Philadelphia Bans Cashless Stores

Opponents point to low-income and “unbanked” consumers as the reason.

March 11, 2019

PHILADELPHIA, Pa. – The City of Brotherly Love has become the first major U.S. municipality to ban cashless stores, according to the Wall Street Journal.

Starting in July, Philadelphia’s new law will require most retail operators to accept cash for purchases. Other cities and states also have concerns about “no cash” retailers. A similar law is being pushed in New York City, and New Jersey’s legislature recently passed a bill prohibiting cashless stores statewide, but it has not yet been signed into law by the governor. Currently, Massachusetts is the only state that requires retailers to accept cash.

The measures seek to stop a “no-cash” trend that could accelerate thanks to Amazon’s highly publicized testing of cashless retail technology and rollout of Amazon Go stores. Retailers that have gone cashless say the system is more efficient for employees, who don’t have to make change, count cash at closing or worry about making large bank deposits.  

As reported previously in NACS Daily, opponents say the system puts low-income and “unbanked” consumers at a disadvantage. They are concerned about consumers without credit or debit cards and add that some shoppers prefer to use cash for personal and privacy reasons.

“Most of the people who don’t have credit tend to be lower income, minority, immigrants,” said William Greenlee, a Philadelphia city council member. “It just seemed to me, if not intentional, at least a form of discrimination.”

Sylvie Gallier Howard, an official with the Philadelphia Commerce Department, hopes the ban proves to be temporary. “Modernization is going to happen with or without Philadelphia, and we want to be part of it,” she said.

Data from the Federal Reserve Bank of San Francisco indicates that the average consumer uses cash for about 30% of all transactions, down from 33% in 2015, although low-income households rely on cash for nearly half of their payments. In general, most people still prefer using cash when making small purchases.

Recently, the Mercedes-Benz Stadium in Atlanta became the first NFL stadium to go cashless, a system that management predicts will speed up transactions and reduce lines. For fans who prefer to use cash or don’t have a credit or debit card, 10 kiosks around the arena will convert cash to a prepaid debit card with no transaction fee.