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Businesses Hit Snag with Digital-Only Payments

“This is America. How can you not accept cash as payment? It’s the most unpatriotic, illegal thing I have ever heard,” Rolly Byrd yelled across the counter of a D.C.-area Sweetgreen to the store’s assistant manager. The exchange, which ended with the associate comping Byrd’s $16 salad, was just one of many the store’s workers said they had experienced since the store went cashless.

“I understand completely why people are up in arms about the store not accepting cash because it does go against the principles of paper money as ‘legal tender’ which is the law of the land, but the move streamlines the payment process and most of our customers enjoy the convenience,” one associate Kimberly told The Informer.

Additionally, Sweetgreen co-founder Jonathan Neman told Business Insider said that with the focus removed from counting tills and balancing registers, associates had more time to ensure the quality of prep process – which made for an overall better dining experience. Going cashless, he said, also reduced the threat of theft or robbery.

Sweetgreen was at the forefront of the cashless trend back in 2016 when it decided to accept only credit and debit cards. But in 2019, the chain reversed its decision, saying in a statement, “Going cashless had these positive results, but it also had the unintended consequence of excluding those who prefer to pay or can only pay with cash. To accomplish our mission, everyone in the community needs to have access to real food.”

Sweetgreen associate Kimberly spent time explaining to customers the store's cash-free policy and directing them to new signs of the change posted as doors and registers. That decision has been challenged and rescinded by most area retailers as of 2019. (Shantella Y. Sherman/The Washington Informer)
Sweetgreen associate Kimberly spent time explaining to customers the store’s cash-free policy and directing them to new signs of the change posted as doors and registers. That decision has been challenged and rescinded by most area retailers as of 2019. (Shantella Y. Sherman/The Washington Informer)

They were not alone.

The rise of cashless establishments worked in tandem with growing digital innovations that made transactions quick, easy, and efficient. In D.C., But in places like San Francisco, Philadelphia, and New Jersey, cash-free or cashless stores raised the ire of residents and lawmakers alike.

In February 2019, Mayor Jim Kenney signed off on the law prohibiting most retailers from refusing to take cash or charging cash-paying customers extra, making Philadelphia the first major U.S. city to ban cashless stores. Violators can face fines of up to $2,000 per violation. San Francisco, New Jersey, Washington, New York, and Chicago have all introduced their own versions of legislation banning no-cash retail. In 2020 a bill that would require District retailers to accept cash was introduced by Council member David Grosso (I-At Large) that targeted businesses that had stopped accepting paper money.

At the February hearing, Capital Area Asset Builders Executive Director, Joseph Leitmann-Santa Cruz stated: “In order to participate in a cashless economy, a consumer needs to rely on a debit card, linked to a bank account, a credit card, or a payment app, which is linked to either a bank account or a credit card. According to the Federal Deposit Insurance Corporation (FDIC), low-income and communities of color disproportionately constitute households that do not have a bank or credit union account or rely on alternative financial services. When it comes to having a relationship with mainstream financial services. District of Columbia households score among the lowest in the nation.”

Leitmann-Santa Cruz said that the most recent FDIC report, almost one third of DC households are either Unbanked (8 percent) which are households with neither a checking nor savings account, or Underbanked (21 percent) which are households that may have a bank account yet still rely on alternative financial services.

According to the American Civil Liberties Union (ACLU) one of the greatest drawbacks to cash-free transactions is theft or loss.

“That security risk is real, and we’re certainly not going to tell anybody they should always use cash, especially for large purchases. That said, the security considerations are not one-sided. The harms that can result from privacy invasions (abuses, profiling, embarrassment, financial losses, etc.) should also be included in the concept of “security,” properly conceived,” they reported. “And payment networks have security risks that cash does not; ask anybody who has experienced identity theft and was forced to wrangle with a nightmare mix of credit card companies, debt collectors, credit scoring agencies, and others.”

The ACLU concluded that going strictly digital can be 1) Bad for privacy because it introduces a middle man to transactions – in the way of data collectors – who learn what you purchase and from where with each transaction; and 2) Bad for low-income communities who tend to be unbanked or underbanked and subsequently have no access to debit or credit cards. Minority and undocumented communities also face challenges to obtaining bank accounts and government-issued identification cards, further complicating their access to digital payment platforms.

Even with COVID-19 initially impacting the use of cash as many retailers went “contactless,” there was never a time when cash was completely restricted.

“I’ve enjoyed the ability to order food online or through an app, pay for it, and pick it up without having to stand in line. It’s like being one of The Jetsons, where you barely place the order before it’s in your hands,” Northwest resident Evangeline Dow told The Informer. “I do have a major problem, however, with stores banning the use of cash because not everyone is comfortable uploading their credit card information into apps or trusting that their banking data will not be compromised through some sort of breach. The important thing is having options to use either – that is the American way.”

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