New Jersey legislators last week passed a bill with overwhelming support to prevent businesses from banning consumers from using cash for purchases. The bill, which now goes to Gov. Phil Murphy for his signature, would make New Jersey only the second state to protect cash-using customers in stores.
The proposed law, A591, applies only to point-of-sale purchases and excludes mail, telephone and Internet sales. Car-rental companies are exempted. The legislation passed the state Assembly Friday on a 71-2 vote following the state Senate’s 39-0 endorsement Thursday.
“Many people do not have access to consumer credit, and any effort by retail establishments to ban the use of cash would be discriminatory towards those people,” one of the bill’s main sponsors, state Rep. Paul D. Moriarty, D-Camden/Gloucester, said in a news release issued by Assembly Democrats. “The U.S. dollar is legal tender and should be accepted at any retail establishment in New Jersey.”
Moriarty and other sponsors criticized Visa Inc.’s “Visa Cashless Challenge” marketing effort that rewarded 50 food-service businesses with $10,000 each in 2018 for best explaining how making their purchase systems cashless would improve their operations.
“Credit card companies providing incentive to small businesses if they commit to updating their digital payment technology and not accepting cash transactions is simply unfair to those who prefer to pay in cash,” said state Rep. Verlina Reynolds-Jackson, D-Mercer, in the release. “The intent of this bill is to ward off any potential discrimination and allow consumers to pay in the method of their choosing.”
But a Visa spokesperson tells Digital Transactions News by email that “making their payment technology completely digital was by no means a requirement or ask of the Challenge.”
“Visa’s vision of a cashless future reflects how payments are evolving with customer behavior,” the spokesperson says. “It means helping people pay with cards, phones, watches, wearables or whatever payment method comes next, while adapting with businesses to accept them as they emerge. It also means respecting those who still wish to accept or pay with cash, while expanding access to cashless payments for everyone, everywhere.”
The New Jersey bill would subject violators to a civil fine of up to $2,500 for the first offense and $5,000 for the second. Further violations would be considered unlawful practices under the state’s Consumer Fraud Act.
If Murphy, a Democrat, signs the bill, New Jersey will join Massachusetts in banning cashless point-of-sale purchases, according to NJ.com, a news site affiliated with the Newark Star-Ledger. Massachusetts passed its ban back in 1978, according to NJ.com.
Recent research presents conflicting data about Americans’ usage of cash, according to an article in the new February edition of Digital Transactions magazine. A Federal Reserve study released in December found that ATM withdrawal transactions at large banks declined by 2.8% from 2016 to 2017. And the Washington, D.C.-based Pew Research Center says one of its studies found that 24% of U.S. adults make no cash purchases during a typical week.
But David N. Tente, executive director for the U.S. and Americas at the Sioux Falls, S.D.-based ATM Industry Association, notes the Fed also found that withdrawal amounts are increasing. “People are taking out more money,” he told the magazine.