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Cashless Businesses Have Fans and Critics, Even in Alexandria, Virginia

More and more transactions are electronic only. (Photo: Adobe Stock licensed to The Zebra Press, LLC)

Alexandria, VA – In an era driven by technological advancements, the traditional methods of conducting business are constantly evolving. One such evolution is the rise of cashless businesses – establishments that solely rely on electronic forms of payment such as credit cards, mobile wallets, and online payment platforms. From big-box retailers with self-service lanes that only take cash to vendors at farmer’s markets, customers are increasingly confronted with signs at checkout that read “no cash.”

Jula Coggins, owner of Jula’s on the Potomac, said that her restaurant went cashless at the start of the pandemic for myriad reasons. “When we were allowed to reopen, we took the health department’s advice and stopped accepting cash,” Coggins said. “In addition to the safety concerns – money is pretty dirty after all – the local branch of our bank closed, meaning we were spending more time traveling a greater distance to make deposits and get change.”According to a survey in late 2022 by the Pew Charitable Trust, approximately 41 percent of Americans reported that none of their purchases in a typical week were paid for using cash, up from 29 percent in 2018 and 24 percent in 2015. For businesses, the anticipated benefits include no cash processing costs (i.e., time spent making deposits, withdrawals, and change), a more efficient and convenient checkout, less risk of fraud, and a better paper trail for accounting (for both the business and the customer).

Coggins said that her eponymous restaurant has realized all these benefits, and more. “Servers don’t have to walk around with their aprons full of change. Their paychecks, moreover, reflect the entirety of their pay, which means they value their jobs more, because they see what they’re earning. And the higher W-2 income results in increased contributions towards Social Security and Medicare and a more robust (and accurate) financial history if they go for a loan.”

National salad chain Sweetgreen, which was founded in Georgetown, experimented with going cashless in 2016, and reported that those stores recorded up to 15 percent more transactions an hour than its stores that took cash. It also found that its digital-only locations saved approximately two hours per day on cash management work, such as balancing register drawers and making bank deposits.

As a result, Sweetgreen declared that by March 2017, it would no longer accept cash in any of its stores. Two years later, it reversed course and announced that it would begin accepting cash again by the end of 2019, explaining that its move “had the unintended consequence of excluding those who prefer to pay or can only pay with cash.”

Indeed, an estimated 4.5 percent of U.S. households (approximately 5.9 million) were “unbanked” in 2021, according to the Federal Deposit Insurance Corporation, meaning that no one in the household had a checking or savings account at a bank or credit union. Rates were highest among lower-income households, less-educated households, Black households, Hispanic households, working-age households with a disability, and single-mother households.

Longtime Del Ray resident Rod Kuckro is a critic of the decision by several Alexandria businesses to go “digital only.” “I have means and I can make choices. But not everybody has a digital monetary footprint, or even a banking relationship. People are unbanked for all sorts of reasons.” Other concerns about moving towards a cashless society involve leaving behind those who are homeless, who do not have access to technology, or who are not familiar with digital payment systems. There are also concerns about privacy and transaction fees.

For many of these reasons, the District of Columbia Council passed the “Cashless Retailers Prohibition Amendment Act” effective April 2021, which makes it illegal for a retailer to “discriminate against cash” by refusing to accept cash as a form of payment, posting signs on the premises that cash payment is not accepted, or charging a higher price to consumers who pay cash. In recent years, Colorado, Delaware, Idaho, Massachusetts, Michigan, Minnesota, Mississippi, New York, Oregon, Pennsylvania, New Jersey, Rhode Island, Vermont, and Wisconsin, as well as major cities including New York City, Philadelphia, and San Francisco, have enacted legislation barring businesses from adopting no-cash policies.

Kuckro is among those who believe Alexandria should follow suit: “The City of Alexandria could consider making it a condition of issuing a special use permit that you have to take cash, just as some larger cities and states have done. I don’t think its objectionable for government to want to step in and say, ‘let’s treat everybody the same and let them spend the currency they’ve earned through the sweat of their brow.’”

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