Only one in 20 have used shops’ cashback alternative to ATMS

A GOVERNMENT cashback scheme designed to protect against cashpoint shortages is not working as only 5 per cent of the population have used it, a report by Which? has found.

The consumer group said that the policy, which enables people to request cashback in shops without making a purchase, was not sufficient to protect Britain’s “fragile” access to cash.

In a survey of 2,000 people, Which? found that just one in six – 16 per cent – were aware of the cashback without purchase programme, four months after its launch. Among those who are aware, only 31 per cent have used the scheme to access cash. This equates to 5 per cent, or one in 20, of the country’s population.

Almost half – 46 per cent – of all respondents said they were unlikely to use the scheme because it is an inconvenient way to access cash.

Consumers also raised privacy and security concerns. A third of consumers said they would not be comfortable withdrawing large sums of money in this way. The current limit is £50.

A quarter of all respondents said that it was unfair to expect a shop or business to handle the cashback service.

In 2020, the Government promised to legislate to protect access to cash in response to growing concern about the steady decline in bank branches and ATMS across the country, with fears that the UK’S free cash system was on the brink of collapse.

Since then it has introduced the cashback without purchase project and has consulted on proposals to force banks to guarantee deposit and withdrawal facilities for customers within certain distances. “It’s been almost two years since the Government promised to legislate to protect access to cash, so it must move swiftly to ensure that consumers will [still] be able to access cash for as long as it is needed,” the report said. It welcomed the decision last month by major banks to share services to help people who are being affected by closures but called on them to do more to protect the cash system.

The banks will need to demonstrate that these measures deliver what is needed, and Which? will be watching closely to see if they prevent communities from losing access to cash.

Jenny Ross, money editor at Which?, said: “Schemes like cashback without purchase have a role to play to protect access to [cash], but they won’t be enough on their own to plug the gaps in the UK’S fragile cash system.

“Our research highlights [limitations] of these schemes, with very low awareness and uptake among consumers, and many viewing cashback as an inconvenient and insecure way to access cash.”

‘[Schemes like this] won’t be enough on their own to plug the gaps in the UK’S fragile cash system’