Amazon's Cashless Policy: Legal Or Unfair?

Amazon's policy of not accepting cash has sparked debate and raised the question of whether such a policy is legal. While some argue that refusing cash is discriminatory towards those without access to digital payment methods, others maintain that businesses should have the freedom to choose how they accept payment. Amazon's cashless model has faced criticism, particularly as it fails to serve a significant portion of US households that are unbanked. In response to this criticism, Amazon has announced plans to accept cash at its Go stores, although a timeline for this change has not been provided.

The legality of refusing cash payments varies depending on the location. While there is no federal statute mandating that businesses accept cash, certain states and cities have enacted laws requiring retailers to accept cash to prevent discrimination against unbanked customers. These include New York, Philadelphia, San Francisco, New Jersey, and Massachusetts. However, other states, such as Idaho, Mississippi, and North Dakota, have proposed similar bills that were ultimately rejected.

Amazon is not breaking the law by not accepting cash, as there is no federal statute mandating that a private business must accept cash

Amazon is not breaking the law by not accepting cash as there is no federal statute mandating that a private business must accept cash. However, this does not mean that Amazon is immune from criticism for its cashless model.

The company has faced accusations of discrimination against the unbanked, and a growing number of cities and states are enacting laws that require stores to accept cash. For example, Philadelphia became the first major U.S. city to ban cashless stores in 2019, and New Jersey followed suit shortly after. Other cities like New York, San Francisco, and Chicago are considering similar laws.

Supporters of cash transaction legislation argue that it is necessary to prevent retailers from unintentionally discriminating against unbanked people, who are disproportionately low-income, Black, Hispanic, and Native American. According to the Federal Deposit Insurance Corporation's latest survey in 2019, about 7.1 million U.S. households do not have a bank account.

While Amazon initially resisted these efforts, it eventually announced that its Go stores would start accepting cash. The company's senior vice president of physical stores, Steve Kessel, said that Amazon plans to add additional payment mechanisms to its Go stores to address concerns about discrimination and elitism.

However, some states and cities have passed laws that require businesses to accept cash, to prevent discrimination against unbanked customers

While there is no federal law requiring businesses to accept cash payments, some states and cities have passed laws mandating that retailers must accept cash to prevent discrimination against unbanked customers. This is because millions of Americans do not have bank accounts, credit cards, or photo identification, and refusing cash payments could exclude them from participating in the economy.

In recent years, left-leaning leaders in cities such as New York, Philadelphia, and San Francisco, as well as the state of New Jersey, have enacted laws requiring businesses to accept cash. Massachusetts has had a similar law in place since 1978. These laws aim to protect unbanked customers who rely on cash and to prevent discrimination against low-income, Black, and Hispanic individuals, who are disproportionately affected by a lack of access to banking services.

The movement to require businesses to accept cash gained traction during the COVID-19 pandemic, as public health measures and coin shortages made it more difficult for some consumers to make cash purchases. Republican lawmakers in several states also proposed bills to require businesses to accept cash, although these proposals were not successful.

Some businesses have argued that they should be free to choose how to serve their customers and that accepting cash can increase costs and security risks. However, proponents of cash transaction legislation argue that it is important to reaffirm the use of coins and paper money and to ensure equal access to the economy for all.

There are no federal laws, but there are state and local laws that require businesses to accept cash

There is no federal law that requires businesses to accept cash as a form of payment. However, there are state and local laws that mandate businesses to accept cash. For example, Massachusetts has prohibited cashless merchants for 41 years, and New York City and Washington, D.C., have introduced their own versions of such laws. In 2021, Colorado and Washington, D.C., passed bills that would require retailers to accept cash, with a few exceptions.

The movement to require businesses to accept cash is driven by the desire to support equal opportunity for all residents, especially those who are unbanked or underbanked. According to the Federal Deposit Insurance Corporation's (FDIC) latest survey in 2019, about 7.1 million U.S. households do not have a bank account. Rates of unbanked households are highest among low-income, Black, Hispanic, and Native American households, as well as households headed by a person with disabilities.

Some businesses have chosen to go cashless to speed up transactions, reduce the risk of theft, and accommodate the increased use of credit and debit cards, as well as digital wallets. However, by refusing to accept cash, businesses may be inadvertently discriminating against unbanked individuals and communities of color, who are disproportionately affected by a lack of access to traditional banking services.

While there is no federal mandate, state and local laws vary, and it is essential to be aware of the specific regulations in your area regarding cash payments.

Amazon Go stores will start accepting cash to address 'discrimination' concerns and cater to the unbanked

Amazon Go stores will start accepting cash to address concerns of discrimination against the unbanked, a group that is disproportionately low-income, Black, and Hispanic.

Amazon's senior vice president of physical stores, Steve Kessel, confirmed the company's plan to add additional payment mechanisms to its Go stores. This move comes as a growing number of cities and states are enacting laws that require stores to accept cash. Philadelphia, New Jersey, New York, San Francisco, and Chicago are some of the places considering or enforcing such laws.

The Amazon Go model, which has no cashiers or checkout lines, has been criticized for discriminating against a sizable portion of U.S. households who do not have bank accounts. These cashierless stores charge purchases using an app connected to a bank or credit card. By accepting cash, Amazon Go can better serve the unbanked population and expand its customer base.

While some argue that businesses should be free to choose how to serve their customers, others believe that requiring businesses to accept cash is a way to prevent retailers from unintentionally discriminating against unbanked people.

Businesses that refuse cash payments may be unintentionally creating additional bias in the system and excluding economically vulnerable populations

While Amazon does not accept cash payments, it is not breaking the law. There is no federal statute mandating that a private business must accept cash as payment. However, some states and cities have passed laws that require retailers to accept cash, with the aim of protecting unbanked customers who rely on cash. These include New York, Philadelphia, San Francisco, New Jersey, and Massachusetts.

The debate surrounding cashless businesses centres on issues of fairness and equal opportunity. Refusing cash payments may unintentionally exclude millions of Americans who do not have a bank account, lack credit cards, or do not have photo identification. According to the FDIC, 6.5% of U.S. households in 2017 did not have bank accounts, and 18.7% had accounts but also used financial services outside of insured institutions. Communities of colour are particularly affected by this issue, with 16.9% of African-American households and 14% of Latino households in 2017 lacking bank accounts.

Some businesses have chosen to reverse their cashless policies due to criticism. Amazon Go stores in San Francisco and New York City now take cash, and the company plans to accept hard currency at all Amazon Go stores over time. Sweetgreen, a salad restaurant chain, also resumed taking cash at all of its locations after initially announcing it would no longer accept cash.

Frequently asked questions