Lawmakers Want Cashless Stores to Cash Out
Amazon may do lots of business in New Jersey, but it isn’t likely that the e-commerce giant will open an Amazon Go store in the Garden State anytime soon. That’s because the Go format’s payment system eliminates the use of cashiers or cash—and Gov. Phil Murphy has just signed a law banning cashless stores statewide.
Philadelphia recently did the same at the municipal level, and city officials in New York, San Francisco and Washington, D.C. are considering similar measures, CNN reported.
A retailer doesn’t need to be as technologically advanced as Amazon Go to fall under the heading of cashless. Simply requiring that customers pay with plastic or apps will suffice. The Sweetgreen fast-casual chain has done this since 2017, and earlier this month Mercedes-Benz Stadium in Atlanta became the first pro sports facility to do so.
Advocates of cashless stores say it’s safer, cleaner for more employees and more efficient to operate that way. Yet opponents say it excludes millions of Americans who don’t have bank accounts.
“While card-only may be convenient for some businesses, it can actually be discriminatory against poor communities that don’t have as much access to banks or lines of credit,” New Jersey State Sen. Nellie Pou, who sponsored the state’s new law, told CNN.
While there’s no federal law requiring retailers to accept cash, the fact is that Americans use cash in 30% of all transactions, according to a 2017 survey from the Federal Reserve Bank of San Francisco. CNN reported that people use cash for most purchases under $10. And cash is also still the most common form of payment for people with annual incomes of less than $25,000.
Around 8.4 million U.S. households, or 6.5% of the country, didn’t have a checking or savings account, CNN reported, citing the most recent FDIC data. Another 24.2 million households, or close to 19%, are “underbanked,” meaning they have a bank account but also use other financial services such as money orders, check cashing or payday loans.
Leo Kremer, founder of Dos Toros—another fast-casual chain that has gone cashless—is sympathetic to those who don’t have access to banks or credit. Yet, he wrote a letter to the New York City Council recently, saying that a proposed law to ban cashless stores in the city was “well-intentioned” but also “ill-advised and burdensome regulation.”
In his letter, Kremer wrote, “Let’s pull those members of our community forward into the modern financial system, rather than pulling the business community backward.”
For comments, questions or concerns, please contact Paul Bubny
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