Avoid the ‘awkward tax’ this World Friendship Day: Aussies uncomfortable asking friends for owed money

July 30, 2024, Sydney – As we celebrate the International Day of Friendship (30 July), PayPal research reveals Aussies stand to be significantly short-changed due to social sensitivity around asking friends to pay them back.  

Left holding the bag short-handed  

Half (50%) of Australians say they feel awkward or uncomfortable asking their mates to settle up, and two-in-five (44%) say they decide not to chase money they’re owed for that reason. About half (46%) are prepared to wear the extra expense, paying for things like meals, coffee runs, or group activities, knowing they won’t be paid back in full by everyone.  

All this little loan forgiveness adds up, as Aussies estimate they are about $1,350 out of pocket on average from friends failing to pay back.   

As a result, one-in-five (22%) say they steer clear of activities with certain people because they know they won’t be reimbursed, and one-in-six (16%) avoid picking up the bill to prevent people from owing them money.  

The worst offenders and liabilities 

Considering the people in their lives who are least likely to balance the books, half (50%) of Aussies say their friends are the worst at paying them back, followed by co-workers (22%) and adult children (17%).  

When asked which situations are most likely to leave a hole in the budget, two-in-five (42%) say picking up the bill for a group meal, a third (32%) say picking up takeaway food for the crew, and the same proportion (32%) named organising and buying a group gift. The next activities most likely to leave us in the red are going for a coffee run (30%) and buying a round of drinks (29%).    

Tech to the rescue  

To help overcome their restitution reluctance, many Aussies are turning to tech to help limit embarrassing exchanges. A quarter (24%) say they are more comfortable sending an electronic payment request for money they are owed rather than asking in person. This rises to more than a third (35%) for Aussies under 35-years-old.  

Three-in-ten (29%) say they prefer to split bills using an app, like PayPal, rather than chasing individuals directly to pay their share. This jumps to almost half (45%) of Aussies under 35.  

Not All Aussies     

The research showed that many Aussies take their repayment responsibilities very seriously, with three-in-five (63%) always ensuring they pay up before the need to be reminded, and two-in-5 (38%) feeling embarrassed if someone needs to remind them. Two-in-five (41%) say they prefer to have money owed to them, rather than owing someone else money and this sentiment is strongest among Boomers (50%) compared to under 25-year-olds (31%).   

Only 10% admit they sometimes forget to pay people back before they need to be reminded, but this jumps to a quarter (26%) of those under 25 and drops to just 2% of Boomers. One-in-10 (9%) say they sometimes lose track of whose shout it is for a round of drinks and miss their turn. 
 
Bonnie Brady, Consumer Insights Expert at PayPal Australia said, “With Australians keeping a close eye on their spending with the current cost-of-living pressures, it’s really important to make sure money doesn’t create tension in relationships,” Bonnie said. “While we should all strive to be more fearless to ensure fairness, it’s great to see that Australians are finding value in features like PayPal’s payment requests and bill splitting to take some of the sting out of sensitive situations.”  

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