The findings show that cash has regained its popularity as a means of payment over the past year, as shoppers become increasingly reluctant to spend money they have not got.
BRC says cash is now used for 60% of all transactions, up from 54% last year. Measured by value, cash is used for 34% of retail spending compared with 32% a year ago.
Director general Stephen Robertson said: "Reports of the death of cash are premature. Cash is thriving."
The BRC's Cost of Collection survey includes results from 17,000 shops, covering multiples and independents.
The report also highlights the extra costs that card companies impose on retailers for processing transactions - on average 24p for credit cards. The BRC accused card companies of pushing cashless payment methods as a way of boosting revenue.