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How Credit Card Payments Increase Unhealthy Food Purchases: Visceral Regulation of Vices

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Kalpesh Kaushik Desai. and

Satheeshkumar Seenivasan

Some food items that are commonly considered unhealthy also tend to elicit impulsive responses. The pain of paying in cash can curb impulsive urges to purchase such unhealthy food products. Credit card payments, in contrast, are relatively painless and weaken impulse control. Consequently, consumers are more likely to buy unhealthy food products when they pay by credit card than when they pay in cash. Results from four studies support these hypotheses. Analysis of actual shopping behavior of 1,000 households over a period of 6 months revealed that shopping baskets have a larger proportion of food items rated as impulsive and unhealthy when shoppers use credit or debit cards to pay for the purchases (study 1). Follow-up experiments (studies 2–4) show that the vice-regulation effect of cash payments is mediated by pain of payment and moderated by chronic sensitivity to pain of payment. Implications for consumer welfare and theories of impulsive consumption are discussed.

The past two decades have witnessed a rapid increase in obesity among U.S. consumers. According to the Center for Disease Control, 34% of U.S. adults are obese, up from 23% in 1988. An additional 33% are overweight (Ogden et al. 2006 ). These results suggest that the consumption of unhealthy food is increasing and have prompted several researchers to examine the factors that influence consumers’ decisions to buy unhealthy food. Intriguingly, this period has also witnessed an increase in relatively painless forms of payment such as credit and debit cards (Humphrey 2004 ; Nilson Report 2007 ). The share of cash in consumer payments has fallen by a third, from 31% in 1974 to 20% in 2000. Cards are replacing cash as the preferred mode of payment; about 40% of purchases in 2006 were made using credit and debit cards. The average American carries 4.4 cards in his/her wallet. These trends raise important, but hitherto unaddressed, questions: Does the mode of payment influence consumers’ ability to control their impulsive urges? Are consumers more likely to buy unhealthy food products when they pay by credit or debit cards than when they pay in cash? We address these questions from a psychological perspective in this research.

Our conceptualization and hypotheses draw on two distinct streams of research: the literature on impulsive consumption (Baumeister 2002 ; Hoch and Loewenstein 1991 ; Khan and Dhar 2006 ; Kivetz and Keinan 2006 ; Loewenstein 1996 ; Metcalfe and Mischel 1999 ; Raghunathan, Walker-Naylor, and Hoyer 2006 ; Ramanathan and Menon 2006 ; Rook 1987 ; Shiv and Fedorikhin 1999 ; Vohs and Heatherton 2000 ; Wertenbroch 1998 ; Ubel 2009 ) and the literature on the psychological effects of different modes of payment (Feinberg 1986 ; Mishra, Mishra, and Nayakankuppam 2006 ; Prelec and Loewenstein 1998 ; Raghubir and Srivastava 2008. 2009 ; Soman 2001 ; Soman and Cheema 2002 ). Based on the first stream of literature, we suggest that some unhealthy food products trigger impulsive purchase urges because of the desire activated by emotive imagery and associated sensations. Consumers impulsively buy such products even though they consider the products to be unhealthy and experience regret after the purchase. Following Wertenbroch (1998 ; also see Kivetz and Keinan 2006 ), we characterize such food items as vice products. Based on the second stream of literature, we propose that mode of payment can influence decisions to purchase these vice products. Specifically, paying in cash feels more painful than paying by credit or debit card. This pain of paying in cash can curb impulsive responses and thus reduce the purchase of such vice products.

The notion that mode of payment can curb impulsive purchase of unhealthy food products is substantively important. The epidemic increase in obesity suggests that regulating impulsive purchases and consumption of unhealthy food products is a steep challenge for many consumers. Several factors contribute to this: the automatic nature of visceral responses to vice products (Shiv and Fedorikhin 1999 ), the depletability of cognitive resources that override these visceral responses (Vohs and Heatherton 2000 ), the chronicity of impulsive goals (Puri 1996 ; Ramanathan and Menon 2006 ), the belief in the “unhealthy = tasty” intuition (Raghunathan et al. 2006 ), and biases induced by contextual factors (Cheema and Soman 2008 ; Wansink 2006 ; Wansink and Chandon 2007 ). Given that many consumers struggle to regulate their impulsive responses, the finding that mode of payment could serve as a self-regulation tool has substantive relevance for consumer welfare.

Our conceptualization and empirical results augment the extant literature in several ways. First, we show that the effects of mode of payment are contingent on the type of product. Prior research has demonstrated that pain of payment affects the willingness to spend money (see Prelec and Loewenstein 1998 ); our results qualify this finding by demonstrating that relative to deliberative purchase decisions, impulsive purchase decisions are more likely to be influenced by pain of payment. This result calls for a more nuanced conceptualization of the effects of mode of payment on consumer behavior. Second, our results contribute to the debate on whether impulsive decisions to purchase unhealthy products can be characterized as rational choices. Some economists have argued that the decision to buy unhealthy food is a rational choice (see Ubel [2009 ] for a discussion of this debate). Per the rational choice model, consumers buy unhealthy food items because their utility from immediate consumption exceeds the disutility from long-term unhealthiness. The finding that purchases of impulsive products (e.g. cookies) are influenced by pain of payment while those of planned products (e.g. oatmeal) are not implies that these two types of purchase decisions cannot be characterized by the same rational choice model. This result supports Loewenstein’s (1996 ) suggestion that descriptive choice models should incorporate the effects of visceral states. Finally, our results suggest that self-control is not entirely volitional; it can be facilitated or impeded by seemingly unrelated contextual factors that influence visceral responses.

Conceptual Framework

Impulsive Purchase of Vice Products

Although consumption of unhealthy food products can be caused by several factors, such as faulty beliefs and lack of knowledge, impulsivity seems to be one of the, if not the most, influential antecedents of unhealthy food consumption. Most scholars who have attempted to conceptualize impulsivity concur that impulsive purchase decisions are based on spontaneous desires elicited by emotive imagery and associated sensations and that such decisions could be inconsistent with one’s long-term plans and goals (Baumeister 2002 ; Hoch and Loewenstein 1991 ; Kivetz and Keinan 2006 ; Loewenstein 1996 ; Metcalfe and Mischel 1999 ; Rook 1987 ; Scott et al. 2008 ; Wertenbroch 1998 ). For example, Baumeister (2002. 670) defined impulsive purchasing as “behavior that is not regulated and that results from an unplanned spontaneous impulse. In particular, impulsive purchasing involves getting a sudden urge to buy something without advance intention or plan and then acting on that impulse without carefully or thoroughly considering whether the purchase is consistent with one’s long range goals, ideals, resolves, and plans.”

Adopting a similar perspective, in this paper we examine consumers’ impulsive purchases of unhealthy food products. It is reasonable to assume that most people cherish long and healthy lives. So, when in a reflective frame of mind, most people would want to minimize their consumption of food items that they consider to be unhealthy. However, their purchase decisions are not always based on such deliberative thinking. When consumers encounter vice products—such as cookies, cakes, and pies—the emotive imagery and associated desire trigger impulsive purchase decisions (Loewenstein 1996 ; Shiv and Fedorikhin 1999 ; Wertenbroch 1998 ). These visceral factors can prod them to include such vice products in their shopping baskets even though they consider such products to be unhealthy.

Since the desire that triggers impulsive behavior is caused by visceral factors, it can be weakened by other aversive visceral factors. Aversive visceral responses, such as feelings of pain, can extinguish consumptive desires. With the extinction of desire, vice products no longer seem so appealing. Stated differently, the desire to consume a vice product is based on a visceral state, and it recedes with aversive visceral responses. This notion is

consistent with Metcalfe and Mischel’s (1999. 11) assertion that “internal activation of irrelevant hot nodes allows the diversion of considerable cognitive-affective energy and hence serves as an effective distracter.” This line of reasoning implies that environmental factors that trigger feelings of pain can dissipate impulsive urges and thus curb impulsive purchases. We propose that mode of payment is one such environmental factor: pain of payment can reduce the pleasure of anticipated indulgence and thus curb impulsive purchases.

Pain of Paying in Cash

Several researchers have suggested that the mode of payment can influence pain of payment. Based on their model of hedonic mental accounting, Prelec and Loewenstein (1998 ) posited that paying in cash elicits greater pain than paying by other modes of payment even when the modes are normatively equivalent. Raghubir and Srivastava (2008 ) tested the effect of pain of payment on willingness to spend in several experiments. In one of their experiments (study 3), some participants were given a $50 bill while others were given a $50 scrip certificate—a certificate whose value is recognized by the payer and payee. Participants then responded to a simulated shopping study. The authors predicted that since paying by the scrip will feel less painful than paying in cash, participants will spend more with the scrip certificate. Consistent with their prediction, participants spent more when they were given scrip than when they were given an equivalent amount in cash. Several other studies offer converging empirical evidence for the proposition that cash payments feel different from other less vivid and emotionally more inert modes of payments (Mishra et al. 2006 ; Raghubir and Srivastava 2008. 2009 ; Soman 2001 ).

Deliberative Purchase of Virtue Products

Not all purchase decisions are based on spontaneous impulses. While purchase decisions of vice products—such as cookies, cakes, and pies—are influenced by spontaneous impulsive responses, purchase decisions of virtue products—such as fat-free yogurt and whole wheat bread—tend to be more deliberative. Previous research (e.g. Kross, Ayduk, and Mischel 2005 ) suggests that deliberative thinking can reduce the intensity of negative emotions. Further, since the purchase of virtue products is based on justifiable considerations (“I am buying something I need”), consumers might be able to rationalize or explain away the pain of payment. Based on this reasoning, we predict that while purchasing a virtue product such as fat-free yogurt, a consumer can explain away the pain of paying in cash. However, a consumer might not be able to explain away the pain of payment for a vice product since the purchase decision is based on a visceral response. Consequently, the pain of paying in cash is likely to have a larger effect on purchase decisions of vice than of virtue products.

To summarize our discussion thus far, the pain of paying in cash can weaken desires and thus curb impulsive purchases of vice products. However, the pain of paying in cash is less likely to influence purchase decisions of virtue products because such decisions tend to be based on more deliberative evaluations. This implies that the proportion of vice products relative to virtue products in the basket will change depending on the mode of payment. Based on this reasoning, we hypothesize:

The number of unhealthy and impulsive food items (vice products) in the shopping basket will be lower when consumers pay in cash than when they pay by credit cards. Mode of payment will not influence the number of healthy and deliberative food items (virtue products) in the shopping basket.

Further, our conceptualization posits that pain of payment is caused by the form of payment and not by other mechanisms such as payment decoupling or time discounting of delayed payments. This implies that all types of cards—credit as well as debit—will reduce pain of payment and thereby increase the purchase of vice products. Like credit card payments, debit card payments are also less vivid and emotionally more inert than cash payments; therefore, they feel less painful. Hence, we expect that debit cards will also weaken impulse control. Formally,

Both credit cards and debit cards will reduce pain of payment and thus increase purchases of vice products.

Individual Differences in Sensitivity to Pain of Payment

Previous research suggests that pain of payment is not only a situational factor, it is also an individual difference variable. Individuals differ in their sensitivity to pain of payment; some are chronically more sensitive to pain than others. Based on this premise, Rick, Cryder, and Loewenstein (2008 ) suggest that consumers can be identified as tightwads or spendthrifts. They label as tightwads those consumers whose affective reaction to spending may lead them to spend less than their more deliberative selves would prefer. In contrast, they label as spendthrifts those consumers who experience minimal pain of payment and, therefore, end up spending more than what they themselves would consider as normatively appropriate. Our conceptualization predicts that the vice-regulation effect of cash payments will vary across these two types of consumers. Relative to spendthrifts, tightwads would be more sensitive to pain of payment, and therefore pain of paying in cash will have a larger effect on their consumption of vice products. Formally,

The vice-regulation effect of cash payments will be stronger for consumers who are more sensitive to pain of payment.

In the following sections, we describe the empirical studies conducted to test these hypotheses.

Study 1: Mode of Payment and Healthiness of Shopping Basket—A Field Study

To seek preliminary evidence for the hypothesized effect of painless payment on consumption of unhealthy food items, we analyzed data from a large retailer that operates several grocery stores in the northeastern region of the United States. The data included information on what products each household in the panel purchased during their trips to the store and the prices of the products. More importantly, this data set is distinct from other typically used scanner panel data sets in that it provides information on whether each purchase was made using a credit card, debit card, or cash. Taking advantage of this unique aspect of the data set, we test whether consumers buy more impulsive and unhealthy food products when they pay by credit cards than when they pay in cash (hypothesis 1).

Further, this study also tests whether the proposed effect will manifest for both debit and credit cards or only for credit cards. Our conceptualization predicts that both debit and credit cards will increase the proportion of unhealthy and impulsive food products in the shopping basket, because the card payment format makes payments less vivid and thus reduces the pain of payment (hypothesis 2).


The data cover a period of 6 months (January to June) in the year 2003. We use a random sample of 1,000 loyal single-member households who primarily purchase from the chain stores for our analysis. We restrict our analyses to single-member households because in multimember households, it is not clear whether the observed effects are due to mode of payment or due to differences in shopping behaviors of individual members of the household. For example, a younger member of the household might always use credit cards while an older member might always use cash. In such a situation, it will be difficult to delineate the effect of mode of payment on purchases. By restricting our analyses to single-member households, we can avoid this confound. For these 1,000 households, we obtained data on what products they purchased during the 6-month period on each visit to the store and how they paid during the trip. Table 1 presents a summary of the relevant statistics for the sample. Note that about 41% of the transactions were paid by credit cards and 9% were paid by debit cards. Further, there is a lot of within-household variability in card usage; only 16% of the households used credit or debit cards on more than 90% of their shopping trips whereas 14% always paid in cash. A majority of the households switched between card and cash payments. Since we restrict our analysis to single-member households, these data offer us the opportunity to test our hypothesis on how mode of payment affects consumer behavior.

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