Cities ban businesses banning cash during COVID-19
According to US Census Bureau estimatesretail sales fell 16.4% in April 2020. As state and local governments across the country begin to lift or ease stay-at-home orders and business closures, retailers reopening are wondering how to protect the health of their employees and reassure customers that it is safe to shop.
In response to the COVID-19 pandemic, many retailers are adopting contactless delivery or curbside pickup business models. Curbside pickup allows customers using debit or credit to prepay and collect their prepackaged products without any direct physical contact with company employees. Since many local and state governments have set maximum capacity limits for reopened retail stores, curbside pickup is likely to remain a popular option for some consumers until a vaccine or effective treatment against COVID-19 is discovered, or new cases drop significantly.
Businesses considering curbside pickup should beware that a growing number of states and cities have passed laws requiring retailers to accept cash payment for certain transactions. Below U.S. Treasury Department Guidelines, federal law does not require private businesses to accept US currency or coins as payment. Retailers may adopt policies limiting payment methods to debit, credit, or other electronic means such as Square, Venmo, PayPal, or ApplePay, unless limited by state or local law. Galvanized by fears that cashless businesses disadvantage communities with limited access to traditional banking systems, a nationwide movement protecting consumers’ ability to pay in cash could emerge.
Prior to 2019, no city and only one state – Massachusetts – prohibited retailers from refusing cash. However, from the Retail Blog last post as of January 2019, at least 21 cities and states have passed or are considering banning cashless retail. Massachusetts, Rhode Island and New Jersey have already enacted bans, and at least 10 states could be on the verge of following suit. Berkeley, Philadelphia and San Francisco also prohibit retailers from refusing cash; The New York City ban goes into effect November 21, 2020. At least four other major cities are considering bans of their own.
It remains to be seen how vigorously cities and states enforce these laws during the COVID-19 public health emergency. On April 1, 2020, Massachusetts State Attorney General Maura Healey tweeted a warning to businesses in the Bay State – pandemic or no pandemic, it’s still illegal for retailers to refuse to accept some change.
Although there is little evidence that these laws are consistently enforced, many carry substantial penalties for violation. New York City law prohibits food and retail establishments from refusing cash or charging a higher price to cash customers, but exempts online, mail and telephone transactions. Companies that break the law face fines of up to $1,000 for the first violation, and no more than $1,500 for each subsequent violation.
Before moving to a cashless model, retailers should consult with an attorney to confirm that local and state laws do not prohibit discrimination against cash payments. Since many cashless retail bans exclude internet, mail and telephone transactions, businesses can continue to deliver and collect curbside without violating the ban, as long as their in-store customers can pay. cash. Once a cashless policy is implemented, retailers should regularly monitor state and local legislatures for cash payment protection proposals, especially if they do business in a large number of jurisdictions.
Copyright © 2022, Hunter Andrews Kurth LLP. All rights reserved.National Law Review, Volume X, Number 157