Thursday, September 03, 2009

Wal-Mart Paying Via Check Cards

Wal-Mart announced that it will stop issuing paper checks to employees who decline to utilize direct deposit. Instead, it will issue debit cards to those employees. The company estimates that it will save more than 257,000 pounds of paper per year through this initiative, given that roughly half of its employees still receive paper checks at this point.

The news articles indicate that government agencies such as Social Security have begun making a shift to debit cards as well. I found that particularly interesting, given that the other day, I received another copy of my "Social Security Benefits Statement" in the mail. I seem to get these statements periodically, despite the fact that I have nearly forty years until I hit retirement age. As I received my statement the other day, which is several pages long, I wondered how costly these mailings are for the federal government. The waste in paper and money must just be incredible. It makes you wonder whether past attempts to "reinvent government" really made a substantial difference.

4 comments:

Beyond The Political Spectrum said...

This is really a shame because with more and more companies using debit cards in lieu of a paycheck, it means an economic boom for banks, who are all-too-eager to use this method of nickle-n-diming people out of their hard-earned cash (I've used them, trust me, there is no strategic way to avoid this).

Louie said...

Maybe it's a green thing but it's cash not the environment. Consider this possibility: Walmart will deliver let's say 1/2 of it's employees which equals lets say 40K people. It's a windfall for Mastercard (more users & bragging rights & more income from merchant discounts), First Data (more transactions=more fees), Walmart (no more paper checks, no more postage and possibly leverage a lower discount from Mastercard). Please excuse me if these assumptions are wrong since I'm not familiar with how all these things really work

rnbresearch said...

I chanced upon to view your blog and found it very interesting. Great ... Keep it up!

Brian said...

Professor Roberto, you simply do not have enough time to tackle all the ways the government wastes money, but this is an interesting observation. One could argue the SS statements add some value by educating the general populace on the benefits available under the SS program (not a strong argument, but at least somewhat reasonable). A more egregious example was the printing and mailing of "Advance Refund Checks" several years ago. The government incurred printing and postage costs for checks that would simply be recaptured on tax returns printed and mailed only months later!