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King County Council Considers Banning Cashless Retailers

Washington’s biggest county has proposed a requirement that retailers in unincorporated areas accept up to $250 in cash for a single transaction and would prohibit marking up prices for cash-paying customers.

(TNS) — A new King County, Wash., Council proposal would ban cashless retailers, a move supporters say would ensure residents without access to banking services can still make purchases.

The proposal, introduced by Councilmember Jeanne Kohl-Welles, would require retailers in unincorporated parts of the county to accept up to $250 in cash for a single transaction. Businesses would also be prohibited from charging cash-paying customers a higher price.

In the early days of the pandemic when less was known about how the coronavirus spread, some businesses began using exclusively contactless payment systems as a precaution. But even before COVID-19, some had already transitioned to a cashless model. Companies and small businesses that have made the switch have drawn criticism from some that the move discriminates against low-income consumers who don't own debit or credit cards and that it raises privacy concerns.

People in favor of a cashless economy argue it makes check outs faster and improves worker safety by reducing the risk of theft or robbery. Online delivery services and cashless registers have led to an increase in tipping for some workers.

Some consumer advocates have also described the restricting of no-cash businesses as stifling innovation, and called on lawmakers to instead prioritize improving access to banking institutions for marginalized residents.

About one in ten King County residents were underbanked, meaning they had an account at an insured institution, but also regularly use a financial service outside the banking industry, like payday loans or check cashing.

Roughly 1.9 percent of King County's population — about 42,000 people — had no access to banking services in 2018, according to federal banking data analyzed by Prosperity Now, a national nonprofit focused on serving low-income communities.

Kohl-Welles said she and her staff have become increasingly concerned by the number of businesses that refuse to accept cash.

"With increasing income inequality in the Seattle area ... we started thinking about this, 'Do all people have fair and readily available access to being able to purchase the goods and services they need?'" Kohl-Welles said.

In the United States, there is no federal law requiring private businesses accept cash or coins as a form of payment. That's why bus systems are able to reject pennies as payment for fares, or why a gas station can refuse to accept bills larger than $20.

In 2018, Starbucks briefly tested a no-cash policy at a former downtown location inside the Russell Investments Center. Salad chain Tender Greens went cashless that same year, arguing customers would move through lines faster.

Kohl-Welles said it's unclear how many businesses are cashless in King County. A 2021 survey from online payment processing service Square estimated about 14 percent of U.S. businesses were cashless.

In some cases, the cashless model doesn't last. Salad chain Sweetgreen, one of the most prominent companies to refuse cash for payment, began the policy in 2016 and reversed it in 2019.

Burger chain Shake Shack scrapped plans to transition to a no-cash model in 2018 after receiving customer backlash. Initially designed as a cash-free experience, Amazon Go grocery stores now allow customers to pay with cash by flagging down an employee in lieu of scanning in with a smartphone connected to an Amazon account.

Those reversals came as a number of cities began cracking down on cashless stores and restaurants starting in 2019, including New York, Philadelphia and San Francisco. Several states, among them Massachusetts, New Jersey and Colorado, also require most businesses accept cash for payment.

In general, cash has become less popular among shoppers in the United States. A 2022 Pew Research Center survey found that 41 percent of Americans say none of their purchases in a typical week are paid for using cash, up from 29 percent in 2018.

But research suggests lower-income communities, people of color and older adults are still more likely to rely on cash than shoppers who are wealthier, white or younger.

About 30 percent of Americans whose households make less than $30,000 a year say they use cash for all or almost all of their purchases in a typical week, Pew found.

A higher percentage of Black and Hispanic adults use cash for a majority of their spending, compared to white adults, according to the Pew study. Adults over 50 years old are also more likely to have cash on hand compared to adults 18 to 49.

Consumers in general still use cash frequently for small purchases under $25, according to a 2019 report from the Federal Reserve Bank of San Francisco. But even before the pandemic, those kinds of purchases — like to-go coffee or lunch runs at work — had been declining among Americans each year since 2016, Federal Reserve researchers found.

Kohl-Welles said that while the policy would only apply to unincorporated parts of the county, she's hopeful "this is something that could catch on" in cities like Seattle and Bellevue.

King County Council on Tuesday referred the proposal to the Local Services and Land Use Committee for review and public feedback, with the ordinance expected to ultimately return to the full council for a vote in the coming months.


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