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The Legality of Cashless Stores: Tension Between Innovation & Discrimination

The first time I walked into a Sweetgreen, a fast-casual food chain tailored toward “simple, seasonal, healthy food”,1 I noticed a sign that the business would not accept cash.2  Sweetgreen was the first food chain where I noted the deliberate change in how transactions might be conducted going forward.  The sign provided a link for more information,3 and presented the following four reasons for going cashless: sustainability, the future, faster checkout, and streamlined store operations.4  Though efficient, the effect of cashless stores on communities is multifaceted.

Sweetgreen, as with the many other businesses that have gone cashless, has found itself facing backlash; critics argue that this practice is discriminatory and classist.5  One of the main critiques of cashless businesses is that they exclude low-income people and senior citizens.6  For example, low-income people might have limited access to credit cards because they require a certain income and credit score.7  Additionally, creating a bank account requires a certain amount of money.8  But, if indeed the decision to go cashless  is discriminatory, could that fact make it illegal?  Companies have focused on the greater efficiency of cashless transactions and its other benefits, rather than worrying about consumers who do not own a credit or debit card. In fact, they are even being incentivized to do so – Visa offered eligible restaurants $10,000 to opt-in to a 100% cashless quest.9

As the world increasingly moves toward cashless payments, how to regulate businesses that no longer accept cash has been left to state and local governments.  There is no federal statute mandating that a business accept currency or coins for payment and “[p]rivate businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which states otherwise.”10  The federal legislation that addresses the use of coins and paper currency as legal tender is the Coinage Act of 1965, but all this Act does is to require that coins and currency be accepted as legal tender for all “debts, public charges, taxes, and dues.”11  Buying that seasonal salad at Sweetgreen does not fall within this definition.12

Although there is thus no federal mandate preventing the United States from becoming a cashless economy, the federal Civil Rights Act mandates that all persons be entitled to equal enjoyment of goods without discrimination on the grounds of race, color, religion, or national origin.13  So if there is a legal argument to be made against cashless enterprises, it is likely to be brought under this Act.  At least one attorney and civil rights advocate, Marie Napoli, appreciates this potential legal argument, but she is not optimistic that it would withstand the business’s right to refuse service and other compelling interests if heard before the Supreme Court.14

Still, the quick answer to the question of whether cashless stores are illegal is not “no,” but rather “maybe.”  Cities are increasingly considering the potential discriminatory effects of cashless enterprises.  In Boston and Philadelphia, for example, it is illegal for businesses to go cashless.15  Massachusetts has had a law on its books since 1978 which prohibits discrimination against cash buyers, stating: “No retail establishment offering goods and services for sale shall discriminate against a cash buyer by requiring the use of credit by a buyer in order to purchase such goods and services. All such retail establishments must accept legal tender when offered as payment by the buyer.”16  Meanwhile, Philadelphia recently amended the City’s Fair Practices Ordinance to prohibit cashless retail, stating: “A person selling or offering for sale consumer goods or services at retail is prohibited from refusing to accept cash as a form of payment to purchase goods or services.”17

New York City,18 Washington D.C.,19 San Francisco, and Chicago are all considering bills similar to the one that just passed in Philadelphia.20  In New Jersey, a bill that “[p]rohibits discrimination against cash-paying consumers” was introduced to recognize that many constituents who lack bank accounts are low-income families who do not meet the minimum balance requirements and/or are deterred by fees.21  For New York City, twelve percent of unbanked and twenty-five percent of underbanked residents are people of color.22  While efficiency, hygiene, and safety are all legitimate purposes, they are not enough to prevent some municipal and state governments from enacting new regulations that prevent cashless stores.

Is it true that fewer people really use and depend on cash payments than they used to?   Fewer people rely upon cash in Sweden, which is predicted to be completely cashless by 2030.23  However, the UK saw the number of people who depend upon cash increase from “500,000 to 2.7 million” between 2016 and 2018.24  Regardless of increases and decreases in the use of cash, it is extremely likely that over time, going cashless will be more and more prevalent, so there is an immediate need to think creatively about how to prevent the electronic economy from discriminating against those without debit and credit cards.  While state and local regulations can effectively prevent cashless enterprises, the tension between innovation and discrimination is solvable.

The UK Greater Change pilot illustrates one way to close the discriminatory gap of cashless enterprises.25  This pilot allows for cashless donations to the homeless by providing each homeless person with a lanyard attached with a barcode that can be scanned by phones – allowing small amounts of money to be sent to the person with the barcode.26  This kind of innovation can allow for the positives of a cashless society to foster – including protecting employees from threats of robbery – while reducing some of the observed negatives.27  Whether cashless stores become or remain legal might actually depend upon continued innovation, which would help convince state and local governments that the benefits of a cashless society outweigh the detriments.

  1. Sweetgreen, (last visited Mar. 15, 2019)  

  2. See Alex Denis, Some Businesses Going Cashless As Americans Carry Less Paper Money, CBS N.Y. (Feb. 3, 2017, 9:43 AM),; Kimberly Davis, Councilman Proposes Bill to Ban Cashless Businesses in Philadelphia, CBS Phila. (Feb. 4, 2019, 11:47 PM), 

  3. Welcome to the Future – It’s Cashless, Medium (Dec. 27, 2016), 

  4. See Id

  5. See Thulan Unsoeld, Why Sweetgreen is Cashless and what that means for its Customers, Spoon U., 

  6. See id

  7. Id

  8. Id. 

  9. Jackie Wattles, Visa Offers Restaurants $10,000 … if they Stop Accepting Cash, CNN Bus. (July 14, 2017, 5:30 PM), 

  10. Legal Tender Status, U.S. Dep’t of the Treasury, 

  11. Coinage Act of 1965, 31 U.S.C. 5103 (2019). 

  12. See Rami Grunbaum, Starbucks’ Cashless Café Stirs Up Question – Shouldn’t Retailers Have to Accept ‘Legal Tender’?, Seattle Times (Jan. 19, 2018, 9:39 AM), 

  13. See Civil Rights Act of 1964, 42 U.S.C. § 2000e (2019). 

  14. Rebecca Bellan, As More Cities Ban Cashless Businesses, New York Wants to Follow, City Lab (Mar. 6, 2019). 

  15. See Barb Darrow, These Boston Businesses Are Weighing Credit-Only Payment Plans, Fortune (Aug. 4, 2016),; Karen Zraick, Philadelphia Bans ‘Cashless’ Stores Amid Growing Backlash, N.Y. Times: Bus. (Mar. 7, 2019), 

  16. Mass. Gen. Laws Ann. ch. 255D, § 10A (West 2018). 

  17. Phila. City Council, B. 180943 (As Amended Feb. 5, 2019). 

  18. N.Y.C. City Council, B. Int 1281-2018 (Hearing Testimony Feb. 14, 2019), 

  19. D.C. City Council, B. B22-0875 (Introduced June 26, 2018), 

  20. Karen Zraick, This Legislation Could Force Stores to Take Your Cash, N.Y. Times: Bus. (Feb. 20, 2019), 

  21. See S.B. 591, 218 Leg., 2018 Sess. (N.J. Pre-filed for Introduction),; Karen Zraick, This Legislation Could Force Stores to Take Your Cash, N.Y. Times: Bus. (Feb. 20, 2019), 

  22. Rebecca Bellan, As More Cities Ban Cashless Businesses, New York Wants to Follow, City Lab (Mar. 6, 2019), 

  23. Patrick Jenkins, ‘We Don’t Take Cash’: Is this the Future of Money?, Fin. Times (May 10, 2018), 

  24. See id.  

  25. Sidney Fussell, Who Wins When Cash Is No Longer King?, The Atl.: Tech. (Dec. 21, 2018), 

  26. Id. 

  27. Rebecca Bellan, As More Cities Ban Cashless Businesses, New York Wants to Follow, City Lab (Mar. 6, 2019),