http://www.canada.com/business/Consumer+Confidential+Your+cash+good+here+airlines/2494495/story.html
SUMMARY
Lately, there has been a trend where airlines are no longer accepting cash on their flights. Beginning February 1, 2010, American Airlines will be joining the “cashless cabin” club. Any passengers who do not have access to a credit or debit card will not be able to purchase food, drinks, or duty free items. There is a controversy where people have stated that bank notes quote “This note is legal tender for all debts, public and private" but yet they are prohibited from using them while on commercial airlines. The US Treasury Department states that although United States coins and currency are legal tender for all debts, public charges, taxes and dues, there is no law stating that a private business, a person or an organization must accept currency or coins as for payment for goods and or services.
CONNECTION
In chapter 7, we were introduced to the concept of money and the Canadian banking system. Exchanges first took place with the use of barter; the process which a good or service is exchanged without the use of money. Today the money we use is in the form of bank notes. Bank notes are fiat money, which means there is no gold or other items of value matched behind the notes. They are legal tender and can be used to purchase goods or repay debt. The controversy with airlines not accepting cash is that they are violating the law which states that bank notes and coins are legal tender; but the US Treasury Department states otherwise. There is no law stating that private businesses must accept currency or coins for payment of goods or services. This means that private businesses can choose to operate on a barter system if they wish. In this case airlines can choose to accept credit or debit cards as the only method of payment.
REFLECTION
Many airlines are jumping onto the bandwagon of having a “cashless cabin”. These airlines include United Airlines, Continental Airlines, Southwest Airlines, JetBlue Airways, Alaska Airlines, Frontier Airlines, and the recently joined American Airlines. As for the controversy of bank notes and coins not being accepted on certain airlines, I believe that the majourity of the crowd who have this issue are seniors. Most adults these days own and use credit or debit cards regularly. The issue with not having a credit or debit card is minor. As mentioned in the article, flight attendants or other people will be more than happy to cover the costs in exchange for cash. With this new cashless rule in place, it will bring many conveniences to airlines. For example flight attendants will no longer have to carry change and deal with different currencies. In a business perspective, airlines will be saving money because going cashless will simplify the accounting immensely and the battery operated machines will make it easier to track and adjust inventory. On top of that, customers will spend more money because they will not have to worry about breaking bills and carrying change. Customers will not face buyer’s remorse until the credit card bill comes at the end of the month. I support the fact that airlines are taking the initiative towards starting a trend of a cashless society.
From reading this, I can see that credit cards are slowly replacing coins and bills. However, I think that the replacement will be a very slow process and will take many generations to complete. Some factors that could keep cash as our main form of currency could be older citizens that aren't that open to change and immigrants that aren't that familiar with technology. This might also be beneficial for our environment as we are producing more plastic credit cards rather than using up natural resources to create coins and paper bills.
ReplyDeleteCredit cards become more popular in today society, it slowly replacing coins and bills. I personally don’t like the idea of credit cards. Although it is very convenience to use credit cards for the airline and consumers because flight attendant and consumers no need to deal with covering one currency to other currencies. Some people are more likely to spend more when they are using credit cards to purchase goods, at the end of the month they will be surprise by the instant loan they got before. In a small business perspective, it’s better for them to have money in the bank instead of having accounting receivable.
ReplyDelete-Tracy Lam =)