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Lawmakers and consumers challenge cashless retailers

By Balance Innovations staff

04 Jun 2020 - 00:00:00

This blog was originally published by Balance Innovations.

Amid the COVID-19 pandemic, cashless stores and restaurants are becoming more popular. And that’s not necessarily a good thing: some retailers who experimented briefly with cashless operations have reversed their decisions ­as a result of complaints from consumers, or as local and state governments enact laws to protect those without bank accounts.

As the cashless debate continues across the U.S., several cities and a few states have enacted laws that prohibit retailers from refusing to accept cash. Groups largely shut out by cashless retailers are low-income minority populations. In fact, more than 8 million Americans households – 6.5% of the population – are unbanked.

But it’s not just lower-income groups without credit or debit cards that favor cash transactions at checkout. As massive data breaches among giant retailers and financial institutions proliferate, some consumers prefer cash transactions in order to protect their privacy and financial integrity. Others favor cash because it allows them to better budget and track their expenditures.

Equal opportunity legislation

The politics of cash has officials in some places taking measures to protect the freedom of payment choice. Consider the following:

  • Philadelphia enacted a “payment of choice” law in 2019, banning cashless stores.
  • New Jersey and San Francisco passed similar legislation last year as well, requiring most retailers to accept cash, with New York City following suit in early 2020.
  • The fight for laws to protect the unbanked continue in Chicago.
  • Similar legislation is under study in Washington, D.C., another city with a large low-income population.

In some states, going cashless is not even an option because of long-standing laws that protect the rights of all consumers to pay their bills however they wish.

  • Massachusetts has prohibited retailers from refusing cash payments since 1978.
  • Pennsylvania passed a law in 1984 that businesses cannot refuse services to people who don’t have credit cards. The 2019 Philadelphia law underscores equal rights for consumers at the checkouts.

Failed experiments

A high-profile business that tried cashless operations is Sweetgreen, a growing, health-conscious salad restaurant with 91 stores in eight states. Sweetgreen announced in December 2016 that it would go cashless in order to speed up customer service and reduce the risk of robbery. In April 2019, however, the chain said it would resume accepting cash at all locations.

“Going cashless … had the unintended consequence of excluding those who prefer to pay, or can only pay with cash,” Sweetgreen said in a statement. “Ultimately, we have realized that while being cashless has advantages, today it is not the right solution to fulfill our mission.”

Even Amazon Go, a grab-and-go convenience grocery chain with no cashiers, is offering cash payments in some cities, citing legislation that protects cash-only consumers. The company plans to accept cash at all of its stores over time.

Advanced cash management

In light of the trend toward laws that protect consumers payment preference, it’s essential to embrace innovations that make cash more efficient and secure for businesses. That’s why we’ve made cash management simpler than ever with Brink’s Complete. Click here to learn more.

Read about cash myths that are impacting businesses by checking out our Cash Myths page.