With less cash in circulation and more shoppers opting to tap and pay, some convenience retailers are struggling to come up with enough cash to fulfill lottery wins.
The pandemic has changed the way consumers pay for items in-store. According to a recent global payments report by FIS, the fintech company also known as WorldPay, the use of cash has fallen significantly. Worldwide cash usage dropped 10% in 2020, however here in Canada, as well as the U.K., France, Norway, Sweden and Australia, the use of cash halved in 2020. It is expected that cash will account for just 4% of in-store payments by 2024.
Recent data from Payments Canada shows that Canadians demonstrate an ongoing reluctance to handle cash, payment terminals and ATMs: 42% report that COVID-19 has changed their payments preferences to digital and contactless for the long-term.
While many retailers are asking customers to tap and pay as a safety measure designed to protect customers and staff in light of the pandemic, there is a downside: The lack of cash is causing headaches when it comes to lottery wins.
Convenience Store News Canada reached out to lottery corporations across the country for best practices and advice for retailers facing a cash crunch.
In Ontario, the payment of lottery prices to OLG customers totalled $1.8 billion from April 2020 to January 2021. Winners are encouraged to redeem prizes of less than $1,000 at any one of Ontario’s 10,000 lottery retail outlets. Payment of prizes is subject to the availability of cash at each outlet.
These days, however, a series of wins can easily clean out a retailer's on-premise cash.
In response, OLG updated its Retailer Policy Manual to accommodate for payouts on debit or credit, effective June 1, 2021. "In addition to paying prizes in cash, retailers now have the flexible option of paying directly to a customer’s credit or debit card if their payment processing service and/or bank’s terms and conditions allow for it."
OLG also notes: "This payment method may only be used with the customer’s permission and is only available for prizes up to $999.90. This method can only be used after the successful validation of a winning lottery ticket and no additional fees can be applied for using this payment option."
In British Columbia, all lottery retailers are required to pay up to a $200 and may have the ability to pay prizes up to $2,000.
BCLC spokesperson Erica Simpson said: "BCLC supports our lottery retail partners with the decisions they need to make at all times and especially during COVID-19."
In turn, BCLC’s lottery retailers can pay out lottery prizes "via cash or an equivalent non-cash prize, consisting of either in-store gift cards or a debit or credit-card payment that is authorized by the payment provider, equal to the lottery prize amount, unless otherwise approved by BCLC."
When an equivalent non-cash prize is to be paid in lieu of a cash prize, BCLC notes it is the responsibility of the lottery retailer to ensure the player has voluntarily agreed and to provide the player with a receipt indicating the amount of the non-cash prize payment.
Simpson says that as one way to support lottery retailers who may be using less cash, BCLC’s two retail "signature stores" payout prizes up to $9,999.99 and have remained open during the vast majority of COVID-19.
Both provincial lottery corporations offer winners the option to mail-in prizes.
As of publishing, the Atlantic Lottery Corporation and Loto Quebec had yet to respond to questions.
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