A new study suggests that old wrinkled bills of various denominations are spent more quickly than new crisp bills. If these findings are any indicator, people prefer their money to be, perhaps like dress clothes, “freshly pressed.”
According to Yahoo! News, two professors from Canada recently published a paper in the Journal of Consumer Research entitled, “Money Isn’t Everything, but It Helps If It Doesn’t Look Used: How the Physical Appearance of Money Influences Spending.”
Fabrizio Di Muro, assistant professor of marketing at the University of Winnipeg, and Theodore J. Noseworthy, associate professor of marketing at the University of Guelph, are the authors of the paper. The duo have surmised people place higher worth on crisp bills than they do on worn out ones. This theory challenges the idea that money is money based on face value alone.
While theoretically “money is money” in terms of value, the authors indicate that one “crisp” $10 bill may not necessarily hold the same perceived value by the carrier as a worn-out $10 bill.
The study was conducted by observing how participants in the research spent the money given to them. The subjects were told they could be liberal with their spending on a number of products that varied in price; the participants were led to believe spending habits were being observed.
In the report, Di Muro and Noseworthy indicate spending is influenced by the physical appearance of bills rather than the denomination, suggesting that people care about what the money they carry looks like. What they found was people spent their “dingy” cash far more frequently than they did their “pretty” money.
“It shouldn’t matter what money looks like,” Noseworthy said. “But we show it does matter. If I gave you a crisp, new $20 bill, I don’t want you to give me crumpled bills back.”
They note this is important since smaller bills, such as the $1 bill, are exchanged far more frequently than $100 bills.
The researchers indicated that people prefer to “rid themselves” of crumpled up bills because they are “disgusted by the contamination” that other people leave on these bills, and take pride in carrying cash that is more aesthetically pleasing to the eye.
“This suggests that the physical appearance of money matters more than traditionally thought, and like most things in life, it too is inextricably linked to the social context,” the researchers said.
The full study was electronically published on October 3, 2012, and can be read here: “How the Physical Appearance of Money Influences Spending.”