I was at a health-food and coffee shop on East Houston, grabbing an $11 vegan sandwich for lunch, when I noticed the man next to me, who appeared to be homeless, trying to buy a cup of coffee. The entire exchange wasn’t going well: First, there was the absence of any traditional milk from the dairy-free café’s “vegan mylk” selection. The coffee’s price, $2.95 for a small, was also fairly steep. But just as it looked like the situation was going to resolve itself, a final, insurmountable hurdle arrived: As the would-be customer started to pay with a stack of coins and notes in his hand, an employee was forced to tell him that cash wasn’t accepted at the café. Eventually, he gave the coffee to the man, only after the three of us stared at each other uncomfortably.
Until then, I had been aware of cash-free restaurants and cafés, but had never fully grasped the effects of their growing numbers. Afterward, I realized “cashless” coffee shops, cafés, and take-out spots are everywhere. It also struck me that these businesses force people to adopt a way of shopping and living that not everyone wants, and that in doing so they create a gulf between people who can shop at these businesses and people who can’t.
The more I thought about it, the more these businesses began to infuriate me. Are these business owners trying to keep out certain customers? What about children? Or people who are paid in cash, or others who, for whatever reason, can’t or won’t open a bank account (because they are undocumented, for example, or do not have a home or a fixed address)? What about tourists who simply want to avoid bank exchange rates? What about other people who, quite reasonably, don’t love the idea of companies like Apple and Square being able to track their complete purchase histories?
And aren’t the businesses that refuse to accept cash really just sending a not-so-subtle message about the types of customers they want?
“We already have so many forms of stigma and discrimination in this country,” says Bill Maurer, a UC Irvine professor who also directs the Institute for Money, Technology and Financial Inclusion, “and now we are adding mode of payment to the list — if we start marking belonging by ‘means of payment,’ that’s a big problem.” Maurer, who coordinates research in over 40 countries about the impact of new payment technologies on people’s well-being, encourages everyone to seriously think about the long-term ramifications of a “cashless revolution” — but that doesn’t seem to bother cash-free advocates too much.
“Cash is our main competitor; I don’t envy being in cash’s position,” a Visa spokesperson told me recently. In summer of 2017, the credit-card company announced a “cashless challenge” that would award a $10,000 prize to businesses that went completely cash-free. The cashless challenge, the spokesperson explained, was designed to “make it okay to say I am cash free, and hopefully encourage others to come forward, too.”
Simone Falco, the chef and owner of New York’s fast-casual Simò Pizza, which won $10,000 in the Visa cashless challenge, says that the driving force to go cashless at his businesses was a desire to maintain a tip-free environment. And in his video entry for Visa’s challenge he focuses on business benefits like speed, efficiency, and theft reduction. The consensus among small-business owners is that eliminating cash streamlines operations, makes better use of resources (staff don’t have to waste time doing banking or washing their hands after handling paper money), speeds up wait times for customers, and eliminates the risk of theft, either by third parties or workers.
Itai Afek, the owner of the gourmet wrap company Wolfnights, says he decided to go cashfree at his Lower East Side and West Village locations after seeing sales data that 85 percent of his “very high-tech” customers pay with cards anyway. “In New York City,” he tells me, “almost everyone has a debit or a credit card.”
This is a common line of thinking among cashless owners — “In New York City everybody carries a credit card or a debit card!” Falco proclaims in his Visa video — but the belief that everyone has access to a card likely only applies to these owners’ target audience. According to the latest national survey by the FDIC, about 6.5 percent of American households (which is about 8.4 million) do not have a bank account, and an additional 18.7 percent are what’s called “underbanked,” which means they are more likely to rely on cash day-to-day. In New York state, almost 25 percent of all households — and nearly half of black and Hispanic households — are unbanked or underbanked.
“There’s a slight barrier to entry, which you can’t ignore, and we really wrestled with that,” says Theo Friedman, a co-founder of the shaved-ice company Bonsai Kakigori, which is now cash-free. Friedman concedes, “You’re making a real socioeconomic statement when you say, ‘I only accept cards.” How does the team at Bonsai reconcile this? “Welcome to the world of small business,” Friedman says. “Every day you are faced with tons of different decisions and you have to chose a side and move on.” He says that when a new stand-alone Bonsai shop opens on the Lower East Side this winter, the team will start out cash-free and see how it goes. “If we have to turn ten people away each day, we will start taking cash, and if it’s never an issue, then it’s never an issue.”
In reality, it can be something of an issue, and cashless businesses have different ways of handling customers who can’t or won’t pay by card. The ice-cream chain Van Leeuwen went completely cashless last fall. Co-founder Ben Van Leeuwen says that customers who have a problem with it are either tourists who are worried about transaction fees, or people who have cards but are against the business model on principal. Van Leeuwen store manager Henry Molina says that if a customer makes it to the front of their often-long lines without a card, he’ll politely explain the policy before ultimately letting the customer have one ice cream on the house. (Molina also says that if a customer has the exact amount of cash he’ll take it and swipe his card for them.) The taco and burrito chain Dos Toros went cash-free last year, too, and co-founder Leo Kremer says they train staff to err on the side of generosity. (He also points out that there are also work-arounds. For example, you could always go to a drug store, pay a fee, and buy a prepaid gift card, which feels like a lot of extra work to buy a burrito.) “If we have made someone their food and it turns out they don’t have a card,” Kremer says, “we’ll comp the meal and remind them for next time.” He adds, “I think that most people act in good faith.”
Most surprising to me is the fact that, for the most part, it’s completely legal for business owners to reject cash. There’s no federal statute that says that private businesses have to accept cash, and the only state that mandates businesses must accept cash is Massachusetts.
Fueled by concern about the discrimination that cashless businesses pose, lawmakers have been drafting bills. In Philadelphia, councilman William K. Greenlee and co-sponsor Maria Quinones-Sanchez have submitted one that would stop businesses from refusing to accept cash and amend the city’s Fair Practices Ordinance, which provides protections against unlawful discrimination. Greenlee started noticing cashless coffee shops appearing around City Hall, and says they didn’t sit right with him: “Just because you don’t have a piece of plastic, you can’t get a sandwich? Or a cup of coffee?” He says of cash-free businesses, “People from all walks of life come to the center of the city and it seems like these places are saying, we don’t need your business. That’s not a great statement to make.” Greenlee also told me that among the 28 percent of Philadelphians who either don’t have a bank account or who use financial services from an institution that is not a bank, a significantly higher portion are African-American and Latino. He says the arguments that businesses make for going cashless strike him as “weak,” and argues that if your customers use credit cards most of the time, there’s no need to ban cash. As far as he’s concerned it’s basic discrimination: Everyone can access cash, but not everyone can get a card.
Still, some owners say cash simply has no place at their businesses. Amirah Kassem is a co-owner of the bakery Flour Shop. “We created the space so you’d have this whole Disneyland, sprinkles-and-smiles experience when you walk in,” she says. “The boring things” — like cash — “don’t happen at Flour Shop.”