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J.C. Penney Plans to Eliminate Cash Registers in Stores

Barbara Thau for DailyFinance
Posted on Jul 25, 2012

JCPenneyCheck out this interesting piece from DailyFinance: 

Cash registers could join the ranks of pay phones and typewriters sooner than you think.

J.C. Penney (JCP) will say farewell to cash registers, checkout counters and cashiers by 2014, said Ron Johnson, the chain’s CEO, during the Fortune Brainstorm Tech conference, reports Time.

Penney’s plan evokes Apple’s (AAPL) mostly cash-register free stores — and that comes as little surprise: Johnson was the head of Apple Retail and is considered the mastermind behind its success. He left Apple in November to take the top spot at J.C. Penney.

Johnson, who has been in the headlines lately for Penney’s radical, controversial — and so far, unsuccessful — strategy to eliminate most of its sales and coupons, is now looking to shake up the checkout experience in the chain’s stores.

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His plan is to eliminate cashiers, cash registers and checkout counters, replacing them with a patchwork of technology solutions, such as WiFi networks, mobile checkout, RFID (radio frequency identification) technology tracking systems for merchandise, as well as self-checkout options.

“Think of a physical store without a cash wrap,” Johnson told the audience, according to Time. “About 10% of all the money we spend, half a billion dollars a year, goes to [checkout] transactions.” The money saved by replacing checkout stations with new technology could be invested in improving customer service, he said.

Ryan Taft, managing partner with OnSpot Social, an iPad app for retailers that collects Facebook “likes,” Twitter followers and email addresses in-store, believes the retail industry is at the early stages of the end of the widespread use of cash registers.

“In-store marketing through technologies like iPad, RIFD, WiFi, etc, is the future of retail,” he tells DailyFinance. “Some retailers may do away with cash registers altogether, while others may simply cut down on the number of cash registers, and only use them for larger purchases.”

Taking a Cue From Apple

Apple, for one, let’s customers of its Apple Stores pay in any of three ways, he notes.

Each Apple Store typically has one or two cash registers at the back of their stores, mostly reserved for large purchases.

“The second is actually through an Apple store employee who will take your credit card and run it through their credit card scanner attached to an iPod Touch. The third, and in my opinion the most innovative, is you can actually check yourself out by pulling out your iPhone, opening the Apple Store Application, scanning the barcode of your product, and then paying through your iTunes account,” he says. “This is the future of retail checkout.”

And while some predict the demise of store associates along with cash registers, not necessarily, Taft says. “Sales associates won’t go away in the new retail paradigm, their roles will simply evolve for more customer service focused responsibilities.”

But there’s a rub when it comes to the wholesale elimination of cash registers in stores, says Natt Fry, senior executive of Accenture’s Retail Practice.

“Retailers still need cash tills because a large percentage of their customers use cash, especially the unbanked consumers,” he tells DailyFinance.

Still, in the future, “All other transactions can, and will be, conducted using either the retailer’s mobile device or the customer’s,” Fry predicts.

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  • sjdemo

    they are going to have to have some way to accept cash. it is against federal law to not accept. read a dollar bill next time you see one. “legal tender for all debts public and private”

    my university used to refuse cash payments for tuition. a pre-law student to them to court.

  • Alie_ann221

    They are also eliminating those customers who don’t have smart phones or who are unable to have a checking account. Which for some is unheard of but a reality for many people in the US 

  • Sheila

    Recently I’ve changed my spending habits and am starting to use more cash.  I use my debit card for gas, but I’m using mostly cash now.  This would really discourage me from shopping at JC Penney.  Although since they did away with their coupons I’ve only been in a JC Penney once this year and I used to go all the time.

  • Krogers28

    This is a ridiculous proposal and this new plan is going to bankrupt JC Penney’s. I know many people that will not shop there since their recent changes, I haven’t either. I now go to Kohl’s. I wish them the best in their future endeavors because it will crumble underneath them. What about those shoppers that don’t have the smart phones, such as the older generations. Good luck.

  • anthonysmom

    Another cash customer here – I already don’t shop there very often, partially due to their new changes, and this would finalize it for me.  We pay with actual green, paper money.  We rarely use our debit card, unless it’s a major purchase. Or sometimes, we may even write out a check (gasp!).  My parents don’t have smartphones, so I guess they couldn’t shop there either…good thing Kohl’s still takes cash!

  • Mia Pet

    Boy that’s gonna put a lot of cashiers out of jobs too. Actually Macy’s became my store of choice.

  • Juliebenulie

    My first thought was the same as Mia Pet’s, this will put a lot of cashiers out of work. My second thought was how ironic! I quit shopping at JCP because I got tired of wondering around the entire store looking for a cashier to take my money.

  • Mllnlnd

    There are many people who are not into technology and won’t shop there knowing it involves some IT that they don’t own or know how to use.

  • JCP shopper

    Overall, it’s a bad idea and I won’t be shopping there. It seems that Penney’s just keeps on making poor decisions lately. Too bad, I used to like to shop there.

  • Rknight721

    BAD idea, let’s keep jobs open for people not machines

  • Gwenharper11

    Stupid idea.  I do not own a smartphone.  I use my debit card or cash or a check.  Who is going to pack up the items.  Also since you changed the layout of the store I don’t really like going in there.  Went in for a womens swimsuit my 7 year ol grandson found it in the junior dept looked around for an assistant.  Few and far between.  Will I be finding fuller  womens clothing in the babies dept soon.  Was told this is the way it is now. 

    Another thing on this technology stuff.  People who shop at Apple stores know what they are doing with this stuff.  People of my generation, 63 and above, a lot of us have trouble just getting our computers to turn on.   

  • Christie

    this is a ridiculous idea.  The true shoppers who have smart phones and apps are the younger generation.  I have no intention of getting a 2 year plan for a phone I have no interest in.

    Thank you Gwen and others for such insightful responses too

  • lheck7

    How about us that don’t use I Pads, or all that other technical stuff. I won’t shop there, Thanks.

  • Jess

    This is where checkout is going.  Most people use cards.  For those outliers that use cash, I’m sure they’ll have one checkout or two, but why have more? Most people under the age of 50 use cards for their purchases.  It won’t get rid of cashiers, much like self checkout hasn’t gotten rid of cashiers…

    The times are changing, like they always do… and (to generalize) the older generation will do what they’ve done since the industrial revolution…moan, refuse to use, and generally abhor anything that has been invented after a certain date. 

  • Cjbm

    Jess seems to think anyone over 50 is incapable of learning new technology…it’s a shame your over 50 acquaintances/relatives can’t, Jess.

    I think JCP is headed down the wrong road too fast.  People in general like getting a good deal, and there pricing structure now eliminates that possibility.  Now, with their idea of eliminating cash registers, JCP will further alienate a section of the buyer population who like to pay with cash, and anyone (young or old) who is not comfortable with the change.  Resistance to change is not relegated by age.

    • Sheila

      I’ve noticed a lot of stores lately are going to offering discounts via smartphone.  I just recently got my first smartphone and I”m not so much of a fan of having to text for an extra 20% discount or whatever the case may be.  I really don’t want to have to download an app for every store just to get a discount.  It also seems unfair to those that don’t use a smartphone.  

      • Cjbm

        I know how you feel, Sheila.  It’s like being forced to play a game you don’t like.  People are not monkeys to be trained to pick the correct symbol in order to be rewarded.

        Retailers may only re-think these things when their profits are affected.

  • Pqpqpq

    I’m not going to shop at a store that replaces its people with machines. Where will the money I spend go? Straight to the people who already have enough.

    My local groceries have some self-checkouts, but it’s stupid because they still need a person to stand there to run around and help the customers and fix the computer errors. It looks to be the same as if they just let that one person be a cashier.

  • Allison

    Everyone here keeps talking about how they do not have a smartphone and how this will eliminate employees. This is not necessarily true. Did everyone miss the sentence about scanning a credit card through to the store’s device (such as an iPad)? The biggest thing here is about getting rid of the bulky machines. The employees will still be there.

  • Greta

    Completely stupid. JCP is not some upscale store that caters to people who own $200 phones and pay for everything on credit cards, JCP caters to low end customers; The same customers who shop at Kohls and target so many of them will be unable to shop there. Also, many people are trying to live debt free and pay cash by choice. I’m also appalled that people will be losing their jobs. Why is it that corporations like JCP insist on making profit by putting people on the unemployment line? If they’re not outsourcing their introducing some new technology that makes people’s jobs obsolete. Pretty soon there won’t be any jobs for anyone!