Los Angeles City Council Moves Forward With Proposal to Ban Cashless Businesses

The Los Angeles City Council voted 13-0 on Tuesday to move forward with a motion that would ban all cashless stores in the city, with the chief legislative analyst now being instructed to work with the city attorney on the proposed policy.

Since the 2010’s, cashless stores have been on the rise in the United States, with a large bump seen during and after the COVID-19 pandemic because of many people wanting to reduce the spread of the virus. While cashless stores brought many positives, including ease of purchase and robberies dramatically going down, some negatives were also seen. In particular, opponents said that cashless businesses were not inclusive, leaving out those who preferred to use cash, those without bank accounts, the elderly, low-income people, the homeless, and illegal immigrants.

While statistics have shown that more and more people are no longer using cash for transactions, instead using credit card, debit cards, apps, and other digital and wireless means to pay for things, concerns over the underbanked population, as well as those who rely mainly on cash for transactions, have led to more cities and states to ban cashless businesses. Since the late 2010’s, Colorado, Rhode Island, Massachusetts and New Jersey have instituted statewide bans, while Philadelphia, New York City, and Washington D.C. have passed city bans. In 2019, San Francisco became the first city in California to pass such a ban, with Berkeley joining them soon afterwards.

This year, Los Angeles became the most recent big city to mull such a ban. First introduced in August by Councilwoman Heather Hutt, the motion specifically pointed out that many are unable to get bank accounts or not being allowed to get credit access, with cash the only way they can pay for many goods and services. Specifically, Hutt stressed that “not accepting cash payments in the marketplace systematically excludes low-income communities of color, young people who do not meet the age qualifications for credit or debit cards, and seniors who have not transitioned to card or digital payment modes.” The motion also specifically pointed out a 2017 Federal Deposit Insurance Corporation (FDIC) report that found that 17% of African-American households and 14% of Latino households in the United States had no bank account.

“Others may not be able to participate in the formal banking system, or may be excluded from that system against their will,” added Hutt. “Barring the use of cash as a payment method means excluding too many people. The city must remain vigilant in ensuring that our economy is inclusionary and accessible to everyone,” the motion reads. “In order to ensure that all city residents, including those who lack access to other forms of payment, are able to participate in the city’s economic life we should adopt an ordinance that allows them to pay cash for goods and many services.”

A 13-0 Vote

With virtually all Councilmembers in favor of the motion because of every district having a sizable portion of residents who fall under those most affected by cashless businesses, the City Council voted 13-0 on Tuesday to move the bill forward. The chief legislative analyst will now officially be working on the motion with the city attorney, with a completed policy to be brought forth to the City Council in the near future for a vote.

While popular among city councilmembers, area businesses have been up in arms over the proposed policy. Specifically, many have spoken up about it over safety concerns, theft concerns, and as a way to help combat COVID and other viruses going into fall and winter as paper money and coins are a major way that many sicknesses are spread.

“It’s ridiculous,” said Jay Branchley, a co-owner of several stores in the L.A. area, to the Globe. “We went cashless during the pandemic to do our part in stopping the spread of COVID. But then we noticed an amazing thing. Crime went way down. At first we thought it was just another COVID thing, but we continued to have no robberies and little else in the way of crime happen once the pandemic went away. Before the pandemic, you know, it’s LA, it happened. Afterwards, word gets around that you don’t have registers anymore and it isn’t a problem anymore.”

“We had a former business partner who left in 2018 come in a few months ago and sit in on a meeting. He was used to hearing about all these robberies before, and expected it to be the same. But he was shocked, as the biggest thing to come up that month were complaints that non-customers were using the restroom. He said that it sounded like our stores were in suburbs rather than LA.”

“If this passes and we have to go back to cash, we’re back to robberies. Guaranteed.”

Ana del Monte knows this too well. As someone who has been a part of the restaurant industry in LA, San Francisco, Chicago, and New York, she has seen where the return to accepting cash has led to. “Do you know why my restaurant had to leave San Francisco in 2021?” del Monte asked. “It wasn’t the pandemic. It wasn’t the homelessness. It wasn’t the drugs there. It was the city forcing businesses to accept cash and be a target of robberies once again.”

“This is what they don’t talk about with this. Yes, some people are left out, but it is only some businesses. Before San Francisco’s ban, as well as New York’s, we saw robberies go down and all other crimes go down too. We actually had one robber in New York not know that we went cashless and took an employees iPhone instead as a desperate way to get something out of it. But then they put in these laws, and suddenly  we had robberies again.”

“People in LA have a reason to be very worried about this, and I’m worried about the restaurants there. Remove the ability of restaurants to go cashless, and you have a jump in crime overnight. We’ve seen it happen before. The Councilwomen and Councilmen need to ask businessowners directly on what this would do to them, and most importantly, ask their colleagues in other cities where this was reversed on what happened with the crime there.”

A vote on the motion is likely to come later this year or next year, following the policy being drawn up by the city attorney.