Pain of Paying

The Basic Idea

When you go shopping, is your default payment method cash or a credit card? If you typically pay with your cards, you may find this a silly question - carrying a single card is more convenient than a wallet full of cash! Aside from the factor of convenience, there may be another subconscious reason behind your choices.

The pain of paying refers to the negative emotions we feel when making a purchase.1 This happens because as humans, we are loss averse: we want to avoid losses whenever possible, and losses are perceived to be more powerful than equal gains. When we make payments, we incur a loss, which is why these transactions can be painful. Moreover, the pain of paying has been found to be stronger when paying with cash than with a credit or debit card.2 Our loss of money is more salient to the brain when handing over physical cash, rather than swiping a piece of plastic.

I don’t think we should go around life being miserable all the time and feel the pain of paying. It’s a question of what categories we want to spend more on and what categories we feel that we are spending too much on and we want to cut down.

– Dan Ariely, behavioral economist and author of Predictably Irrational: The Hidden Forces That Shape Our Decisions

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The pain of paying was a concept coined and developed in Ofer Zellermayer’s PhD dissertation, under the supervision of George Loewenstein at the University of Carnegie Mellon.1 Zellermayer’s thesis was finalized and submitted in December 1996, and has since become a phenomenon advanced by modern behavioral economists like Dan Ariely.2 Inspiring his dissertation, Zellermayer noticed that people had different reactions to making payments: some transactions caused agony while others caused joy.

Economics had traditionally considered making payments to be a rational - rather than emotional - act.1 Irving Fisher’s 1930 theory of consumer choice held that consumers trade off consumption during different points in time, with no emotion attached to the experience. Spending is typically allocated to maximize utility for the spender and deciding whether to make a payment is just a matter of distributing resources. If choosing between a designer shirt for $600 and a bargain set of three shirts for $30, for example, the rational spender would choose the second option as it maximizes the available goods per dollar spent.

However, even Fisher himself noted that the concept’s lack of emotionality was not psychologically realistic, so Zellermayer wanted to study how emotions could affect consumers’ payment choices. After all, research showed that people tend to face three issues when it comes to money:

  1. They place disproportionate weight on the present, compared to any points in the future;
  2. Losses are given greater weight than forgone gains;
  3. There are simply too many products, payment times, and payment options for consumers to work through, to optimize utility.

Zellermayer conducted a series of studies to develop his theory on how the pain associated with payment depends on a host of characteristics for each purchase.1 For the pain of paying to be weaker, Zellermayer identified six important characteristics:

  1. The transaction must be perceived to be fair;
  2. The transaction must be considered an investment, compared to pure consumption;
  3. The transaction should be an immediate payment, rather than drawn out;
  4. The expense should be undertaken for the sake of someone else;
  5. The consumer should believe they are in control over their choice; and
  6. Payment should occur before consumption, rather than after.

Zellermayer found that consumers don’t like to feel the weight of owing money, which is why they prefer to pay for a good or service before it’s consumed.1 Additionally, the more painfully a payment is perceived, the less likely consumers are to pay with cash.

Since the reluctance to buy is typically stronger than the compulsion to shop, Zellermay explored potential marketing strategies that could address reluctance to spend and the pain of paying. For example, purchases made under a bargain are especially painless, since consumers often feel positive emotions, knowing that their money bought them more than it normally would have.


Zellermayer’s PhD dissertation provided a broader understanding of consumer behavior by incorporating emotions.1 Making payments cannot be considered purely rational, since individual characteristics also influence the emotions experienced. For example, people he deemed “spendthrifts” would have difficulties controlling their spending decisions, while those he called “tightwads” would experience more pain when separating with their money.

Additionally, Zellermayer showed that the actual amount of payment tends to have less influence on the pain of payment than other contextual factors, such as whether the transaction is perceived to be fair or whether the payment is done before or after consumption. These factors are all related to mental accounting, which refers to the different values consumers place on the same amount of money, due to subjectivity.3 This observation highlights the importance of attending to said factors and adopting a realistic view of consumption behavior.

Acknowledging the pain of paying, two researchers proposed a double-entry mental accounting theory.4 The theory described the reciprocal and contradictory relationship between the pleasure of consumption and the pain of paying, through two important concepts:

  1. Prospective accounting: consumption that has already been paid for and is therefore free to enjoy.1 In cases of prospective accounting, the pain of payment is buffered by thoughts of the benefits that can result from said payment.4
  2. Coupling: the degree to which consumption reminds the consumer of their payment, or vice versa. Paying with a credit card would weaken coupling, whereas paying with cash would tighten coupling, due to differences in saliency.

This double-entry mental accounting theory ultimately proposes that pain of paying plays an important role in consumer self-regulation.

Related to Zellermayer’s idea that the pain of paying is not equal across different methods of payment, multiple researchers studied the pain of mobile payments in 2018.5 They found that using such payments were not only less painful than paying with cash, but also less painful than paying with physical cards. Researchers suggested that this may be due to the multifunctionality afforded to mobile phones: since they are not solely used for making payments like credit cards are, the saliency of payment is further decreased.6

Case Study

Physical and psychological pain of paying

Zellermayer’s pain of paying referenced the emotional distress experienced by consumers when spending money, which would be pain in the psychological sense.7 Subsequent research based on Zellermayer’s concept have considered neurological bases and their utility for controlling spending habits. Eugene Chan, an associate professor at Purdue University, however, wanted to assess the physical aspect of the pain of paying.

Around 20% of Americans experience chronic pain, which can understandably influence decision making.7 Individuals in physical pain still need to engage in consumption, so Chan wanted to know if their purchasing decisions would be similar or dissimilar to those not in physical pain. Experiencing physical pain demands attention and takes up cognitive resources, as does processing and assessing negative emotions like the pain of paying. Thus, on the basis of an attentional mechanism, Chan hypothesized that those in physical pain would experience less pain of paying relative to consumers not in physical pain.

Chan conducted a series of studies and the findings confirmed that consumers in physical pain felt less pain of paying than those who were not in physical pain.7 These findings were consistent across participants who self-reported their experiences of pain and consumption habits, as well as those who underwent experimental manipulations of pain through exposure to cold water. Additionally, it was found that the intensity of the physical injury - not the negative emotions - decreased the pain of paying, teasing apart the effects of physical and psychological pain. Whether people were distracted from their physical pain affected the magnitude of differences between those who were and were not in physical pain, providing evidence for the attention-based mechanisms originally proposed.

Chan’s findings have important implications for how the pain of paying is understood. Commonly referred to as a strategy that keeps spending in check,4  the benefits of the pain of paying may not apply equally to all consumers. Those in physical pain might be more likely to spend money, which could negatively impact their financial well-being in the long run.7 Additionally, since consumers typically experience less psychological pain when they buy discounted products, there would be no difference in purchasing intentions between those who are or are not in physical pain. Even though discounts are effective in increasing overall sales, they may have a negligible impact on consumers in physical pain.

Overall, Chan’s studies highlight important directions for future research to address, such as investigating the differences between acute and chronic physical pain, as well as spending regulation strategies for those in physical pain. Effective marketing strategies would do well to consider such differences and develop interventions to target the decreased pain of paying experienced by those in physical pain.

Treatment of compulsive buying

For some people, shopping is more than a necessity or a treat: it is an uncontrollable urge.8 Compulsive buyers feel their anxiety temporarily lifted when they make a purchase, but that anxiety begins again once their shopping trip is over. This can be a dangerous cycle, both in terms of financial well-being and coping with anxiety. While there is a good deal of research on compulsive buying, researchers from Penn State University noticed that little research focused on the social anxiety, loneliness, and lack of social support compulsive buyers experience.

The researchers aimed to study if the aforementioned social factors and spending behaviors such as the pain of paying could predict compulsive buying.8 Although compulsive buying is not classified in the DSM-5, it is considered a psychopathological disorder which leads to  uncontrollable urges to shop: in these cases, high levels of negative emotions can only be addressed by making purchases. In terms of the pain of paying, compulsive buyers tend to report less money and more credit card debt relative to non-compulsive buyers. Compulsive buyers also experience less pain of paying, so the researchers hypothesized that low pain of paying could predict compulsive buying in such individuals.

The researchers’ findings confirmed that compulsive buyers experienced less pain of paying, and thus more trouble controlling their purchases.8 This could be due partially to compulsive buyers using credit cards more often, possessing higher quantities of physical cards, and incurring more debt. This way, their loss of money is less salient, making their payments less painful.

These findings explore the pain of paying in a special population group and therefore have implications for interventions. Treatment programs for compulsive buyers - who typically shop to address their anxiety - should focus on training good money management skills, such as paying with cash and reducing the quantity of available credit cards. Such strategies could help compulsive buyers control their shopping urges, which would be the first step in practicing healthier anxiety management strategies.

Related TDL Content

Cashless effect

The cashless effect describes our increased willingness to pay through methods that don’t involve tangible money, regardless of the size of purchase. Starting to see how this is inherently related to the pain of paying? If you’re specifically curious about the cashless effect, this article will help you understand the bias!

Mental accounting

Remember that consumers will place different values on the same amount of money due to their preferences and interests. Read here about why we’re not equally impacted by purchases, why it’s important to understand this bias, and how we can avoid it.

This is your brain on money

The cashless effect, mental accounting, the pain of paying… Do we hold other biases related to financial decisions? This article covers a host of psychological biases that impact our financial decision making, and advice on how we can handle them to make smarter financial decisions.


  1. Zellermayer, O. (1996). The pain of paying. (Doctoral dissertation). Department of Social and Decision Sciences, Carnegie Mellon University, Pittsburgh, PA.
  2. Ariely, D. (2013, February 1). The Pain of Paying: The Psychology of Money [Video]. YouTube.
  3. Segal, T. (2020, November 27). Mental Accounting.
  4. Prelec, D., & Loewenstein, G. (1998). The red and the black: Mental account of savings and debt. Marketing Science, 17(1), 4-28.
  5. Pisani, F., & Atalay, S. (2018). Cashless payments, pain of paying and the role of attachment. European Advances in Consumer Research, 11, 238-239.
  6. Gafeeva, R., Hoelzl, E., & Roschk, H. (2018). What else can your payment card do? Multifunctionality of payment modes can reduce payment transparency. Marketing Letters, 29(2), 61-72.
  7. Chan, E. Y. (2021). The consumer in physical pain: Implications for the pain-of-paying and pricing. Behavioral Pricing, 6(1), 10-20.
  8. Harnish, R. J., Bridges, K. R., Gump, J. T., & Carson, A. E. (2019). The maladaptive pursuit of consumption: The impact of materialism, pain of paying, social anxiety, social support, and loneliness on compulsive buying. International Journal of Mental Health Addiction, 17(6), 1401-1416.

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