Philadelphia is first city to ban cashless stores and restaurants

• Philadelphia has become the first city in the U.S. to require most retailers to accept cash
• Some business owners say handling cash is inefficient and invites theft
• Critics of cashless merchants say the practice discriminates against low-income people
  

Philadelphia has passed a law requiring most retail establishments to accept cash, making it the first U.S. city to ban a practice critics say is discriminatory.

Mayor Jim Kenney last week signed the law, passed by the city council in February, banning stores and restaurants from implementing cashless policies. It will take effect July 1, and business owners who don't comply will face fines of up to $2,000.

Cashless policies are gaining currency in a number of cities, with some business owners saying that handling cash is inefficient and invites theft. But opponents say cashless establishments exclude people who are "unbanked," or those lacking checking or savings accounts. In 2017, 8.4 million U.S. households were unbanked, according to the Federal Deposit Insurance Corporation. 

Philadelphia city councilman Bill Greenlee, a co-sponsor of the bill, said the new law restores the right of everyone with money to do business in stores. 

"I can go into a coffee shop across from City Hall that's cashless and get my coffee and muffin, but the person behind me that has United States currency can't get the same cup of coffee. It's a fairness issue; it creates an us-and-them kind of situation," he said. 

Greenlee argues that businesses have long operated efficiently while accepting cash. "We are not asking them to do something they don't know how to do. They accepted cash before." 

Amazon isn't pleased

There is no federal law requiring that businesses accept cash; around the country, only Massachusetts has a law on the books requiring stores to accept greenbacks. Yet concerns about cashless merchants is growing, with similar bans proposed in New Jersey and New York, as well as Chicago, San Francisco and Washington, D.C. 

The issue is also sparking pushback from none other than Amazon. The ecommerce giant last month threatened to scrap plans to open brick-and-mortar Go stores in Philadelphia over the proposed law -- which has since passed. The outlets have no cashiers and only accept digital forms of payment enabled by sensors and automation software.

It's unclear if Amazon is exempt under the new restrictions in Philadelphia. An Amazon spokesperson declined comment. 

Other cashless retailers that might not feel the brotherly love with the new law include the salad bar chain Sweetgreen and Bluestone Lane coffee shops -- which will be forced to accept cash if they want to stay in business locally.  

The Philadelphia law does not cover transactions that take place at parking lots and garages, or businesses that operate through a membership model. Greenlee said the city is open to working with businesses concerned about the regulations. 

Still, he is clear in saying that intent of the new law is to protect ordinary Philadelphians. "Our priority has to be the folks who live here now, who were paying taxes."