Why and How Should Retailers Protect Consumers’ Right to Cash
Some retailers are buying into the hype about going cashless. And companies like Amazon are seeming to lead the charge. With over 12 Amazon Go stores in popular locations such as Chicago and New York, only a select few can accept physical US currency as a form of payment.
But Amazon is not the only retailer that has experimented with cashless operations. Restaurant chains, coffee shops and other establishments are turning away customers that attempt to pay with cash. And, while there are plenty of complaints on social media, it is not currently a federal law that retailers must accept cash.
Why Does Cash Matter for Retailers?
Merchants that are moving to cashless operations often reference the costs of cash-handling, the potential risks to employees handling large quantities of cash, and the increased speed of customer service when consumers use debit or credit cards. The assumption is that digital payments are less risky, save money and make customers happy. But are these retailers considering all of the angles?
- Americans Want Cash to Stay an Option. Sixty-six percent of US citizens see cash as a secure and private payment option. Over a quarter (31%) prefer to pay cash for personal services or food (28%).
- Some Consumers Don’t have Access to Digital Payments. Over 8.4 million Americans are unable to pay in form other than in cash due to a lack of access to bank accounts, debit cards or credit cards.
- Generation Z Prefers Cash. Despite their heavy smartphone use and occasionally mind-boggling TikTok challenges, the up-and-coming generation’s top payment choice is cash.
- Digital Payments Don’t Work in a Crisis. Let’s say your business DOES go cashless. What happens when a natural disaster or even a brown out hits and the electricity goes out? In nearly every crisis situation over the past 10 years, residents have had to rely on cash to pay for goods and services until electricity and internet are restored.
- Digital Payments Often End Up Being More Expensive. Maybe it can be a bit of a pain to count change or balance cash drawers. But at least a cash payment means the business keeps their entire profit from each sale. Payments by card, on the other hand, eat into revenue of every single transaction. And that three to five percent add up fast.
How to Protect Consumer Payment Choice?
The good news is there are many states working to pass legislation to protect consumer payment choice. It is illegal for establishments to not accept cash as a form of payment in Colorado, Massachusetts, Rhode Island, New Jersey and more. Even major cities such as Philadelphia, Miami and San Francisco have passed cashless bans.
The “Payment Choice Act of 2022,” (S.4497), which is designed to ensure every American has the right to pay with cash for in-person sales, was recently passed by the US House of Representatives and is on it’s way to the Senate as part of the National Defense Act.
Retailers can help protect their own businesses as well as their customer’s right to payment choice in a variety of ways, including:
- Contacting your member of Congress and asking them to support of the Payment Choice Act.
- Continuing to offer cash transactions at the point-of-sale in order to provide customers with a wide variety of payment options to meet their individual needs.
- Providing additional cash access (and potential added business revenue) with an on-site ATM.
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