Cashless Stores Are Going To Unbanked Communities

Close up photo of a wallet peeking out of a man's back pocket. He's dressed business casual.

There is an hour and thirty minutes of free time between the moment I walk out of my First Amendment class and accounting. The time is usually spent catching up on homework or finding food at nearby restaurants. One of the many eateries in Astor Place is SweetGreen, a Washington, D.C.-based fast-casual spot for salads.

In recent weeks, I noticed that SweetGreen no longer accepts cash — visitors must order their food online or pay with a debit or credit card. The move has been brewing for some years now. In a 2016 post from the company, it announced it would move toward cashless stores.

“We believe going cashless is a win-win-win,” SweetGreen said in its post. “Today, over 30 percent of our transactions happen digitally, and trends suggest that number will climb. Plus, going cashless creates a safer environment for our employees — with no cash on-hand, they’re less of a target for theft.”

It seems efficient enough; however, as other restaurants and stores around the country become cashless, they are excluding unbanked populations.

Cities like Philadelphia and San Francisco have pushed for legislation banning cashless stores. Last month, San Francisco introduced a bill requiring all brick-and-mortar stores to take cash, which would ultimately impact Amazon Go Stores and other businesses looking to cut costs by going cashless. The ordinance would allow businesses to reject cash if they expect bills to be counterfeit.

The bill cited the number of African-Americans and Latinos that are unbanked in the United States. According to a report by the Federal Deposit Insurance Corporation (FDIC), 17 percent of all African-American household and 14 percent of Latino household are without bank accounts.

“In this reality, not accepting cash payment is tantamount to systematically excluding segments of the population that are largely low-income people of color,” Public Safety and Neighborhood Services Committee of the San Francisco City Council said in its bill. “The City must remain vigilant in ensuring its economy is inclusionary and accessible to everyone.”

The bill points out that cashless businesses could also have negative impacts on young people who can not get credit cards, the elderly who have not transitioned to debit and credit modes and homeless and immigrant populations.

Philadelphia earlier this month passed a bill banning cashless stores. Chicago and Washington, D.C. have also introduced their own versions of the bill. New York City officials have already started moves to ban the stores as well, along with New Jersey.

Admittedly, I rarely have cash in my wallet, but I understand the importance of requiring companies to accept it. Businesses like SweetGreen are setting a dangerous trend that could have negative consequences for low-income, unbanked communities.