http://www.canada.com/business/Consumer+Confidential+Your+cash+good+here+airlines/2494495/story.html
Summary:
The American airlines are not accepting cash during their flights. People are forced to use credits cards regardless of how minor the purchase is. Despite American cash being legal tender for all debts, privately owned airlines would rather make transactions through credit cards. There is no law that require private businesses to accept currency or coins for their goods and services. Privately owned businesses can make up policies accepting the form of currency they want. Cashless flights make it more convenient for flight attendants because they don’t need to carry cash. There would have to be machines on the flight to make these transactions possible.
Connection:
The American airlines have the rights to reject cash on their flights. When currency such as the American banknotes is not accepted for repayment, it is not considered a legal tender. They can accept anything they want but they choose to receive their payments by credit cards. These private airline businesses can even choose to barter if they want. The barter system would allow an individual to trade a possession for a good or service. For example, a watch can be traded for 5 meals. Today, money is used as a medium of exchange and it acts as the unit of account. On flights, people are more familiar with the American dollar because most things are bought and sold with actual cash. The reason for this is because the American currency is fiat money, it is considered money because people believe it has value even though it’s just paper. But, for the convenience of electronic transactions American airlines prefer credit cards over cash.
Reflection:
I have seen restaurants that accept only cash, but I have never seen any place accepting only credit cards. The American airline prefers to make transactions electronically only but in my opinion this would reduce the circulation of money. Not every individual would have a credit card or they may be under age to even have a credit card. Gresham’s Law states that bad money forces good money out of circulation. In this case, the credit card is forcing American banknotes out of circulation on the flights. If the currency is not in circulation, it cannot be considered as money. In my opinion, paper currency is more convenient for the consumers because it is recognizable and readily accepted but American airlines do not have the same opinion about paper currency.
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I agree with Michael. Seeing airlines that only accept credit cards is a first. They could possibly be trying to change the circulation of money so it's all electronic forcing all the cash off of American flights. Although not everyone may have a credit card or is underage, I would expect it to change in the future. As for now, I think that cash is more readily accepted but apparently the American airlines do not think so.
ReplyDeleteIf the American airlines only accept credit cards, it would make it very inconvenient for the passengers. The paper currency is already the most recognizable form of money and is accepted by everyone, while credit cards are not money. By not accepting the US currency, it contradicts the characteristics of money. On the Coinage Act it had stated that “the United States coins and currency are legal tender for all debts, public charges, taxes and dues.” and if it is not accepted by the American airlines is the currency still considered money to them? Not everyone will have access to a credit card. Some passengers may not want to use it just to purchase some food, especially if they need to pay a fee for the transaction such as foreign currency transaction fee. Cash at hand would be a lot easier to pay for the little purchases.
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ReplyDeleteI agree with Kenny above, it is indeed efficient for airlines to only accept credit cards however, they should also accept paper currency and coins because it would be more convenient to purchase things. Like Michael said, an underage person would not have a credit card therefore they cannot purchase anything. I think this system is flawed because only credit card users will be able to purchase goods. Furthermore, it’s unfair for underage children because they can’t receive those goods unless accompanied by an adult or guardian.
ReplyDeleteHey Xing Jai!
ReplyDeleteI think that airlines only accepting credit card is reasonable. It is more efficient for the airlines because really, who is going to be carrying around 31cents of change. Although the circulation of money will decrease, it is more beneficial for the airlines to keep things organize. Also the chance of theft may happen by the flight attendants. Also in todays modern society, i think that credit and debit cards are just as recognized and easily accepted as paper money. When you say. "Not every individual would have a credit card or they may be under age to even have a credit card." generally, smaller children who travel through air would be escorted by a parent or guardian who typically would have a credit card.
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ReplyDeleteI enjoyed reading your version of the article analysis since I wrote about the same topic on my most recent blog post. As I was reading your reflection, I have a few points that I disagree with. First of all, you mentioned that when American Airlines make transactions electronically, it would reduce the circulation of money. But money is not being reduced. When a transaction is being made through a credit or debit card, money is transferred electronically and only the circulation of bank notes and coins are reduced. Second, you mentioned that Gresham’s Law states that bad money, which in this case is credit cards, forces good money, in this case cash, out of circulation. Credit and debit card transactions are not necessarily “bad money”. It is a more convenient and hassle free method of doing transactions which is why most airlines are making the switch. Last of all, paper currency could be more convenient for consumers, but it is not convenient for airlines because travellers usually are carrying different types of currency. Their bank notes may not always be accepted while credit cards are universal because the bank can do an exchange of currency when the transaction occurs. In perspective, airlines are only making the switch to “cashless cabins” because it is more efficient for their company and the customers.
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