$100 Bills Jump in Volume Despite Merchant Distaste

America’s most common form of currency might also be its least wanted.

There are now more $100 bills in circulation than any other denomination, with the number of these bills doubling between 2012 and 2022, The Wall Street Journal (WSJ) reported Sunday (Feb. 25), citing Federal Reserve data.

And as that report noted, these bills are more useful for keeping wealth than spending it. Cashiers won’t accept them, and when they do, they tie up checkout lines as merchants verify the bills aren’t counterfeit. And economists have recommended slowing printing of the bills as they are often used for illegal purposes.

The headaches that come with using a $100 bill can lead people to spend less, Helen Colby, an assistant professor of marketing at Indiana University’s Kelley School of Business, told the WSJ.

It’s what’s known as “the denomination effect,” where the form that money comes in affects the person’s desire to spend it. Colby said that if you make a purchase with a credit card, you get the card back after the transaction, while spending a $100 bill basically “destroys” it.

“A $1 bill doesn’t feel like much but a $100 bill feels very meaningful and beefy,” she said.

Cash use by consumers plunged during the COVID pandemic, and research by PYMNTS Intelligence has found that most people now only carry paper currency out of habit.

The WSJ report cited Federal Reserve data showing that 60% of payments are made with debit and credit cards, with cash now the third-most used payment method in America in terms of the number of transactions.

Still, that doesn’t mean paper money has completely gone away. For example, close to 21% of all B2B transactions completed in the real estate sector are done with checks, while 4% are paid in cash, according to the PYMNTS Intelligence study “The State of Real-Time Payments.”

And a survey released Friday (Feb. 23) by the Swiss National Bank (SNB) found that cash acceptance remains high and has not changed much since 2021. 

In a speech the same day, SNB Vice Chairman Martin Schlegel said that physical cash will never disappear from use in Switzerland, despite the popularity of payment apps.

Speaking at an event, Schlegel stressed the importance of cash for a large part of the population, pointing to countries like Sweden where cash usage fell but still remained after reaching a certain level.