Lawmakers Still Eyeing Cashless Stores

But some retailers want to ditch cash for technology.

November 26, 2019

NEW YORK—When Amazon brought its Go store to New York City earlier this year, the city was in an uproar over cashless businesses, so Amazon agreed to let customers pay with dollar bills and coins. Now Amazon wants to expand cashierless technology, putting it in full-size supermarkets and licensing it to other retailers, according to Digital Trends.

Originally, Amazon Go stores were meant to be totally cashierless. Customers scan an app to enter and pick up their items while being continually tracked by cameras. The store receipt shows up on the app, and the shopper’s credit card is charged accordingly. Proponents of the system say it is far more efficient and reduces theft. But 25% of U.S. households are unbanked or underbanked, according to a 2017 FDIC survey, and critics charge that the system discriminates against them and people who don’t have credit cards.

In October, Philadelphia’s ban on cashless stores went into effect. Massachusetts hasn’t allowed cashless stores since 1978, and New Jersey passed a similar ban earlier this year. New York City, San Francisco and Chicago have all considered similar actions. 

“We never said you have to give cash to a human being,” said William Greenlee, the Philadelphia councilman who proposed the city’s cashless ban. He said that lots of businesses, like his pharmacy, use machines that accept either cash or credit cards. “We were thinking about the convenience of the customer, because there are certain people that just don’t have a credit card,” he said.

Amazon’s cashierless stores earned the company the charge of “elitism.” They also were criticized for not accepting SNAP benefits. To be an Amazon Go shopper, customers originally had to have both a credit card and an Amazon account, plus a smartphone with the app. The gates that let customers in and out of the store open when customers scan a QR code on the device. In the New York Go store, an employee is on hand to let in a customer with no smartphone, and then someone will use a handheld scanner to tally the purchase.

Phil Lempert, editor of SupermarketGuru, agrees that traditional checkouts are too slow, and more work is needed to make the process seamless. However, he suspects that many older customers will feel uncomfortable with a high-tech experience. “When you get into the mass market, it’s scary to a lot of consumers,” he said, “especially Boomers and older, which still represent a lot of the population.”

Amazon, owner of Whole Foods, plans to open a lower-priced grocery store chain with more mainstream items. The first store in Los Angeles won’t be cashierless, but that doesn’t mean it won’t provide insight into customers and shopping habits. “When Amazon bought Whole Foods, it was a wakeup call to the entire industry,” Lempert said. “The industry started putting more money in data collection, more money in technology.”

Amazon isn’t alone in trying to get more customers to go cashless. Zippin, Trigo Vision and similar companies are working on cashierless technology. But if cities and states keep pushing back with laws requiring stores to take cash, customers will still have the option of paying their preferred way.