Over the past years and with the increase in online shopping, digital receipts are becoming more and more popular. However, before making any moves, consider the pros and cons and whether it’s appropriate for your business to make the switch. 

In this article, we discuss the advantages and disadvantages of digital receipts and what they can mean for your business.

What is a digital receipt?

A digital receipt is a digital version of your receipt. You might have also heard them referred to as electronic or e-receipts.

Most of the time, businesses send a digital receipt to your phone or email address after making an online purchase. In recent years, stores also have had the option to send your receipts digitally.

Like any other type of receipt, a digital receipt is proof of payment without all the paper clutter. For that reason, this receipt type is considered more convenient than paper receipts, since digital receipts are less likely to get lost, fade, or save paper. 

For customers, having a digital version of your receipt makes it easier to sort and organize. A digital receipt is also an efficient way to write expense reports and file taxes for businesses. 

What’s the difference between digital receipts and e-receipts?

Digital receipts are very similar to e-receipts. The difference between digital and electronic receipts is that digital receipts represent physical documents, a receipt.

In contrast, electronic receipts originate from within a computer system. Both can be sent through text message or email.

Essentially, they both represent that a transaction has taken place and therefore serve the same purpose.

What’s the difference between paper receipts vs. digital receipts?

Coffee 66 paper and digital receipt, epoppay
Coffee 66 paper and digital receipt, epoppay

There is no difference between a paper and a digital receipt. One is a physical copy of a receipt, and the other is a digital copy.

Both act as a payment confirmation and record the details of the transaction.

Pros and cons of paper receipts

The pros and cons of paper receipts Pros - The more preferred form of receipts - Most businesses are used to issuing paper receipts Cons - Can get lost - Can get damaged - The ink can fade - Too many receipts can result in paper clutter
The pros and cons of paper receipts

A survey done by GreenAmerica found that 42% of people prefer paper receipts, while only 17% prefer digital receipts. This statistic is expected as it is common to receive paper receipts and most people feel familiar with them. 

Since most people still prefer paper receipts, many businesses are reluctant to use paperless receipt options in their transactions since people feel more secure and comfortable with paper receipts.

However, managing paper receipts can be a handful. First, you need to make sure that each paper receipt is not damaged or lost. Additionally, they need to be stored in a cool place since they are made from thermal paper.

Thermal paper will change color when exposed to heat, Wikimedia Commons
Thermal paper will change color when exposed to heat, Wikimedia Commons

Finally, storing paper receipts in a physical filing system can result in a mountain of paper clutter. An unorganized storage system may result in hours of searching for that one lost receipt.

Pros and cons of digital receipts

The pros and cons of digital receipts Pros - Convenient - Less likely to get lost or damaged - Won't fade - Reduces paper clutter - Users can easily search and organize receipts Cons - Can be sent to your spam or junk mail - People prefer paper receipts but want businesses to offer digital options
The pros and cons of digital receipts

Digital receipts are convenient. Compared to paper receipts, they are less likely to get lost, won’t fade, and don’t require paper, thereby reducing paper clutter. While digital receipts can get lost in your spam or junk mail, that issue can be fixed in your email settings.

There’s been an increase in contactless and online shopping, which has resulted in digital receipts being used more and more frequently. Even though Green America found that 42% of people prefer paper receipts, RetailDive’s survey saw 89% of respondents want retailers to offer digital receipts as an option.

Overall, paper and digital receipts are both similar to each other. The receipt format comes down to preference, especially as a consumer. However, the option to hand out digital receipts or switch your receipts’ format should be considered if you are a business owner.

Should your business switch to a digital receipt?

If your business is online, you don’t have to worry about switching to a digital receipt system since all your transactions are already done electronically.

However, if you own or manage a brick-and-mortar business, you may wish to consider switching to a digital receipt format.

Here, we list the pros and cons of issuing a digital receipt to customers: 

Pros

The pros to switching to a digital receipt format Environmentally friendly - Paper receipts can not be recycled - No more printing or wasting paper Cost-saving - Save between $5,475 to $18,250 per year by not printing receipts Easier storage - Everything is digital - Easily search and organize your receipts
The pros to switching to a digital receipt format

Environmentally friendly

Did you know that you can not recycle paper receipts? The Minnesota Pollution and Control Agency found that a single receipt can contain 250 to 1,000 times more BPA (Bisphenol A) than a can of food. The chemicals in receipts aren’t enough to pose any serious health risk, but BPA makes recycling receipts impossible. Additionally, printing receipts can produce almost 300 million pounds of solid waste. 

By being more eco-conscious, your business matches consumers’ eco-conscious shopping habits and is more eco-friendly. So, if your business is making a conscious effort to be more sustainable, then consumers will take notice of your business.

By switching to digital receipts, you are helping the environment—with the happy benefit of potentially gaining new customers.

Cost-saving 

It can cost between $0.015–0.05 to print a receipt. While that may not seem like much, printing about 1,000 receipts daily could cost between $5,475 to $18,250 per year.  

Thus, switching to a digital format will save you a lot of money annually. 

Easier storage

Each year, American offices use 4 million tons of paper, while the average worker uses 10,000 sheets of paper. While some of this paper will be recycled, most will be used for document storage. However, once you’ve accumulated various and numerous documents, it becomes harder to search through, organize, and even email or fax them, especially with receipts where you want to track your expenses and get reimbursed.

Storing digital receipts becomes simple when you use a digital filing system or receipt management software to take control of your documents.

We recommend using Shoeboxed to keep track of your receipts. Shoeboxed can turn any paper documents into digital data, including business cards. Easily export weekly or monthly business expenses with receipts attached to send to your accountant. With any of Shoeboxed’s plans, you can use their prepaid Magic Envelope to send in piles of receipts and outsource receipt scanning so you don’t have to scan them yourself.

How to send your receipts with Shoeboxed’s Magic Envelope

Cons

The cons of switching to a digital receipt Technical knowledge - Need to understand the receipt software - Know how to send the receipt to specific customers Data security concerns - A risk of being hacked - Could lose your customer data - Could lose your digital records Get lost in your emails - Get send to the wrong inbox - Infrequent email checks can result in missed invoices
The cons of switching to a digital receipt

Requires some technical knowledge

Digital receipts will require a little technical knowledge to make the transition from a paper receipt system.

At the most basic level, you will need to use and understand your chosen software in order to send the receipt to customers. Without this knowledge, there might be problems processing the order and delivering the receipt to them. 

Other software aspects include knowing how to use analytics data, how to calculate the number of sales for the week, etc.

Data security concerns

Anything digital or online has a risk of being hacked. That doesn’t mean that digital receipts are not safe. However, there is a chance that your system could be compromised, which means that your customer information and data could get into the wrong hands. Additionally, your business has a risk of your digital records being lost. 

If this situation were to happen and if you have not backed up your files, your business may face difficulties, and you may run the risk of losing your customers’ trust. 

For these reasons, people tend to feel more comfortable with paper receipts. 

Stuck in spam

Sometimes, digital receipts can fall into customers’ spam or junk inbox, resulting in a “no-show.” Additionally, if invoices are sent to your email, you can easily miss a payment if you check your email infrequently.

An easy fix is that once you find your receipt, you can go into your email setting to make sure that you’re able to receive emails from a specific person or business. 

How to create a digital receipt?

There are plenty of digital receipt creation softwares, such as Wave or Skynova, that have receipt templates for you to use. All you need to do is to gather and input the following business information:

  • Business logo
  • Name of your business
  • Address (including county, city, and zip code)
  • Item
  • Description
  • Price of item
  • Quantity
  • Amount for the item
  • Tax rate 
  • Discount
  • Total amount

Frequently asked questions

Are digital receipts legal?

Digital receipts are completely legal. As of 1997, the IRS will accept scanned and digital receipts as valid records for tax purposes.

Can I digitize my paper receipts?

Yes, you can. Using a receipt scanner and organizer can help you digitize your paper receipts. You can also use an app like Shoeboxed to help you scan your receipts quickly. Additionally, Shoeboxed offers their Magic Envelope service, where you can outsource your scanning, and your receipts will be in your Shoeboxed account.

In closing

Digital receipts are a great option for those looking for ways to be more eco-friendly. Despite some cons, the pros to switching over to digital receipts are plentiful and merit consideration for businesses looking to streamline their processes.

About Shoeboxed!

Shoeboxed is a receipt scanning service with receipt management software that supports multiple methods for receipt capture: send, scan, upload, forward, and more!

You can stuff your receipts into one of our Magic Envelopes (prepaid postage within the US). Use our receipt tracker + receipt scanner app (iPhone, iPad and Android) to snap a picture while on the go. Auto-import receipts from Gmail. Or forward a receipt to your designated Shoeboxed email address.

Turn your receipts into data and deductibles with our expense reports that include IRS-accepted receipt images.

Join over 1 million businesses scanning & organizing receipts, creating expense reports and more—with Shoeboxed.

Try Shoeboxed today!