There’s a CVS in downtown Baltimore where I refuse to shop. Why?
They don’t take cash.
At all. Credit or debit cards only. The trend is growing. A burrito store in New York, Amazon bookstores, at least one Starbucks. Lots of clothing stores.
So, why is this a problem? If that’s your first thought, congratulations: You’re privileged.
Time to check (or maybe card) your privilege.
Who Doesn’t Have a Credit Card?
The answer many privileged people tend to go right to is “People who don’t trust themselves with one.” And that’s definitely a subset, but said people generally have a debit card, which these stores will also take.
The real answer?
As of March 9, 2019, no less than 25% of US households are either unbanked (no bank account at all) or underbanked (without access to things we consider basic banking services). In 2017, 8.4 million households in the US were considered completely unbanked, meaning nobody in the household had a bank account.
More than half of the unbanked households simply can’t afford a bank account. As banks raise minimums and charge ever higher fees to those who dip below them, more and more poor folk are left without a bank account. Others might not be able to open an account because they don’t have a street address (i.e., homeless people…who might scrape together enough cash to buy one of those afore-mentioned burritos).
Another reason why somebody might not have a bank account: There’s no bank for them to go to. Low income and rural areas often don’t have convenient branches.
Poor people. And, of course, in the U.S. at least, this disproportionately affects African-Americans and Latinos.
(And, yes, cashless stores are also inconvenient for people who aren’t comfortable with credit cards, who have had a cash management problem, or just don’t want a paper trail).
There’s another group of people that don’t always have cards that’s worth mentioning: Kids. Most middle school students don’t have access to cards and many high school students do. Families often get around this by giving their kids pre-paid cards.
Why are Stores going Cashless?
Bluntly: Stores are going cashless because of insurance costs. If you get rid of cash registers, armored cars to transport cash, if you don’t have an employee carrying a cash box to the bank each day, then your premiums are much lower.
Handling cash is also inconvenient.
Oh, and Visa literally gave grants to businesses to go cashless the other year. Obviously, it benefits them because of the fees they collect.
Many food trucks also go cashless because it takes more resources to handle cash.
It also lets them reduce the number of employees in the store (which is not always a good thing).
Can’t People Just Go Somewhere Else?
Remember that CVS I mentioned in the Inner Harbor.
It’s the only drug store in the Inner Harbor. It’s a several block walk to another one; something you might not want to do with a splitting headache you’re trying to buy a remedy for.
People can’t always go somewhere else, and some of these cashless stores are selling basic necessities.
All these are reasons why I personally won’t shop at a store that doesn’t take cash if they are selling things people need. Even though I use plastic for everything.
Because I look at that store and I envision some low income food service worker who works at one of the fast food outlets in the harbor needing to grab a headache remedy before her shift…
…but she doesn’t have a bank account, so she can’t.
Some jurisdictions are already starting to outlaw the phenomenon. Cashless stores are already illegal in Philadelphia and (no surprise here) New Jersey, and both San Francisco and New York City have legislation in the works. Massachusetts has had this in the law since, believe it or not, 1978.
Another way forward is cash-to-card kiosks, which are now being offered by Walmart, Amazon, and at least one sports stadium.
Obviously, the real solution is to improve access to banking services for everyone so this isn’t a problem. But while there are still millions of people for whom “card only” might as well be a padlock on the front door of the store, then at the very least stores that sell necessities should be obligated to take cash.