years Away, ABA Told." Management Adviser 12 (January/ February 1974)

55. "Coding Applications Expand With New Optical Scanning System." Purchasing 75 (June 3, 1971): 72-75.

56. Coester, Eileen. "N. J. Consumer Representative Rapped For Criticism of ECR." Supermarket News 24 (June 9, 1975):4.

57. Cohen, Ben. "Lucky Unveils Scanner; Clerks, Shop­ pers Protest." Supermarket News 24 (February 3, 1975):1.

58. ______. "Shoppers at Lucky Cool to Shelf Pricing Only." Supermarket News 24 (February 17, 1975) : 1.

59. "Two Price-Mark Bills Killed In Cali- Fornia." Supermarket News 24 (March 17, 1975): 36.

60. "Comptroller Issues Revised CBCT Regulations; FDIC Says They're Hot Branches." Payment Systems Newsletter 6 (May 1975):l-2.

61. "Computer Banking Goes to Supermarkets." Advertising Age 45 (May 19, 1975):67-68.

62. "Computer Finds a Home in Retailing." Chain Store Age: Store Planners' Issue 47 (July 1971) : 78-79.

63. "Computer Terminals Replace Cash Registers At More Retail Stores." Wall Street Journal, 20 November 1972, pp. 1, 30. 359

Articles Continued

64. "Computerized Checkout Plan Faces Conflict in Conqress." Advertisinq Aqe 46 (March 10, 1972):17.

65. "Computerized Checkouts Will Help Consumers Too." Deseret News (Salt Lake City, Utah) 3 May 1975, p. A-26.

66. "Conference of State Bank Supervisors Warns of Fed Involvement in EFTS." Payment Systems News­ letter 3 (April 1972):3.

67. "Continental Illinois Extends EFT Network; FNB Chicago Pilots POS System," Payment Systems Newsletter 7 (March 1976) :3.

68. "Corts' Atmosphere Lures Big Order Buyer." Pro­ gressive Grocer 41 (October 1962):139,

69. "Court Rules Banks Must Obey States on Remote Hook­ ups." Wall Street Journal, 24 March 1976, p. 8 .

70. Cox, Edwin B. and Giese, Paul E. "Now It's the Less- Check Society." Harvard Business Review 50 (December 1972):6-18.

71. Coyle, Joseph S. "EFT's Promise, From a Bad Check Breakthrough to Food By Credit." Progressive Grocer 55 (February 1976):39.

72. . "Update Profit Talk How Scanning Will Boost Front-End Productivity and Back Room Out­ put." Progressive Grocer 55 (May 1976) :39-41.

73. "Credit Card Buying On Way Out of SF." Supermarket News 106 (June 30, 1969) :22.

74. "Credit Card Fails to Hike Volume; Ralphs Drops It." Supermarket News 24 (September 29, 1975):22.

75. "Credit Card Use For Bail, Fines Starts Tuesday." Columbus (Ohio) Dispatch, 20 August 1972.

76. "Credit in Supermarkets." Non-Foods Merchandising, March 1967, p. 65.

77. "Credit Plan Works For New York Supers." Progressive Grocer 47 (January 1967):94. 360

Articles Continued

78. "Credit Purchases Now 60% of Big Store Sales, NRMA Told." Merchandising Week 105 (September 17, 1973):1.

79. "Credit Sales Stage Comeback With House Charge Up­ swing Clientele." Journal of Retailing 50 (Winter 1973-74) : 2 3 ' ^ T T .

80. Crosby, H. Douglas. "Secrecy Vs. Confidentiality." Data Management 12 (September 1974) : 18-19.

81. "Customers Respond Well to Tests of Card Terminals." Banking 63 (December 1971):46.

82. "Customized Scanner System Ordered By Safeway." Supermarket News 24 (April 21, 1975):16.

83. DeLoach, D. B. and O ’Rourke, A. D. "Use of Bank Credit Cards in Grocery Stores." Agricultural Publications (University of California at Berkeley) October 1969, p. 10.

84. "Dialogue: Implications of the Atlanta Payment Study." Bank Administration 48 (October 1972): 16-22.

85. Dimaria, Eugene. "See Full Canada UPC Use 5-10 Years Off." Supermarket News 25 (May 17, 1976) :2, 12.

86. "Direct Deposit Results, A Set-Back For Associations." Savings & Loan News 87 (April 1976):56-60.

87. Easson, Lelia. "Ne\* Developments in Consumer Credit." Journal of Home Economics, December 1959, pp. 846-848.

88. "ECR System Zooms Control in High Volume Store." Supermarket Management, Fall 1975, pp. 26-28.

89. Edwards, Audry. "Poor Unit Pricing Held Hurting UPC." Supermarket News 25 (April 19, 1976): 2, 24.

90. Edwards, George D. "A Quick Fix For the Bank Card." The Bankers' Magazine 154 (October 1971) :84-85.

91. «Ef t Faces Big Chicago Set-Back." Progressive Grocer 55 (February 1976):20. 361

Articles Continued

92. MEFT News in Perspective." Datamation 21 (April 1975):116.

93. Eirinberg, Allan B. "Checkless Electronic Banking Challenges Ad Men, Marketers." Advertising Age 46 (May 26, 1975):38-39.

94. ______. "Computer Banking Goes to Supermarkets." Advertising Age 46 (May 19, 1976):67-68.

95. "Electronic Front-End Nearer to Reality." Chain Store Age 47 (May 1971) :106-113.

96. "Electronic Funds Transfer Systems: Broad Issues and a Sepia-Colored Stagecoach." Datamation 20 (February 1972):80-82.

97. "Electronic Money: The Atlanta Project." Savings and Loan News 83 (August 1972):36-40.

98. "Equipment, the Front-End; Lots of Choice." Pro­ gressive Grocer 55 (May 1976):48-57.

99. "Experts See Big Chains Using POS." Chain Store Age 48 (February 1972):31-32.

100. Fairchild, Gary F. and Sporleader, Thomas L. "Consumer Credit in the Retail Food Industry: Attitudinal Analysis and Market Segmentation." Technical Report 71-7 of the Department of Agricultural Economics and Rural Sociology, Texas A & M University, 1971.

101. “FHLBB Extends EFT Tests and Third Party Transfers to Electronic Means." Payment Systems News­ letter 7 (March 1976):4.

102. "FHLBB Proposed Funds Transfer Pilots Regulation Brings Various Responses FHLBB Sues Re. TMS." Payment Systems Newsletter 6 (May 1975):l-2.

103. "Fifteen PDS Wisconsin Stores Using Charge Card Program." Supermarket News 16 (April 3, 1967): 32.

104. Flato, Linda. "Checking on EFTS." Computer Decisions, May 1975, pp. 22-26. 362

Articles Continued

105. "FNCB Gives Customers Direct Access to Checking Account Data." Payment Systems Newsletter 5 (April 1974):3.

106. Fogel, Howard H. "Credit Cards: Blight or Blessing For Supermarkets?" Supermarketing, August 1969, p. 51.

107. Ford, William F. "Less-Check, Less-Cash Society." Nation's Business 61 (October 1973) :43-47.

108. "G.E. Chairman Says It Wasn't IBM Moves That Drove G.E. Out of Computer Business." Wall Street Journal, 10 December 1975, p. 6.

109. "Giant Food Spells Out Its Hard Savings From Scan­ ning." Progressive Grocer 55 (April 1976) : 20-2 1 . 110. "Groceries On the Cuff Give Boost to Sales." Business W e e k , August 20, 1966, p. 134.

111. "Grocery Credit Offered in Phoenix." Boca Raton (Fla.) News, 1 June 1975, p. C-l.

112. Gruber, William. "Floating Check Game Not Amusing To Banks." Chicago Tribune, 18 June 1975, p. 4.

113. Harakas, Margo. "Grocery Price Coding Needs Consumer Okay." Sun Sentinel (Fort Lauderdale, Fla.), 1 July 1975, p. B-4.

114. Hecker, Arthur. "Direct Deposit Social Security Program." Record FSLL 10 (July 1975):9.

115. Hough, Patricia. "How the Directors Kept Singer Stitched Together." Fortune 92 (December 1975): 98.

116. Huck, Leonard W. "Making the Card the Customer.” Banking 68 (May 1976):3-7.

117. "Industry Group Recommends Item-Price Marking: Some Scanner Users Say They Won't Go Along." Super­ market News 25 (March 29, 1976):1, 4-5.

118. "Ingle’s Accepts Credit Purchases." Supermarket News 16 (November 20, 1967):24. 363

Articles Continued

119. "Item Pricing Holds Its Own in California." Super­ market News 24 (May 26, 1975):21.

120. "It's Really Here: The Electronic Transaction at the Cash Register." Savings and Loan News 87 (May 1976) :62-66.

121. Jacobs, Donald P. "Technology in Banking's Future." Bankers1 Magazine 156 (Summer 1973) :23-26.

122. Johnson, David P. "Bill-Paying By Computer Flops After Trial Run." The National Observer, 16 February 19 67, pp. 6-7.

123. Kramer, Robert L. and Livingston, W. Putnam. "Cashing In On the Checkless Society." Harvard Business Review 45 (September 1967):141-148.

124. Lipis, Allen J. and Budd, George A. "The Present Economics of the Payment System." The Magazine of Bank Administration 49 (January 19 73) : 12-19.

125. "Louis' SF Bay-Area Chain Offering Master Credit Card." Supermarket News 16 (August 21, 1967).

126. McEnroe, P. V.; Huth, H. T.; Moore, E. A.; and Morris, W. W. III. "Overview of the Supermarket System." IBM Systems Journal 14 (January 1975): 26-34.

127. Markstein, David L. "Is A Checkless Society Ahead?" American Dairy Review, March 1969, pp. 44-46.

128. ______. "The Pros and Cons of Credit Cards For the Hospital Field," Modern Hospital, June 1970, pp. 70-73.

129. "Maryland Weighs Item Price Measure." Supermarket News 24 (March 17, 1975):36.

130. "Mixed Results So Far For Food Store Credit Cards in Northern California." Weekly Digest, October 14, 1967. ------

131. "Money Goes Electronic in the S & L's." Business Week, January 13, 1968, pp. 56-76. 364

Articles Continued

132. "Money Machines." Boca Raton (Fla.) News* 1 June 1975, p. C—1.

133. "Most Oil Companies Halt Credit-Card Promoting." Miami (Fla.) Herald * 24 February 1974.

134. Muse, William V. and Kegerreis, Robert J. "Techno­ logical Innovation and Marketing Management: Implications for Corporate Policy." In Mana­ gerial Marketing: Policies, Strategies and Decisions, p. 194. Edited by Eugene J. Kelly and William Lazer. Homewood, 111. : Richard D. Irwin, Inc., 1973.

135. "New Way to Save Money— Pay Cash." U.S. News and World Report 79 (June 3, 1974) :T(f.

136. "News You Can Use in Your Personal Planning." U.S. News and World Report 80 (June 16, 1975):69.

137. "No Privacy With Bank Records." Boca Raton (Fla.) News, 4 June 1976, p. 10.

138. "On-Line Phones Off the Hook." Datamation, February 1974, p. 81.

139. "Paperless Credit Within Decade Foreseen by ABA." Data Management 12 (February 1974) :15.

140. Patrick, Robert L. "Privacy, People and Credit Services." Datamation 20 (January 1974):48-50.

141. Plummer, Joseph T. "Life-Style Patterns and Com­ mercial Bank Credit Card Usage." Journal of Marketing 35 (April 1971):36-40.

142. "President Signs Bill Allowing NOW's In All of New England." Payment Systems Newsletter 7 (March 1976):3.

143. "Presidential Unit Urges More Responsive Credit System For Consumers." Commerce Today 2 (November 27, 1972):5-6.

144. "Produce Enters the Electronic Age." Progressive Grocer 54 (March 1975):64-66. 365

Articles Continued

145. "Proof Positive Electronic Check-Out Devices Pay Off For Buyers, Vendors." Barron's, 13 May 1974, pp. 3-20.

146. "Pros-and-Con3 of Buying on Credit." The Evening Bulletin (Columbus, Ohio), 11 October 1972.

147. "Push-Button Banking Is Running Into Trouble." U.S. News and World Report 80 (July 7, 1975): 7f>-78.

148. Reich, Kenneth E. "Whatever Else It Is, Electronic Money Is Not a Customer Service." Savings and Loan News 84 (April 1973):66-67.

149. Reistad, Dale L. "The Coming Cashless Society." Business Horizons 19 (Fall 1976) :23-32.

150. "Retailers and Bankers Talk to Each Other." Datamation 22 (January 1976):110-118.

151. "Retailers Ask Active EFT Role." Supermarket News 24 (June 9, 1975):1, 29.

152. "Retailers List Funds Transfer Problems." Super­ market News 24 (September 22, 1975):14-15.

153. Ross, Irwin. "The Credit Card's Painful Coming of Age." Fortune 88 (October 1971) :77-156.

154. "St. Louis Bank Told to Lay Off Two Tellers— Electronic Ones." Wall Street Journal, 19 November 1975, p. 4(H

155. Savir, D. and Laurer, G. L. "Characteristics and Decodability of the Universal Product Code." IBM Systems Journal 14 (January 1975):16-18.

156. "Shell Upsets A Credit Tradition." Business Week, June 17, 1972, p. 28,

157. "Singer Pull-Out A Bit of Deja Vu." Datamation 22 (February 1976):108-109.

158. "Six Issues That Are Changing Our Business." Progressive Grocer 52 (March 1973):41-45. 366

Articles Continued

159. Slocum, John W. and Mathews, Lee H. "Social Class and Income as Indicators of Consumer Credit Behavior." Journal of Marketing 34 (April 1970):69-73.

160. Smith, William D. "The Checkless Society: Human Beings Causing the Chief Delays." New York T i m e s , 21 May 1967.

161. Soltan, Frank. "Consumers Found Short on UPC Data." Supermarket News 25 (April 5, 1976) :1, 14.

162. "Study Shows That NOW Accounts Replace Checking Accounts." Payment Systems Newsletter 7 (March 1976) 73.

163. "Supermarket Banking." St. Petersburg (Fla.) Times, 15 January 1974, p. D-3.

164. "Survey of Buyinq Power." Sales Management 10 9 (June 10, 1970) :121-123.

165. "Sweeping Bank Reform Bill Passed By Senate." Sun Sentinel (Fort Lauderdale, Florida), 12 December 1975, p. 1.

166. Taylor, Hal. "Moss Seeking Votes For Item Pricing Bill.” Supermarket News 25 (June 25, 1976): 1 , 26.

167. Telthorst, Ann. "Customers Score Giant On Lack Of Item Pricing." Supermarket News 24 (January 27, 1975):1.

168. ______. "Sales Brisk At Food Giant With Shelf Only Prices." Supermarket News 24 (February 17, 1975):1.

169. ______. "Senate Unit Asks Chains For Item Pricing Opinions." Supermarket News 25 (April 5, 1976): 1 , 16.

170. "The Bank Credit Card With a $10 Annual Fee." Business Week, March 3, 1973, p. 3.

171. "The Data Explosion at Point-of-Sale." Chain Store Age, Executive Edition 49 (February 1973):19-30. 367

Articles Continued

172. "The Implications of the Atlanta Payment Study.** Magazine of Bank Administration 48 (October T5T2y:T

173. "The Latest EFTS Network Is a $35 Million Project." Datamation 21 (July 1975):90-91.

174. "The Quickened Pace of Electronic Banking." Business Week, September 7, 1973, pp. 116-124.

175. "The Retailers Go Electronic." Business Week, August 18, 1972, pp. 38-39.

176. "Things Look Good For POS in *75." Datamation 21 (April 1975):40.

177. Townsend-Zi1lner, Norman. "The Bank Charge Account Plan and Retail Food Marketing." Bulletin of Agricultural Economics Research, October 1960, p? ; '8$-io4.— ------

178. "Trade Finds More Reasons To Go Slow On Scanning." Progressive Grocer 55 (March 19 76) :21.

179. "Twin City S & L Plans Place-of-Business Funds Transfer Service." Payment Systems Newsletter 5 (April 1974):5.

180. "Two K-Marts Join Credit Card Plan." Supermarket News 16 (October 1967):49.

181. "Under 30*s Lead Most of Credit Cards in Survey." Supermarket News 20 (October 25, 1971) :26.

182. "Universal Product Code Nears Reality." Progressive Grocer 51 (January 1972):91-94.

183. "UPC Scanning a Success at Marsh’s." Progressive Grocer 54 (March 1975):59-63.

184. "Update: Inside Washington." Progressive Grocer 55 (May 1976):40-41.

185. "U.S. Restricting EFT Operations by National Banks." Supermarket News 24 (May 19, 1975):25.

186. "Vons Takes Scanner Step." Supermarket News 24 (May 19, 1975):10. 368

Articles Continued

187. Walker, Orville C. and Sauter, Richard F. "Consumer Preferences For Alternative Retail Credit Terms: A Concept Test of the Effects of Consumer Legi­ slation." Journal of Marketing Research 11 (February 1974):96-98.

188. Weinstein, Steve. "Electronic Front-End Benefits Stressed But Careful User Appraisal Advised." Supermarket News 25 (March 22, 1976):1,

189. "We'll All Be Using Them One Day." The Economist 255 (London), September 23, 1972, pp. 59-60.

190. Wessling, Jack. "Unions to Kroger: Price All Items." Supermarket Mews 25 (April 19, 1975): 2, 14.

191. Wetterhaus, Allan. "The Cashless, Checkless Society: On Its Way?" Computers and Automation, November 1972, pp. 14-lin

192. "Whatever Happened to the Cashless Society?" The Morgan Guarantee Survey, June 1972, pp. 1-3.

193. White, Kenneth J. "Consumer Choice and Use of Bank Credit Cards: A Model and Cross-Section of Results.” Journal of Consumer Research 2 (June 197 5)710-18. '

194. Wightman, Richard. "EFTs Pose Hazards to Consumer: Knauer." Supermarket News 25 (April 26, 1976): 2, 29.

195. . "Scan System Guides Set For Labor Negotiations." Supermarket News 24 (June 9, 1975):1.

196. Zimmer, Robert C. "Responses to Fed. Categorized." Payment Systems Newsletter 5 (June 1974).

197. Zwiebach, Elliott. "Savings Seen Scanner Seller." Supermarket News 24 (April 28, 1975):!. 369 Public Documents

198. Board of Governors of the Federal Reserve System. Bank Credit Cards and Check Credit Plans. Washing ton, D^ C.": U . S. Government Print ing Office, July 1968.

199. Bomar, Thomas R. "Press Release of Federal Home Loan Bank Board." Washington, D. C., January 10, 1974. 200. "Consumer Credit in the United States." Business Statistics. Washington, D. C.: U.S. Government Printing Office, 1955, pp. 221-238.

201. "Credit-Card and Check-Credit Plans at Commercial Banks." Federal Reserve Bulletin. Washington, D. C.: U.S. Government PrintingOffice, September 1973, pp. 646-653.

2 02. "Evolution of the Payments Mechanism." Federal Reserve Bulletin. Washington, D. C.: U.S. Government Printing Office, December 1972, pp. 1009-1012. 203. Historical Statistics of the United States, A Statistical Abstract^ Wash ington, D . C .: Department of Commerce, Bureau of the Census, 1961, pp. 654-690. 204. Mitchell, George W. "Statement to Congress Before the Subcommittee on Banking and Currency." Federal Reserve Bulletin. Washington, D. C.: U .S . Government Printing Office, December 1973, pp. 874-878.

205. Monthly Review. Federal Reserve Bank of San Fran­ cisco, September 1967.

206. National Commission on Consumer Finance. Consumer Credit in the United States. Washington, D. C.: U .S . Government 'Printing office, 1972.

207. "Public and Private Debt in the United States 1916- 1942." Survey of Current Business. Washington, D. C.: U.S. Government Printing Office, May 1943, pp. 10-26. 208. "Short and Intermediate-Term Consumer Credit 1916-52." Survey of Current Business. Washington, D. C.: U.S. Government Printing Office, September 1953, p. 14. 370

Unpublished Materials

209. Bonk, Roger S. "Bank Cards: Addition or Erosion." National Retail Merchants Association, New York. (Mimeographed.)

210. "Check Cashing By Pood Chains." NAPC & AT&T, Chicago, Illinois, October 1971. (Mimeo­ graphed .)

211. Cox, Edwin B. "Technology Assessment of a Less- Cash/Less Check Society." Paper delivered at the Marketing EFTS Workshop, Key Biscayne, Florida, January 15, 1974.

212. Distribution Codes, Inc. "About the Universal Product Code." Alexandria, Virginia, 1975. (Mimeographed.)

213. Etzel, Michael James. "The Impact of Participation In a Bank Credit Card Plan On the Credit Function and Over-all Operation of Selected Retail Establishments." Ph.D. Dissertation, University of Colorado, Denver, Colorado, 1970.

214. Georgia Technological Research Institute. "Research on Improvements of the Payment Mechanism: The Final Report on Phase I , An Analysis of Payment Transactions and Phase II, Payments Flow Data." Georgia Institute of Technology, Atlanta, Georgia, 1972. (Mimeographed.)

215. Hershe-Rotman and Druck, Inc. "Master Charge Card Use in Retail Food Outlets." Survey by Hershe- Rotman and Druck, Inc., New York, March 1974. (Mimeographed.)

216. Moore, J. F. "Atlanta Payments Project." Paper from the PSI Marketing EFTS Conference at Key Biscayne, Florida, January 15, 1974.

217. Nigut, Bill. "Consumer Credit in Food Stores." Paper Presented at the Payment Systems Sym­ posium, New York, June 3, 1975. (Mimeo­ graphed. )

218. Paulson, Lee. "A Retailer Looks at EFTS." Paper Presented at Payment Systems Symposium, New York, June 5, 1975. (Mimeographed.) 371

Unpublished Materials Continued

219. Reistad, Dale L. "Marketing EFTS Conference, the Point-of-Sale Environment." Paper Presented at the PSI Symposium, Sonesta Beach Hotel, Key Biscayne, Florida, January 14-15, 1974. (Mimeographed,)

220. Sprague, Richard E. "The Growth of Retail Point- of-Sale Systems and Their Impact On Electronic Funds Transfer." Paper Delivered at EFTS Marketing Workshop, Key Biscayne, Florida, January 15, 1974. (Mimeographed.)

221. Strubbe, John L. "The Chairman's Report." A Paper Delivered at the Uniform Grocery Product Code Council Annual Meeting, Washington, D. C., November 19, 1974. (Mimeographed.)

222. "The Development of An Electronics Fund Transfer System, A Symposium." COPE, Atlanta, Georgia, 1973. (Mimeographed.)

223. United States League of Associations. "Report FTS Unattended Teller Machines; System Design and Equipment Selection." United States League of Associations, Chicago, 1974. (Mimeographed.) 372

Interview

224. Register, Edgar. First Bank and Trust, Boca Raton, Florida, Interview March 20, 197 5.