SF could ban brick-and-mortar businesses from going cashless

In an effort to address inequity, San Francisco officials on Tuesday moved to prohibit cashless businesses.

Legislation introduced by Supervisor Vallie Brown would require that brick-and-mortar businesses citywide accept cash, not just credit cards and increasingly popular mobile payments. Other states and cities including New York, Chicago and Philadelphia are also considering similar legislation, while Massachusetts has had a cashless business ban on the books since 1978.
Supporters of the cashless trend argue it saves time and money while combating theft. But Brown views the issue as a matter of equity for low-income residents who do not have banking services.

“A lot of cities are seeing more of it,” Brown told the San Francisco Examiner. “There are places here that only accept credit cards. I just feel that it’s really targeting people that are unbanked.”

She continued, “It just makes it hard for people that want to pay cash, like if you want to buy a cup of coffee or food. We need to be inclusive.”

Brown said that while there are a handful of businesses in San Francisco now that are cashless, she believes the practice will only increase.

Customers wait for their food at cashless restaurant Organic Coup in the Financial District on Tuesday, Feb. 12, 2019. (Kevin N. Hume/S.F. Examiner)

Josie Holpp, manager at the Kearny Street branch of the restaurant Organic Coup, one of the businesses in San Francisco operating on a cashless model, said there are several benefits. “It’s for our safety,” she said. She said the store has been broken into twice and if anyone comes in to demand cash “we have nothing to give them.”
She also said it also eliminates discrepancies in overcharging or undercharging customers.

Asked about the impacts on customers without banking she said, “If they don’t have banking then there’s nothing we can do for them. It hasn’t been a problem.”

While it “hasn’t been a problem” in San Francisco, Holpp said their store location in Oakland started taking cash after receiving complaints about being cashless.

Holpp described Brown’s proposal as “not bad, but it’s not good either,” but said if it passes, “we will abide by the law.”

Brown’s legislation says that “for many city residents (for example, those who are denied access to credit, or who are unable to obtain bank accounts), the ability to purchase goods and services depends on the ability to pay for those goods and services in cash. This is especially true of the very poor.” It also notes that cashless businesses may have “significant detrimental impacts” on youth, homeless and immigrant populations.

The legislation also points to privacy issues: “Physical cash remains the most accessible anonymous medium of exchange in this country.”

Amanda Kahn Fried, a spokeswoman for Treasurer José Cisneros, said that “local data on unbanked populations reveals that persistently high percentages of individuals in low-income and communities of color remain without access to the financial mainstream.”

The Federal Deposit Insurance Corporation in a 2017 survey found that 4.8 percent of households were unbanked in SF-Oakland-Hayward, while across California unbanked households made up 7.4 percent of the population. That percentage is much higher for African-American households in California, 20.4 percent of whom are unbanked, and Latino households at 14.6 percent.

Repeated violations would constitute a misdemeanor and come with a fine of up to $1,000.

The legislation has already picked up enough support to pass, with supervisors Aaron Peskin, Hillary Ronen, Ahsha Safai, Rafael Mandelman, Sandra Fewer and Shamann Walton all co-sponsoring.
The legislation excludes such businesses as food trucks, ride hails, temporary pop-up businesses and Amazon Go, which doesn’t have check-out lines.

“They don’t have the employees to take the cash,” Brown said of Amazon Go. “I would love to see them have employees, but they don’t.”

A woman walks into the Amazon Go store at California and Battery streets on Tuesday, Feb. 12, 2019. (Kevin N. Hume/S.F. Examiner)
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