Philadelphia Bans ‘Cashless’ Stores Amid Growing Backlash

[jimmy olsen]

I vaguely thought that there was a federal requirement that you had to accept US currency, but I guess not.

https://www.nytimes.com/2019/03/07/business/cashless-stores-philadelphia.html?smid=tw-nytimes&smtyp=cur

Philadelphia Bans 'Cashless' Stores Amid Growing Backlash

By Karen Zraick
March 7, 2019

In a sign of the growing backlash against "cashless" stores around the country, the City of Philadelphia will require retailers to accept legal tender starting this summer.

Retail outlets that have stopped accepting cash say it is faster and easier for their employees to process digital payments. But critics say the practice discriminates against people without bank accounts or credit cards, or who simply prefer to pay cash.

City Councilman Bill Greenlee, a co-sponsor of the bill, said it would ensure fairness as residents complete everyday transactions.

"It just seemed to me unfair that I could walk into a coffee shop right across from City Hall, and I had a credit card and could get a cup of coffee. And the person behind me, who had United States currency, could not," he said in a phone interview on Thursday.

The new law, signed by Mayor Jim Kenney last week, takes effect on July 1 and could lead to fines of up to $2,000 on businesses that do not take cash.

But many transactions will be exempt, including those at parking lots and garages; businesses that sell goods through a membership model; rentals that require security deposits; online, telephone or mail-in transactions; and goods sold exclusively to employees.

The bill amends the city's Fair Practices Ordinance, which is administered by the Philadelphia Commission on Human Relations. Mike Dunn, a spokesman for the city, said on Thursday that the commission would have to set the penalties before the bill takes effect.

The State of New Jersey and the cities of New York, San Francisco, Chicago and Washington are considering similar bills. Dan Bryan, a spokesman for Gov. Phil Murphy of New Jersey — where both chambers of the legislature have passed the bill — declined to comment on Thursday about whether Mr. Murphy would sign the bill.

In Massachusetts, the state has had a little-known law on the books since 1978 that requires businesses to take cash. There have been recent calls from businesses to clarify whether it applies to restaurants.

Retailers and business associations around the country have opposed or raised concerns about the bills, arguing that the government should not dictate how businesses operate.

When the salad chain Sweetgreen announced it was going cashless (except in Massachusetts) in 2016, it said in an online statement that the move would free employees from making change and counting cash, speeding up transactions, and that it decreases the risk of theft.

In Philadelphia, the Chamber of Commerce for Greater Philadelphia and the Pennsylvania Restaurant & Lodging Association said that the law could deter new businesses from opening.

"It is important that Philadelphia remain competitive and a place where businesses want to locate as opposed to putting up roadblocks to future investment and business growth," Melissa Bova, vice president for government affairs at the restaurant and lodging association, said in a statement.

Amazon had also raised concerns about the bill, Mr. Greenlee said. The online commerce giant has said it will consider opening up to 3,000 cashless stores around the country by 2021. Mr. Greenlee said he believed the law's membership exemption would allow Amazon to operate cashless stores without a problem.

But Lauren Cox, a spokeswoman for Philadelphia's Department of Commerce, said that Amazon and its lawyers do not feel that the language in the law applies to their model.

"In particular, they have questioned the 'membership' portion of that line because you just need an Amazon account to access the Amazon Go stores, not a Prime membership," Ms. Cox said in an email.

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Ben Holzer, a spokesman for Amazon, declined to comment on Thursday.

A Pew Research Center study released in December found that roughly 29 percent of American adults say they make no purchases using cash in a typical week, an increase from 24 percent in 2015. Those with a household income above $75,000 were much more likely to say they did not typically use cash, the study found. The study found that African-Americans and older people were more likely to use cash.

Critics of cashless stores say they are exclusionary by nature, as low-income people may not have bank accounts because of fees and minimum balance requirements. (A report by the Federal Deposit Insurance Corporation in 2017 estimated that 6.5 percent of American households were "unbanked.") Critics have also raised concerns about privacy and data security.

Mr. Dunn said that with a 26 percent poverty rate in the city, officials in Philadelphia were focused on finding ways to increase access to banking services for all residents.

"But until we can resolve the hurdles facing the unbanked, we need to remove any obstacles that could prevent them from enjoying all amenities of this city," he said in a statement.

He added that the mayor had signed the bill "despite our continued concerns about how this legislation might impact innovation in our retail sector."

"We will continue to monitor this, as we face the ongoing challenge of growing our economy while ensuring that growth is inclusive," Mr. Dunn said.

[ulmont]

I vaguely thought that there was a federal requirement that you had to accept US currency, but I guess not.

Let's ask the Treasury Department!

"I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?"

The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

https://www.treasury.gov/resource-center/faqs/currency/pages/legal-tender.aspx

[jimmy olsen]

Excellent find Ulmont.

I feel like it should be required.

[The Brain]

In Sweden cashless places do not cause any problems. What makes the US so special?

[Zoupa]

In Sweden cashless places do not cause any problems. What makes the US so special?

Yes yes Sweden is paradise on earth we get it.

[The Brain]

In Sweden cashless places do not cause any problems. What makes the US so special?

Yes yes Sweden is paradise on earth we get it.

If the US thinks cash is the future then I'm just a bit curious why.

[garbon]

In Sweden cashless places do not cause any problems. What makes the US so special?

Yes yes Sweden is paradise on earth we get it.

If the US thinks cash is the future then I'm just a bit curious why.

It appears you've drawn an erroneous conclusion.

[garbon]

https://www.npr.org/2019/02/11/691334123/swedens-cashless-experiment-is-it-too-much-too-fast?t=1552208330098

Sweden's Cashless Experiment: Is It Too Much Too Fast?

Cash is still king around the world, but there are pockets of places, especially in Europe, moving away from cash. And no one is dropping cash as fast as Sweden.

In 2018, only 13 percent of Swedes reported using cash for a recent purchase, according to a nationwide survey, down from around 40 percent in 2010. In the capital, Stockholm, most people can't even remember the last time they had coins jingling in their pockets.

By contrast, around 70 percent of Americans still use cash on a weekly basis, according to a recent study by the Pew Research Center.

In Sweden, however, especially in bigger cities, going cashless is becoming the norm. Purchases usually happen as digital transactions — by card, online or with Sweden's most popular mobile payment app, Swish.

"It's good for both the guests and for us," says Christopher Loob, general manager of Urban Deli, a restaurant and ecological food company in Stockholm that stopped accepting cash a year ago. "It's saved us a lot of time in that we don't have to count cash anymore. There's hardly been any reaction. Almost everybody has the alternative payment method — a credit card."

The trend has spurred Ikea to test making its store in Gavle (about 100 miles north of Stockholm) completely cash free. And Ahlens, the country's largest department store chain, is also experimenting with the concept in some locations. Buses and trains no longer take bills or change. Nationwide rail company SJ has even started allowing customers to store digital tickets on microchips in their hands.

But all this change has also spurred a debate in the Nordic nation over the consequences of how quickly Sweden is going cashless, especially for the most vulnerable groups in society. Many retirees, people with disabilities and newly arrived refugees struggle with digital transactions.

"If you go to a bar or if you go to some shops, they say to you that the only way to pay is to pay with cards or this Swish system," explains 75-year-old Christina Tallberg, who is president of the Swedish National Pensioners' Organisation.

She says that even going to public toilets can pose a problem. These often cost 10 kronor (around a dollar) in Sweden, but the toilets rarely accept cash these days.

"This is both a personal problem, but it's also a problem for the civic society," Tallberg says. "As long as it's legal to pay with notes and coins, it must be up to the individual to choose how you will do your payments."

Another concern is that the majority of local bank branches have stopped letting people take out cash or even bring cash into the bank. Even Sweden's central bank — the Riksbank — which largely supports the transformation of the country's payment system, has also argued that going completely cashless can be risky.

"We would like to see the banks continuing supplying their customers with cash services," says Bjorn Segendorf, an adviser in the Riksbank's payments department. "It gives the freedom of choice for consumers. It's also [because] still there are people who are dependent on cash."

He says that many of those working in the financial sector have been "taken by surprise" by the speed at which Sweden seems to be phasing out cash.

"Most countries are pushing digital technology, and if you are successful, this will have consequences for cash," Segendorf says. "You have to realize this early, and I think we were too late with that."

...

[The Brain]

https://www.npr.org/2019/02/11/691334123/swedens-cashless-experiment-is-it-too-much-too-fast?t=1552208330098

I'm not sure what your takeaway is.

[garbon]

Not all sunshine and roses + the percentage of Americans who use cash is higher. I don't think there is an issue with setting up a plan to reduce use of physical cash, but at least Americans are noting it is too soon to be rolling out.

[The Brain]

Not all sunshine and roses + the percentage of Americans who use cash is higher. I don't think there is an issue with setting up a plan to reduce use of physical cash, but at least Americans are noting it is too soon to be rolling out.

Seems to me that if enough customers want to use cash enough stores will keep accepting it voluntarily.

As a professional with no kids I can easily afford the higher prices forced cash handling would bring, but poor people are not so lucky.

[Josquius]

I'm sure I recall reading about issues in Sweden with elderly people being a bit left out by the move to cashless, having to venture ever further to find a shop that works, etc...

[The Brain]

I'm sure I recall reading about issues in Sweden with elderly people being a bit left out by the move to cashless, having to venture ever further to find a shop that works, etc...

Nothing stops them from going cashless themselves, and indeed many many elderly do.

[garbon]

I'm sure I recall reading about issues in Sweden with elderly people being a bit left out by the move to cashless, having to venture ever further to find a shop that works, etc...

Nothing stops them from going cashless themselves, and indeed many many elderly do.

There are plenty of things that can stop them.

[Eddie Teach]

Does the Swedish government give out free credit card readers? There are lots of transactions where cash is the only practical method of exchange.