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D.C. Wants to Ban No-Cash Businesses and Cash Discounts

A new bill would make it illegal for city businesses to refuse cash payments.

Vkv/Dreamstime.comVkv/Dreamstime.comAs more restaurants, bars, and fast-casual eateries switch to digital-only payment methods, the D.C. City Council is considering a bill that would make it illegal to not take cash.

"By denying the ability to use cash as a payment, businesses are effectively telling lower-income and younger patrons that they are not welcome," Councilmember David Grosso explained in a statement introducing his Cashless Retailers Prohibition Act.

Grosso's bill, which has already attracted the support of five of D.C.'s 13 city councilmembers, would make it an "unfair trade practice" to refuse cash. Current D.C. code makes violating fair trade practices a Class 2 infraction, with fines ranging from $1,000 to $8,000 depending on the number of offences.

If a business is fined for refusing to accept cash, it won't be able to pay the fine in cash. It won't even be able to use a credit card. The District's Office of Administrative Hearings—which handles most fines issued by city departments—requires that violators pay via check or money order. Fortunately, D.C. still lets you settle parking and traffic tickets with greenbacks, no doubt so as not to exclude the poor and unbanked.

Washington is not the first city to consider a crackdown on cashlessness. Chicago Alderman Edward Burke introduced a bill in 2017 that would have forced businesses to accept cash, claiming—like Grosso—that refusing cash is anti-poor and displays "an elitist attitude that doesn't really reflect what Chicago is about."

The assumption here seems to be that restaurants are eager to turn away otherwise paying customers out of some deep animus toward the poor. A better explanation is that businesses that have gone card-only don't see many cash transactions to begin with.

In a Monday article, the Washington Post named a number of businesses that have gone cashless in the District, including the salad chain Sweetgreens, the "posh" Barcelona Wine Bar on 14th street, and the frozen yogurt shop Menchies.

I can't imagine many unbanked patrons will feel excluded from the Barcelona Wine Bar because they can't pay cash for their $14.50-a-person squid ink fideos dish.

And there are good reasons for businesses to ditch cash, says John Gordon of Pacific Management Consulting Group, a restaurant consulting firm. Paper money comes with a lot of unseen costs.

"Cash has to be handled. It has to be stored in a [point of sale] system. It has to be counted at least every shift. At the end of the day it has to counted and tallied into a sales report," Gordon told Reason last October, when Chicago was considering its no-cash ban. Gordon noted that businesses also had to spring for the costs of armored trucks to pick up all that cash, and that they run the risks of cash payments being miscounted or stolen.

Grosso has dismissed these safety concerns, saying businesses should just buy lockboxes or put up signs saying that, while they do accept cash, they don't have that much cash on hand.

Grosso's bill would also make it illegal to "charge different prices to customers depending on their payment method." In other words, it would ban businesses from giving cash discounts. The legislation thus achieves the remarkable feat of screwing over both businesses that refuse cash payments and those that actively encourage them.

The Post's story suggests that attempts to ban no-cash businesses have more to do fights between the ATM lobby (eager to preserve cash payments) and credit card companies like Visa (who have aggressively encouraged businesses to adopt cashless payment methods) than any genuine concern for poor diners.

But whether or not there's an ulterior motive to Grosso's bill, his rules would substitute the judgement of a few city councilmembers for that of businesses who are far more in tune with their customers' payment preferences. These businesses, not the government, should be the ones making minute decisions about their work.

Photo Credit: Vkv/Dreamstime.com

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  • Just Say'n||

    "including the salad chain Sweetgreens, the "posh" Barcelona Wine Bar on 14th street, and the frozen yogurt shop Menchies."

    DC is a parody of itself

  • Shirley Knott||

    Legal tender. "All debts, public and private."

  • EscherEnigma||

    Does not mean what you think it means. If you own be five bucks, you cannot sue me if it refuse to take a grubby blood-smeared fiver from you.

    For that matter, ever notice all the fast food places that have signs about how they will not accept bills above a certain size? It gotten a bill that says "do not mail cash, checks or money orders only"?

  • 100% Satisfaction Guaranteed||

    "you cannot sue me if it refuse to take a grubby blood-smeared fiver from you. "

    Well of course I can't sue you to require you to accept payment, what a silly observation.

    The real point is that YOU can't sue ME for my debt if you refuse to accept legal tender.

  • 100% Satisfaction Guaranteed||

    The more I read your post, the more I have to conclude that it doesn't mean what YOU think it means, and what you think it means is very very strange.

  • EscherEnigma||

    Funny story! If you look into this one, you'd see that a business that violated the proposed ordinance would not be able to pay the fine in cash.

    You really think that if you refuse to pay that fine on the basis that they won't accept cash that you're getting away free?

  • 100% Satisfaction Guaranteed||

    I do. The same thing has been done many many times, if you had bothered to look into it.

    The business would absolutely be abe to pay in cash, and when the cash isn't accepted, the onus falls on the municipality to explain and justify why.

  • jcw||

    Couldn't the restaurant argue that no debt is accrued if they refuse to make food for a person that only has cash?

  • Happy Chandler||

    The libertarians want to use government power to force merchants to trade their services for the payment form specified by the government.

    Just bake the cake has been replaced by "Just make the quinoa acai bowl."

  • Minty McGinty||

    Name one libertarian who has said they want that.

  • Rat on a train||

    It is a debt if they bill you after eating. Telling diners you don't accept cash before serving does not change that. You have to collect payment before service.

  • Kevin Tyssen||

    That is exactly the argument, and that is why businesses can refuse cash, or only take certain denominations of bills (like no bills larger than $20)

  • 100% Satisfaction Guaranteed||

    Snopes has covered this.

    The governing regulation is now 31 U.S. Code § 5103, which states:

    United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues.

    ...

    In a statement issued in response to the resulting "public uproar" over the matter, Jeffrey Stonehill, borough manager, acknowledged that borough personnel relied on an outdated policy when they refused 2,500 pennies as payment from Shippensburg handyman Justin Greene, who was angry about a $25 fine he received.

  • 100% Satisfaction Guaranteed||

    That was not a response to you jcw, it was the citation for my previous post.

  • Brandybuck||

    I thought the big proggie thing was forcing a cashless society on everyone, just to maximize the taxing opportunities. To easy to hide your income if you do business under the table for cash.

  • jcw||

    I hide all my income in paypal.

  • albo||

    I use mine to buy diamonds that I have Tiffany Case and Shady Tree bring to Elon Musk for his laser satellite project.

  • Bearded Spock||

    One of the best Bond flicks, IMHO.

  • Ron||

    well politicians of all strips hide cash given by lobbyist so I could see how they would be for this

  • ||

    It's always so obvious that these political nitwits have never come remotely close to running, or even being involved in the running of, a business.

  • ||

    Or they have. It should be noted that when we/they say;

    "Cash has to be handled. It has to be stored in a [point of sale] system. It has to be counted at least every shift. At the end of the day it has to counted and tallied into a sales report," Gordon told Reason last October, when Chicago was considering its no-cash ban. Gordon noted that businesses also had to spring for the costs of armored trucks to pick up all that cash, and that they run the risks of cash payments being miscounted or stolen."

    Almost none of that disappears with pretty much any form of digital currency. Ledgers still have to be kept and, varyingly, the cost of any losses or malfeasance is (un)duly placed on the banking system itself by default (barring legislation/regulation). The adoption of EMV in the US was accompanied by an explicit shift in liabilities towards the merchant along with an increase in the amount of information provided by the merchant to the bank/card issuer.

  • Happy Chandler||

    Much of the cost and risk involved with cash is reduced with using credit. A server can't put a twenty in their pocket and not ring up an order. A half decent POS system will automatically keep your ledger. A robbery would be unsuccessful if all that's in the register is credit card receipts. You don't need bank runs or armored car services.

    The merchant only takes the fraud risk if they don't have a chip reader.

  • Agammamon||

    With credit/debit transactions those ledgers are filled out automatically at each transaction. Your cashier also can't slip money out of the register.

    They can, however, still do the old 'let your buddy give you half the price in cash and then not ring up the sale' trick.

  • Hackmaschine Mutter||

    Prog-man Grosso doesn't want any businesses to TRIGGER customers that have greenbacks.

  • albo||

    Philadelphia forced convenience stores (mostly Asian) to take down their bullet-proof glass because it insults the pride of their customers (mostly brown).

    It's easier for city council to do that than to admit that the violent culture in that part of the city forced stores to install those safety barriers in the first place.

  • Happy Chandler||

    The Philadelphia bill only covers sit down restaurants with 30 or more seats. Nothing about convenience stores.

    Nobody ever claimed it was due to racism.

    Other than that....you were spot on!

  • albo||

    effectively telling lower-income and younger patrons

    It seems young people are more into using debit, not cash.

    And I don't know why the government has to make laws affecting private transactions just because some people are too financially screwed up to get a debit card.

  • Mr. Dyslexic||

    "Fortunately, D.C. still lets you settle parking and traffic tickets with greenbacks, no doubt so as not to exclude the poor and unbanked."

    Well of course they do!

  • Mr. Dyslexic||

  • albo||

    I hear that Taco Bell doesn't accept $2 bills.

  • Mr. Dyslexic||

    Well that's as queer as a $3 bill isn't it?

  • Rhywun||

    "an elitist attitude that doesn't really reflect what Chicago is about."

    LOL New York pulls that card all the time too. I suspect that when Chicago is doing it, it's being just as disingenuous.

  • I'm Not Sure||

    According to the US Department of the Treasury :

    Legal Tender Status

    I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?
    The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

    This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

  • Bubba Jones||

    So... how do government agencies justify refusing cash for fines?

  • Agammamon||

    From what I've seen they don't - technically.

    They just require you to convert that cash into a money order or cashier's check first.

  • Rock Lobster||

    Not surprising. The progs have no doubt discovered that unaccountable brown bag donations to Democrats can only be made in cash. Their desire for control of everyone else ("cashless" society) must be compromised to accommodate their own greed.

  • Bearded Spock||

    All arguments aside on the merits of this proposal (spoiler: it's typical DC overreach) I'm surprised to see Reason to be so down on cash.

    Cash transactions are truly anonymous, unlike digital transactions which regardless of hhe level of security can be easily traced if the .gov really has a mind to do it.

    I make a point of using cash as much as possible, especially for firearms-related purchases. Because your digital transactions tell pretty much the story of your life at that point: what you bought, how much you paid, when you bought it.

    If the gubmint is going to spy on my shopping habits, I'm not going to make it easy for them.

  • Colossal Douchebag||

    This was my thought exactly. Good God.

    I get basic libertarian angle of lesser regulation being better, but if there ever was a cause Reason should be defending from the rooftops, it's universal acceptance of an anonymous means of commercial transaction.

    Yes, the feds print the stuff, but every single bank account in the country is marked to it anyway, so who prints it stopped being the issue a long time ago. In paper form it's the ONLY broadly accepted payment left that doesn't leave a trail.

    Advocating that it remain legal tender for all debts public and private is a total no-brainer.

  • Agammamon||

    . . . businesses are effectively telling lower-income and younger patrons that they are not welcome,

    Seriously? The only people who don't have a debit card are the 'unbanked'. Under 8% of the population according to the Wiki. While I think businesses *should* still take cash, its not a major thing if they don't. If nothing else, that 8% *can* get and use what are basically a form of universal gift card.

    And its not a 'cash discount'. Its a 'convenience fee' attached to credit/debit transactions and isn't applied to cash transactions because the bank isn't skimming off 1.75-2.5% of each transaction when you pay in cash.

  • LamarPye||

    Easy, scrap this bill. An establishment should decide what types of payment it receives and give cash discounts or credit discounts for that matter

  • Stilgar||

    So much for anonymous dining Reason. Thanks.

  • Ryan the Sea Lion||

    You no want my cash, I smash your store. I hack your server. I take your cooks and dishwashers for to work at my Ukrainian bistro.

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