Does Cash Need Legal Protection in Stores?

Efforts to ban cashless stores are afoot in New Jersey and some of the nation’s largest cities, including New York. But does cash really need legal protection from payment cards and mobile wallets?

That’s the question public officials as well as payments and retail executives are mulling. Opponents of cashless stores say businesses that require customers to use credit or debit cards or mobile payments are shutting out consumers who may not have access to those payment forms.

A mid-February report released by a New York City Council committee says 11.7% of the city’s households are unbanked compared with 7.7% for the U.S., and 25.1% of city households are underbanked versus the nation’s 20%.

“The unequal impact of cashless policies is cause for concern,” the report says. “While the technology provides a range of benefits for business owners, relying solely on cashless payments generates a segregated purchasing system. This policy poses great harm for certain parts of the populations, and statistics show that this is disproportionally felt by poor, marginalized and vulnerable communities.”

The Council is considering two proposed ordinances pertaining to cash usage. One would ban retailers and restaurants from refusing to accept cash. First-time violators could be subject to a fine of $250, with $500 fines for subsequent violations. The other would permit cashless stores but require owners to post clear signage about their payment policy.

The Philadelphia City Council on Feb. 14 passed an ordinance that would prohibit most stores from refusing to accept cash or charging cash-paying customers a higher price, according to Philly.com, a news site affiliated with The Philadelphia Inquirer. The measure went to Mayor Jim Kenney for his signature. Another pro-cash measure is pending in Washington, D.C., according to press reports.

The National Retail Federation questions the need for legislation to protect cash from its electronic enemies.

“Retailers are not going cashless,” J. Craig Shearman, vice president for government affairs public relations at the Washington-based trade group, tells Digital Transactions by email. “The retail industry as a whole welcomes cash and most likely will for years to come. The examples of retailers turning down cash are very few and isolated, and usually involve specific circumstances.”

But Bruce Wayne Renard, executive director of The National ATM Council Inc., says the Jacksonville, Fla.-based trade group of ATM deployers and suppliers supports the recent proposals.

“There is a significant portion of America’s population that are unbanked or underbanked, making most or all of their daily payments using cash,” Renard says in an email. “These citizens, typically in lower socio-economic strata, should not be locked out of access to goods and services simply because they don’t have a credit card or mobile wallet to make a purchase. There is a basic ‘fairness/non-discrimination’ aspect to businesses not accepting cash, and this is what’s at the heart of the local and state legislation that has surfaced of late in our major cities.”

A New Jersey bill that would ban stores from banning cash at the point of sale recently passed both houses of the state Legislature by overwhelming margins and was awaiting Gov. Phil Murphy’s signature in mid-February. A spokesperson in the governor’s office wouldn’t say if he would sign it. If enacted, New Jersey would join Massachusetts as the only states to protect cash payments in stores.