A new bill in the Senate that would have most retail businesses in the state accept cash payments was moved to the Business, Professions, and Economic Development committee on Wednesday.
A ban on cashless businesses in California
Senate Bill 926, authored by Senator Jerry Hill (D-San Mateo), would allow exceptions for internet-only businesses or places where a more verifiable form of payment is needed, such as car rental or other travel options. Even with those exceptions, many would still have to honor a cashier’s check or another form of a certified check. Businesses could also have some restrictions on cash itself, such as accepting no bills larger than a $20 or having debit card holders use an ATM for cash rather than accept the card. Fines of $25 to $500 would be given for each unlawful refusal of cash.
Senator Hill wrote the bill in response to many low-income people being unable to pay for many goods because of more stores switching to a cashless model. While cash is slowly falling out of favor, 25% to 30% of Californians still use cash to pay for the majority of their purchases according to the Federal Reserve Bank of San Francisco. Cash also tends to be more popular for those under the age of 25, over the age of 65, and for those who have low-incomes.
“Requiring acceptance of cash payments not only remedies the predicament posed by emergencies, such as a power outage that takes down registers at stores,” said Senator Hill in a press release. “It addresses far more serious, and I would like to believe unintended, consequences. The result of retail stores and businesses that operate exclusively with cashless transactions is economic, racial and age discrimination. Low-income, unbanked individuals are barred from buying food, other goods and services from such places if they only have cash for payments.”
Following San Francisco’s law
SB 926 would follow the lead of San Francisco, which banned cashless businesses last year for similar reasons.
“A lot of poorer families in San Francisco were being squeezed,” said San Francisco family housing advocate Jane Williams. “We talked with people who only had cash on hand with no banking and no credit cards struggle to find places to buy basic goods. Besides their CalFresh EBT card, they didn’t have the means to shop at many stores. A lot of clothes stores didn’t accept it, and buying airline tickets was a nightmare. I had to personally help book some emergency flights.”
“In other places in California, particularly more wealthy areas, this is a big problem. If cash is your only option, you’re locked out of a lot of things.”
Possible issues ahead for SB 926
While no formal opposition has been mounted to the bill yet, many banks, credit card companies, and some consumer groups will most likely oppose the bill.
“A lot of countries are going cashless,” explained Joaquin Cordova, who owns a store that only accepts cashless options in Los Angeles. “Here, cash can have issues. It can be counterfeit. It can be easily stolen from registers. It leads to longer checkouts.”
“I had been robbed here twice in 2017 when I still accepted cash. I went cashless the next year, and I have had no robberies or a drop in business.”
“Cashless works for a lot of stores. If you force everyone to do it, then a lot of places are screwed, especially when it comes to robberies. And that’s not even getting into the logistics of some companies taking checks for something bought online. I know there’s an exception, but for businesses that have a brick and mortar and online presence, like mine, then it’s going to be confusing.”
“The bill is well-intentioned [sic] on helping poorer people, but it leaves a lot of issues unaddressed.”
SB 926 is due to be discussed in the Business, Professions, and Economic Development committee as early as March.