Long before the debate around the wisdom and fairness of using prepaid debit cards to pay employee salaries began, recipients of welfare and food stamps made the switch from paper checks to plastic. A new study has found that the transition yielded this surprising result: Debit cards reduce crime.
A recent story in The Chicago Tribune highlights research conducted by Richard Wright, a University of Missouri at St. Louis criminology professor. What Wright and his team of researchers discovered is that replacing paper checks that recipients – many of whom did not have bank accounts – had to cash at check cashing outlets with debit cards reduced the overall crime rate in Missouri by almost 10 percent.
“We saw this astounding reduction; we were surprised ourselves,” Wright told the newspaper. “Name a policing strategy that led to 10 percent reduction in overall street crime?”
Once explained, the reason for this dramatic drop in crime seems obvious. Recipients of paper checks who went to check cashing stores walked out with cash in their pockets. Having a sizable amount of cash on them made them prime targets for robbers. The introduction of debit cards, says Wright, took a lot of that cash out of circulation and made people less vulnerable to crime. Indeed, Wright’s study found that burglary, assault and larceny fell by 7.9 percent, 12.5 percent and 9.6 percent, respectively.
Wright’s study is the first of its type and he now hopes to expand his research to see if the substitution of debit cards for welfare checks has had the same impact nationally.
