New York on track to ban cashless stores and restaurants
cnn.com
cnn.com
Q. Is it legal for a business in the United States to refuse cash as a form of payment?
A. Section 31 U.S.C. 5103, entitled "Legal tender," 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 is 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 payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law which says otherwise.
Link: https://www.federalreserve.gov/faqs/currency_12772.htm
Banning specific reasons for not making business is possible however (it is done to protect ethnic minorities for example), so the situation can probably easily be changed by legislation that bans "wants to pay in cash" as a legit reason for not entering into a transaction at stores that are open to the general public.
If you pay after receiving a service, then you could loosely be considered in debt. Usually, that doesn't hold enough water from what I read and it really means, until you go to court and have an established debt, you're forced to pay through whatever mechanisms were agreed to in the transaction. Only then does it have to be payable by cash.
It's interesting to me because the transactions you're most likely to have cash on hand and pay for are items most would never have to go in debt for (a coffee, lunch, etc.) whereas large transactions you may need to go in debt for ideally use some other non-cash medium (loan, cashiers check, etc.).
Basically makes cash useless (why I rarely carry more than say $50 anymore).
More interestingly, you'll see businesses adapt quickly to accept cash when their electronic payment/management system goes down for a day. They're incredibly resourceful when it's convenient for themselves. I've had this happen at a coffee shop that was cashless that suddenly decided they'd accept cash when the other option was to not make money.
This would be a huge issue to me. I will admit that I don't live in NYC, but if I was to travel there on business and a random restaurant made me trade in $20 for a gift card to pay for a $8 meal in a place that I will probably never go back to, that's $12 out of my pocket that I paid in "cash is inconvenient" tax to that restaurant.
Even worse, if I go to a store all the time (e.g. it's the only grocery store within walking distance and I don't have a car) but I'm underbanked, then I have to continually keep money in their "bank".
> "Your total comes out to $20 but you only have $8 in store-bucks! Don't have exactly $12 in cash? That's a shame. I guess you'll have to come back to spend the rest!"
Later you find out that the gift cards expire. Oops.
The card itself costs just $1, but there is a $6.95 per month fee. So it costs me $7.95, minimum, to use one of these (13%).
There are also fees for reloading the cards without EFT. If you keep the card all year it costs $83.40.
We should focus on finding a way to provide vulnerable groups a way to pay at cashless stores rather than increasing the overhead of operating a business (accepting cash, maintaining change, coordinating bank deposits, etc.). Many of these places are coffee shops where their entire ledger is automated.
How can we complain that small businesses are closing in NYC and then continue to add regulations which may make it harder for them to operate? That seems like an oxymoron.
Cash is the easiest way to help vulnerable groups. If a homeless person wants to buy a cheeseburger, its better to accept the cash rather than have him fill out FORM NY-892-F INDIVIDUAL RETAIL ESTABLISHMENT CREDIT ACCOUNT CREATION FORM, proposing to send a monthly bill to his non-existent address, or non-existent email.
The vast majority are never exposed to these institutional barriers because they are financially above those barriers but for working poor, poverty stricken, etc. these are daily challenges to deal with with little or no recourse of action.
Take paying utilities as an example. For most it's as trivial as logging on your phone one time and setting up the account with auto recurring payments on a credit card--then setup auto payment of your credit card from a checking account where you have some portion of income automatically transferred to.
For others, they have to carefully pick and choose when and what to pay and make sure they can pay cash, check, etc. There's all the additional overhead too: traveling to a valid payment location or the post office for stamps to mail things in, cognative load/stress for keeping track of the schedule or putting it down on a calendar, etc. That's just paying utilities. Plenty of other processes have all sorts of other headaches.
In most locations in modern society, owning and maintaining a vehicle is a necessity when factoring all alternatives (aside from moving), yet vehicle ownership considered a privilege.
This list goes on and on. It's no wonder many Americans are not happy.
If we made access to prepaid debit cards dead simple (i.e. going to a bank and getting a debit card for the equivalent amount of cash) easy for small amounts, then they would not only get access to the cashless shops in town but they'd also be better served online and could access cheaper goods through online retailers.
This gives the individual an easy way to get around it without penalizing small businesses. Larger businesses likely all take in cash without issue.
Nope. Businesses can and do already reload value cards (including prepaid debit cards) which allow (among other things) buying online without a bank account, and it hasn't solved the problem.
I've had small business owners tell me that literally no small business could survive if it had to pay all the taxes they technically owed. There are some near me which offer significant discounts for paying cash.
I don't think it's coincidence that all the cashless businesses I've seen are for higher-end (and presumably higher-margin) products. Customers buying a $15 sandwich don't care about cash transactions because the difference between $15 and $17 is meaningless to them. They never pay cash anyway.
Electronic payments are a privacy concern for me. It's a big data collection source and it fuels companies like Axciom who built extremely detailed consumer dossiers on everyone.
Health insurance premiums tied to purchases? A teenager buying condoms who doesn't want their parents to know? Denied employment because you've purchased nicotine?
Not far fetched.
They're legal tender for debts. If they don't want to sell you something because you can't agree mutually acceptable payment terms then there is no debt.
Does this bill mean car dealerships (more popular in the outer boroughs than most people think) and jewelry shops will no longer be able to refuse briefcases full of cash as payment?
Then you still have the people who are underbanked for some reason but don't qualify as underbanked under that criteria. The only reliable way to do it would be to provide it to everyone, no questions asked (you can't even require proof of identity or residence, otherwise you'd still have the homeless people who lost their documents and can't get new ones). In the end, that reloadable prepaid card becomes a more complicated, less reliable form of physical cash.
I would love a reloadable prepaid anonymous card i could use instead of my own in my everyday life. I would probably use only that if i could find one. There is no such option afaik where i live though. And we are transitioning very fast to cashless. ( Norway )
Does anyone have more info on what is meant by "alternative financial services"? I'm guessing they're not referring to bitcoin...
I'm not even close to "a vulnerable group", but I still use cash for convenience. It's faster than card, most places don't have phone-based payments (I don't use them anyway, never felt worthwhile), and I don't clutter up my bank statements with daily purchases (lunch, groceries, etc).
But at the same time it's also probably safer and less management with accounting done automatically.
The main problem with this is that many countries, even within the EU, don't really issue Maestro and V-pay cards, but rather proper MasterCard and Visa (debit) cards. In my experience it wasn't an issue in Amsterdam. In Brussels on the other hand, I came across a couple places where I could only use my Maestro card.
That said, the unbanked/underbanked population is probably a lot smaller than in the US.
source: I live in Amsterdam and have a Pin card, a US debit Mastercard, a US Credit Mastercard, a dutch debut maestro and a dutch credit mastercard. Only the pin works on those PIN systems
I'd love to see big-picture legislation (like GDPR is for privacy) which could take a bite out of all the tiny cuts of financial mini-hardship that poor people face every day. I just have no idea what it'd look like. Maybe there's nothing better we can do than 100 little laws like this one.
I encourage everyone to try living one day like they're down to their last $20 and have to buy some things they need (pretend you don't have a wallet full of plastic cards and a phone full of passwords). Nearly every time you go to buy something, you'll encounter a situation where you could save money in the long run if only you had a little more to spend today.
If suddenly 95% of cash acceptance was dropped, a lot of that infrastructure will vanish, forcing the remaining 5% to drop cash acceptance as well...a death spiral, ultimately ending with the elimination of cash and thus also the elimination of the very fallback that these stores mentioned by the OP relied upon.
Consider the cost of accepting cash an insurance premium against technical failures in the electronic payment networks and your POS systems.
In that time people had no access to their money, no tap and pay, chip and pin etc, nothing.
That was quite a lesson in importance of cash, another lesson was about a dozen years ago when all the banks here went to the wall and had to be nationalised in order prevent bank runs.
PS OP, in the 1700s you'd probably issue a writ of payment and the shopkeeper would add the purchase to your tab, which you'd pay off in full at a later date.
Unless you were a total stranger to that establishment, then you'd probably be paying at the time of purchase.
Let's get our jokes historical accurate.
All seriousness aside, if a business wants to be cashless, that’s a business decision, not religion. If the system goes down, they can dogmatically refuse to function, or they can place a large can on the counter and get on with it.
Pubs were local guides to credit worthiness, larger shops cashed cheques so businesses could pay staff (an era when many were still paid in cash), so cash could go round the system again, and cheques were countersigned and passed on dozens and dozens of times -- effectively becoming variable size bank notes.
It's a fascinating story, and quite remarkable how little effect no banking had.
Doesn't sound like there was "no harm to the economy" though, except in the broader sense. A quote from an Irish building contractor cited in the article: "I employ only 10 people. If it hadn’t been for the bank strike I’d be hiring 30. I’d say I’ve lost up to £20,000 over it ... One of my problems is finding the money to pay the wages. I run round from Wednesday to Friday to scrape them up, and in that time I can do no other work."
The article also notes the steady stream of people going down to the local department store and other larger shops once a week, to cash their wages, or a wages cheque to pay their factory workers. Pubs were accumulating cashed cheques from regulars and some making smaller loans.
The real surprise for me is how smoothly they coped, and how little fall out there seemed to be when banks reopened. Though of course there were some of the millions of cheques doing the rounds that did bounce. I've seen far less about knock on effects after reopening like that, but it's usually described in a way that makes it seem "far less than you would expect".
By the way this highlights the need for something like Bitcoin.
NYC is home to an industry that stands to benefit from a cashless economy and home to a government that never seems to turn down an increase in their ability to put people under a metaphorical microscope. I would have predicted they would be one of the first places to ban cash and one of the last to mandate businesses accept cash.
I'm really happy to see consumer protection winning out over private interest for money and state interest for power but damn is that a curve ball in this day and age.