Philadelphia’s Ban on Cashless Stores Triggers Debate on Whether Such Bans Stifle Innovation or Increase Accessibility

Philadelphia enacted an ordinance in 2019 that made it one of the first major U.S. cities to ban cashless stores.  The ordinance, § 9-1132, prohibits anyone “selling or offering for sale goods or services at retail” from “refusing to accept cash as a form of payment to purchase goods or services.”  Included in this ordinance are bans on posting signs that cash payment is not accepted and charging higher prices to customers using cash.  The ordinance only applies to those conducting transactions in person so as to exclude a “telephone, mail, or Internet-based transaction.”

Some government offices, however, have stated that they will still continue to refuse cash, such as the Pennsylvania Department of Transportation.  Although private businesses are held to this law, state entities are exempt.  PennDOT cited security reasons for requiring this exemption.  The Philadelphia Parking Authority is also permitted to refuse cash for residential parking permits at its Center City office.  The law included other exemptions as well, such as parking lots and garages, wholesale clubs that use memberships, transactions for rental goods that require collateral or security, and goods or services provided only to employees.

The ordinance is listed under the “Fair Practices Ordinance: Protections Against Unlawful Discrimination.”  As the use of credit cards has expanded, some stores have moved to exclude the use of cash altogether for several different reasons.  According to USA Today, businesses in Philadelphia argued that banning cash allowed for quicker transactions, lower robbery risks, and better hygiene.

Although many Philadelphia businesses stated that they understood the reasoning for requiring cash acceptance, there have been opponents nationwide who argue that enforcing this ban on cashless stores stymies innovation.  There are some businesses, for instance, that have never relied on cash.  This includes app-based transportation companies.  Uber and Lyft are just a couple of examples.  Other companies, such as parking garages, rely on cashless operations for efficiency.  Requiring cash acceptance increases the need for attendants and slows the flow of vehicles leaving the garage.  While parking garages are exempt in Philadelphia, not all cashless bans have exempted them.

Opponents to such bans on cash have called the move discriminatory because it disproportionately impacts low-income populations that lack access to credit cards and bank accounts.  Furthermore, securing a credit or debit card generally requires an individual to present some form of ID, financial history, or money to deposit.  According to NPR, approximately one-third of Washington, D.C.  residents rely on cash because they have trouble securing a card or bank account, in part from the aforementioned requirements.

Philadelphia’s ban officially went into effect on October 1, 2019.  However, bans of this sort go back as far as 1978, when Massachusetts began requiring establishments to accept cash.  New York City, San Francisco, and New Jersey have all enacted similar legislation in the last year, and Washington D.C. held a hearing for a ban on cashless stores on February 13, 2020.  A bill was introduced in Congress in May 2019 and again in 2020 as well requiring businesses to accept cash, but there have been no other actions on the bill since.

As forms of payments such as the use of mobile apps and credit cards continue to expand with ongoing technological developments, it is likely that debates on whether cashless stores are essential to innovation or detrimental to accessibility will grow more prominent.

With contribution from Angela Mauroni, first year J.D. candidate at the University of Pittsburgh School of Law.