Critics of no-cash policies argue that they impose barriers to access for low-income, young and undocumented patrons who are less likely to have bank accounts. According to a federal survey, 7 percent of U.S. households did not have a checking or savings account in 2015; among black and Hispanic households, that figure was more than twice as high. In the D.C. area, an estimated 37,000 households are currently “unbanked.” With more businesses choosing to go cashless, these people are seeing their retail options dwindle.
At the same time, many retailers have valid reasons for going cashless. Accepting cash can leave them vulnerable to theft and can generate miscellaneous costs, such as the extra hours needed to close the register and the armored vehicles required to take money to the bank. It can also result in slower service, because it generally takes more time to process cash and calculate change at the register. Sweetgreen, for instance, found that its stores were able to process between 5 and 15 percent more transactions per hour when it first experimented with no-cash policies in 2016. For many businesses, this extra revenue could have a significant effect on the bottom line.
As the cashless movement expands nationwide, policymakers need to find ways to ensure that people are not left behind. But forcing retailers to change their business models and accept cash is going a step too far. Instead of cracking down on no-cash stores, a more sustainable solution would be to offer affordable banking options to low-income residents. The city government has already started this process by partnering with financial institutions and nonprofits to establish Bank on DC, a program that provides financial education and expands access to low-cost accounts. The program has helped open more than 11,000 accounts since 2010. This type of initiative, which can help residents adapt to a rapidly changing financial landscape, would better serve the District than the short-term fix of banning cashless stores.