Cash is still king.
New York City native Brett David, 39, prefers to pay only in cash. “I never leave my house without at least $100 cash on me, and if I’m splitting a bill with one or two other people, I’ll use cash whenever possible,” David, a creative director at Rochelle’s bar in New York City, said.
But David will soon find more places willing to accept his cash.
The online retail giant announced it will accept cash at its newest cashier-free store, which opened Tuesday in New York City, after facing backlash last month from people who criticized its cashier-free stores for shutting out the 8.4 million people who don’t have bank accounts.
‘Going cashless had positive results, but it also had the unintended consequence of excluding those who prefer to pay or can only pay with cash.’
The New York Amazon Go is the company’s 12th location, and the first to accept cash; Amazon spokeswoman Kerri Catallozzi said all Amazon Go stores will eventually accept cash. Others are located in Chicago, Seattle and San Francisco.
Washington, D.C.-based salad chain Sweetgreen will also start accepting cash again at all of its 94 locations by the end of the year following backlash cashless stores have faced for excluding people without credit cards or bank accounts, the company said last week.
There is no federal law that mandates retailers accept cash, but state and city lawmakers have stepped in to prevent companies from switching to bank cards and mobile payments. The state of Massachusetts has had a law mandating stores take cash since the late 1970s.
The city of Philadelphia was the first city to follow in Massachusetts’ footsteps earlier this year. New Jersey then introduced a similar policy mandating that stores must accept the greenback. New York City Councilman Ritchie Torres is also trying to ban cashless stores.
Going cash-free was once pitched as a way to streamline operations as America slowly evolves toward mobile and plastic-only payments, which Northern European and Asian countries have embraced for years, but cashless U.S. companies ran into problems.
Consumer advocates say requiring customers to pay with plastic or a smartphone is a social-justice issue. They argue it’s left America’s “unbanked” the 8.4 million people who don’t have bank accounts, debit cards or credit cards — in the cold.
Amazon said it would soon start accepting cash at over 30 of its brick-and-mortar stores, including Amazon Go convenience stores and bookstores.
“Going cashless had positive results, but it also had the unintended consequence of excluding those who prefer to pay or can only pay with cash,” Sweetgreen wrote in a blog post announcing the switch. (Sweetgreen declined to comment beyond that statement.)
“Ultimately, we have realized that while being cashless has advantages, today it is not the right solution to fulfill our mission. To accomplish our mission, everyone in the community needs to have access to real food,” it added.
The fast-casual chain that sells salads and bowls of grains, vegetables and proteins for around $10, first went cashless in 2016 to reduce the likelihood of theft, to speed up service, and to reduce its carbon footprint. (It said skipping cash means it uses fewer armored trucks and less paper.)
When Sweetgreen opened in 2007, 40% of its transactions were cash, the company said in December 2016. But by early 2016, fewer than 10% of its transactions were cash, Sweetgreen. That’s when it started experimenting with going cashless at some stores.
Getting rid of cold hard cash helped make the stores more efficient, the company said. Workers were able to perform 5% to 15% more transactions every hour, which meant customers got out the door “several minutes faster,” Sweetgreen said when it introduced cashless stores.
On Monday, the Sweetgreen location on Wall Street was still not accepting cash. Madeline Norling-Christensen, a spokeswoman for Sweetgreen, said the company will start accepting cash again starting in Philadelphia on July 1, and at all other locations by the end of the year.
Lawmakers in Philadelphia and New Jersey have recently stepped in to prevent companies from switching to bank cards and mobile payments.
Last December, Danny Meyer, the restaurateur and CEO of Union Square Hospitality — the group behind New York City restaurants like Martina, Daily Provisions and Caffe Marchio — said more of his restaurants were going cashless.
Like Sweetgreen, he cited concerns over the safety of staff who have to deal with large quantities of cash and faster customer service. (There may be another reason: Some observers say cashless businesses also prevents the likelihood of employee theft.)
Meyer did, however, say that there can be exceptions. “Policies can be broken in the name of hospitality, and if someone wants to enjoy our food and drink, yet is only able to pay with cash, it is unlikely that we would turn them away,” Meyer wrote last June in a LinkedIn post.
Shake Shack SHAK, -3.56% another Meyer business, put its plan to go cashless on the back burner last year after realizing that many of its guests pay with cash. The burger chain tested a cashless model at its Astor Place location in New York City, but customers were not happy about it.
“Forcing customers to use only credit or debit is a discriminatory business model that disadvantages low-income people, people of color, and seniors,” said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union.
“To have credit, a person must have a bank account, and to buy things without cash, a person must have credit,” he said. “This means that people without a bank and a credit card cannot shop at these businesses, effectively excluding people from participating in the local economy.”
In the U.S., 6.5% of households don’t have a bank account, according to the Federal Deposit Insurance Corporation. More than 24 million homes are “underbanked,” meaning they used services outside of the banking system like check-cashing businesses.
Brett David, meanwhile, is happy to keep using cash. “I don’t have a credit card because I don’t have the need,” he said. “Plus, I don’t want the temptation to get into massive debt.” He racked up $2,500 in credit-card debt when he was 23. He has vowed never to find himself in that situation again.
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