What is a significant risk of using cash for purchases?

Using cash for purchases presents a significant risk related to the lack of fraud protection. Unlike credit and debit cards, which often have built-in security features such as fraud monitoring, zero liability policies, and the ability to dispute charges, cash does not offer such protections. Once cash is spent, it cannot be traced, replaced, or recovered if lost or stolen. This contrasts sharply with electronic methods, where fraud can be reported to financial institutions for potential reimbursement or investigation.

While concerns about overspending, interest generation, and theft exist, they do not directly compare to the pervasive and inherent risk of using cash without any protective measures. Cash transactions are final and often unrecorded, making them particularly vulnerable to loss through theft or mishandling without avenues for recourse.