“Would you like your receipt?”
“With you or in the bag?”
“Do you want a copy of your receipt?”
Every financial purchase ends with these questions. Even online, when you’re not verbally asked, you’re often redirected to a confirmation page or sent an email to service as a record of your purchase. There’s a reason why receipts are everywhere; they’re useful. At least, that’s what we’re told. But apart from returning items, how often does the average person use their receipts, and how often do they collect at the bottom of a shoebox for all eternity?
Luckily, there’s been a push towards digital receipts, which at least saves some space and paper. But what do we even need receipts for anyways? And when can we say goodbye to paper receipts forever?
Which Receipts Do You Really Have to Keep?
It’s obvious that you don’t actually need every receipt. No one has burst into flame after leaving their receipts from Billy Bob’s Burgers at the bottom of their purse. In fact, it’s fair to say that most receipts you don’t need. It’s probably a good idea if you’re not sure about that item and think you might have to return it, but otherwise, how do you know when to keep a receipt?
Well, if it’s attached to item with a warranty, you should keep the receipt at least as long as the warranty is applicable. You’ll want to prove that you own the item and that you actually purchased the warranty if the manufacturer ever asks. Warranties tend to be on items with big price tags, like appliances, so it’s definitely worth it to hang onto that receipt!
Otherwise, receipts should mainly be kept for deductions and other tax purposes. If you think there’s any chance that a purchase might qualify for a deduction, hold on to the receipt just in case. However, there are some broad categories to watch out for:
- If you put the expense on a credit or debit card, you should at least keep the receipt until that amount has cleared your account, preferably until you can double check your monthly statement.
- Any proof of medical expenses ought to be kept. Physical therapy, prescription costs, and even some doctor’s visits are tax deductible.
- Keep the receipts of any business expenses! Whether you’re self-employed or simply have a company credit card, you’ll want a record of what you spent. If you are a business owner, you’ll want to have proof of purchases in case the IRS audits you, and if you’re an employee, you don’t want to show up empty handed when your boss has an audit looming over them.
- Charitable donations are also usually tax exempt, so always ask for a receipt when you donate.
That’s Great, but Can’t We Just Go Digital?
So you understand that receipts are needed for tax purposes, but since the IRS accepts scanned and digital receipts anyway, why do we even bother keeping those slips of paper? Not only do they clog up your wallet, but they have a horrible environmental impact. Creating receipts consumes millions of trees and gallons of water for the US alone, and the option for digital receipts is already integrated into many card readers.
Now, to be fair, not everyone in America has a smartphone or even an email address. That might seem inconceivable to you. After all, you’re reading a finance blog on the Internet, presumably during your free time (though no judgement if you’re on the company clock). But the fact is that digital receipts aren’t an option for everyone. Even if consumers were willing to give every retailer their email address or invest in a scanner, this doesn’t solve for the still significant percentage of Americans who refuse to interact with the digital world.
Until then, going to a system of paperless receipts can’t be a reality. We can decrease our reliance on paper receipts, but ultimately they’ll still be around for a while. Since receipts are so necessary, mainly for taxes, we can’t have a society where some people are unable to access proof of their purchases. So, are paper receipts outdated? Yes, but that doesn’t mean that they’re going anywhere.
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