Should retail businesses be required to accept cash?
inspired by a law my local county council has been debating (local news article, press release from January from the sponsoring councilmember, and actual text of the proposed law)
from the press release:
During and even before the COVID-19 pandemic, many businesses in the Seattle area and beyond began shifting to cashless operation, leaving people who rely on cash with fewer options to purchase goods and services. Research, however, shows that cashless businesses most impact communities of color, seniors, people with disabilities, undocumented residents, refugee and immigrant and communities and low-income communities.
...
At least 2.1% of Washington residents are unbanked, meaning they don’t have bank accounts, credit cards or other typical financial services, according to the 2021 FDIC Household Survey. Five-year estimates put that number even higher – at 3.1%. More than 17% of residents are underbanked, meaning they might have a bank account but often rely on alternative financial services, such as money orders, check-cashing services and payday loans.
...
The legislation would require businesses in unincorporated King County to accept cash for most retail transactions, and to not charge higher prices than for another form of payment. It would allow for retailers to only accept up to $250 in cash payment for single transactions larger than that amount. It would allow for civil actions to be brought by someone whose cash payment was refused.
what do you think about requiring this?
(especially interested in responses from around the world and not just the US, since I think cash vs. card reliance varies considerably by country)
I live in a US area that already had 'must accept cash' laws on the books.
I'm 100% in favor, even though I personally don't use cash much. Technology is fickle and annoying, and credit card processing straight up fails all the time. It's nice knowing that having $40 on me is a reasonable failsafe for when the card reader messes up. I don't like needing to have a dozen different accounts and apps to exchange money.
I also don't like how cashless options hide so much of their operational costs. I fully support cash/credit pricing, when it reflects the true cost of these things (hint: those credit card bonuses to users are less than half of the fees).
If we ever did decide to embrace a cashless world, the government should own the entirety of the banking infrastructure, and all taxes could just be transaction based.
Handling cash generates costs too.
It does, but I'm betting it's not 2-8% of all revenue.
Especially if intelligently pricing to avoid as much coinage as possible.
In Europe interchange fees are capped at 0.2% for debit cards and 0.3% for credit cards
Card is cheaper for the merchant in Europe than cash.
Interchange fees are only part of the picture, though its nice to see Europe is doing better there.
A lot of them are also like $0.10+%transaction, which is why a lot of US businesses have $5 minimums on credit card purchases.
It's hard to find good unbiased numbers, but it's certainly plausible.
The inability to find unbiased numbers is a failed sniff test on its own. I get extra wary when I feel I'm being sold to (use our CC payment solution!). While I think the source is correct, one thing I think they gloss over is that a lot of those costs (like staff operational duty stuff) double dip, because they would happen as part of the shift work they'd be doing anyway.
And it very much depends on scale. If you're selling lots of transactions < $10 credit card fees hurt a lot more.
Technology may be fickle but if there's any aspect of technology that basically works its credit card processing. I've had problems where there was an issue with one of my cards (like over the limit) so it was declined, but trying a new card works. I can't even think of a time in the last 20 years when literally NONE of my cards worked.
The reason I don't think businesses should be required to accept cash is because it makes them a robbery target. Think about NYC taxi drivers, who were a constant target for armed robberies and needed like bulletproof dividers in the 70s and 80s. Not only were riders paying in cash but drivers also had to maintain a drawer for making change etc. The fact that uber drivers can make hundreds of dollars a day and have no cash on them is a huge benefit. The same applies to every food truck or street vendor that runs their whole business from a cell phone and a square card reader.
Businesses should be allowed to use technology to evolve their business model. If lack of access to a debit card is a social issue, then the federal government can change the laws to have the post office give out debit cards and require all banks to allow for depositing cash at an ATM and linking it to the debit card without fees. Frankly, it's BS that debit cards ever have fees for putting cash onto them, if we're going to pass a law I'd rather pass that law than one that requires businesses to become a cash robbery target.
Small list of failures I've seen in the last year in the USA. I'm not in a big city, but hardly rural either:
To any reply thinking "well have a backup payment method," the answer is...I do. It's cash, and its foolproof in a way none of the others are.
Agreed, it is too hard to rely on a system where control of your money can be removed through no fault of your own. To add to your list of potential failures of the system, I'd like to add actual identity theft. About 5 years ago, someone stole information on my credit and debit cards from a grocery store. Fortunately I had cash in my apartment for emergencies and was able to wait out the several days it took to replace cards and refund the money (this happened on a Friday).
Even had I not personally had cash, potentially i could borrow it from friends or relatives until new cards are available. It's unlikely that most folks would lend someone their card, or be in a position to do so. I have a hard time seeing how that sort of utility can be replaced in an electronic only system since the system itself is what is compromised.
There are a great many costs to accepting cash, which is why smart businesses avoid it. In addition to the robbery risk, there's lost time/payroll to counting drawers, doing pulls/drops, restocking small denomination bills, counting cash at the end of the day, paying an armored courier to do bank runs (or risking robbery). You also need a safe. Transactions also become slower and more complicated with cash handling, when people can otherwise just tap their card/phone/watch on a reader and be done.
On the individual side, a cash culture is one that perpetuates a risk of mugging and pickpocketing. That sort of crime isn't as prevalent as it used to be, given that it's now most likely to yield only a wallet full of cards, which are a trickier thing to put to use and stand a greater chance of being caught (and charged with grand larceny instead of petty theft). It's much more difficult to use a stolen credit card without being caught, or to sell it to a crime ring that puts them to use, than to pass untraceable bills.
We do need further laws targeting the inequality in the banking system, but cash is an outdated, inconvenient liability that we don't need to be encouraging.
This is a crazy take to me. Not that I don't believe you, but I do not share your experience at all. I used to carry a bit of cash "just in case". After 15 years of literally never encountering a situation where that cash was useful, I decided to reclaim that volume in my wallet.
I have long wished that our government maintained it's own electronic payments system to ensure that everyone had access and that we could cut out the middlemen. It's my understanding that any interoperability in the financial world can basically be given credit to providence and miracles and requires arcane rituals.
But it's a pipe dream, and there are much bigger and more pressing issues to take care of first.
Ok, but that kind of tax would be regressive as hell. People who spend pretty much all of their income (read: the poor) would end up paying a larger percentage of both their income but ESPECIALLY their disposable income in taxes.
In theory yes, if you only look at the individual level. And ignore how this could eliminate all other taxes.
But that money changes hands a lot more before it gets to the individual. This is a pretty well thought out thing
Suppose: All other taxes are abolished. Arbitrary 1% tax divided between sender/recipient, for every transaction. This would yield roughly double the amount of tax collected nationwide compared to the current system. Collected automatically from the bank accounts as transactions are made, no further need for complicated tax code or filing returns. Despite that so much more revenue is gathered, its baked into every facet of the econonomy at such a low level it would be transparent....People currently pay more "tax" to Visa/Mastercard for the courtesy of swiping their cards.
Company sells $10 widget to customer: Customer pays $0.05 tax, Company pays $0.05 tax. In where I live, today, if I buy a $10 item I pay $0.60 in sales tax. Big savings for customer there.
Company pays you $1000? Company pays $5 tax, you pay $5 tax.
I pay landlod $500 rent? I pay $2.50 tax, so does landlord.
Company buys $5 of parts from another company? Both companies pay $0.025 in tax.
Guy with $10,000 in the bank uses Robinhood to buy Gamestop? Robinhood and Guy pay $50 tax on that transfer from Guy to Robinhood, so on and so forth.
The burden on individuals is dramatically lowered because giant sectors of financialization that otherwise escape taxation are now covered, automatically, as a way of doing business.
Ok, now suppose you have all sorts of second-hand products in consumer hands that they no longer need and want to sell; garage sales, FB marketplace, craigslist, estate sales, quick/convenience sales. You would need to be hooked up to a network, requiring internet or cell service and have a device; PC, tablet, phone, card, card reader to make that second hand transaction. How are you going to guarantee that every individual (including homeless and poverty stricken) has access to these products and services? And in rural or remote locations where cell and satellite and sometimes internet service is lacking?
So in tandem with money entirely to digital banking infrastructure you need to provide services like these for every individual as well as free power for that homeless guy to charge his phone to receive a transaction. You need to pay for server/database centers, backup and security. You need to implement these in foreign lands to do foreign transactions or exchange of currency.
And you think those start-up costs are going to be covered by lower tax rates while local and state taxes are still relied upon for infrastructure?
Nothing about digital currency is going to cost less in taxes for the individual. You would also be upending the current banking infrastructure, since they wouldn't be generating revenue from fees and don't handle cash savings they would likely have to sell all of their loans, mortgages and liens to the central bank controlled by the government. Commercial bank property would have to be repurposed and banking personnel would have be reintegrated into the new system likely with a lot of lay-offs in the process since a digital format requires less human interaction.
You must have missed that I'm still very pro-cash. The best news is an APT can still work with cash, by accounting for the number of times it changes hands before re-entering a bank, which is roughly 2.5. You charge that additional multiplier for converting to cash.
My point is that an APT could replace every other form of tax due to sheer volume, at an incredibly low percentage. Like < 1% to replace every Federal, State, and Local tax.
I'm below median household income at about $100k. About 1/3 of that is lost to taxes on the way in. With a APT, that would be $1k or less. And then 1k total on the way out spending all of it.
This is a good thing. Jobs that shouldn't exist aren't worth mourning. I will weep precicesly 0 for anyone whom works in private health insurance if/when their industry becomes banned. And with fiat currency there's no reason for any entity other than the state be allowed to do it.
Federal and State taxes would not change, they will still garnish from wages and business profits. Local taxes are largely collected from local real estate. These are the largest amounts of taxes you pay and would not change from having a flat rate on transactional sales tax. it would also obfuscate where the allocation of that money needs to actually go since the federal gov would be taking it instead of the state or local levied taxes ( sales tax, liquor tax, marijuana/tobacco tax, tolls). I would rather have locally collected taxes affect me locally instead of paying for infrastructure in the welfare states. So, no, I still don't see how a flat rate sales tax that goes to the feds is better than the state elected and collected taxes that we currently do.
And because each state is different in their sales tax rate, population and economic stimulation from some places having 0% up to others having >10% I would think the flat rate would have to be closer to 4-5% just to collect near the same amounts currently with greater than double the amount in transactions. If you tried to bundle in income taxes and property taxes to eliminate them you would be looking at something closer to >15% flat rate.
Also "Sales taxes are just one part of an overall tax structure and should be considered in context. For example, Tennessee has high sales taxes but no income tax, whereas Oregon has no sales tax but high income taxes. While many factors influence business location and investment decisions, sales taxes are something within policymakers’ control that can have immediate impacts."
Not everyone has a credit card or bank accounts, and cash is legal tender, so yes, for equal access to all, businesses should be forced to accept cash.
Besides, cash is private. I don’t necessarily need my bank (or whoever can get my bank records) knowing exactly every place I spend my money.
I think there are a lot of positives arising from the demise of cash, just want to get that bias out from the start.
However my biggest issue with this is that they seem to identify a problem in the banking system not serving all of their community, and the way to fix this is to require all businesses to accept cash. The corrective action doesn't match the root cause of the identified issue.
I think cash will continue to decrease in popularity over time, so if the government isn't working to break down the barriers to the banking system then it's going to leave those folks stuck in an outdated system. They're also being denied all of the benefits the banking system provides.
Postal banking would solve a lot of issues including this one.
Hadn't heard of that before but makes a lot of sense.
That the Post Office's responsibilities were never expanded to Internet, and phones before that, also feels like a missed opportunity. The original purpose was cheap guaranteed communication between all citizens. That there became quicker methods than physical letters doesn't change that purpose.
I believe this once existed, in fact, in the U.S. If I recall, the Post Office didn't offer full banking services, but provided the basics (depositing/saving money, etc.). I'm not sure why it disappeared. Sometimes I wish we'd approach more issues like we do mail delivery. We have no problem with companies competing with the USPS, and I'd say it ultimately serves consumers' interests. But simultaneously, where there is little-to-no profit motive to provide delivery services to certain remote communities, the USPS is there to provide because it is mandated, to some extent, by the government.
I'd love to see the USPS get a bit more love. Or, at this rate, let's get to building the US Banking Service (USBS) and the US Communications Service (USCS).
Another benefit is it requires a base level of competence from private companies who want to offer a better service. I'd be that if the USPS offered postal banking without overdraft fees (just for example) consumer banks would lose that pretty quickly.
I agree with the parent comment too that email/the Internet in general was a missed opportunity for the USPS.
Think about how much worse Fedex, UPS, and DHL would be if USPS didn't exist.
I think it'd kill package delivery inside a month. In the US, I don't think I've ever had a single package delivered DHL without problems.
That's because it's a bandaid that is much quicker, cheaper, and easy to enforce than "insure that every single person has equal access to banking"
Related: I'm an advocate for speed humps in all residential roads, because it's a lot more effective at reducing speeders than signage and ticketing.
In the speeding case the signs, enforcement, and speed humps are all trying to solve the problem of speeding. If the problem is that people can't use banks, requiring acceptance of cash doesn't affect banking at all.
I don't want to make it seem like I believe there can only be a single solution (i.e. Signs only, no speed humps), but trying to address a banking problem without making any changes to banking regulations seems to miss the mark imho.
You're not wrong, but again its an ease/cost-benefit thing. Banking regulations are hard and met with fierce resistance. It's easy for voters to comprehend "Vendor must accept legal tender" than to explain to someone who doesn't have problems accessing banks that some people do have those problems.
I had someone on Nextdoor complain about how speed humps are a nuisance and that we just need better enforcement from police. I pointed out how speed humps work 24/7 for decades for a one-time install cost of < $10,000. For a small town, it's hard to beat that cost/benefit.
I mean they're not called sleeping policemen for nothing, nextdoor can be pretty toxic in my experience.
Understand I may be tilting at windmills, but I do wish politics could tilt the scales more towards better long term solutions that might be more difficult than the easiest path in the moment.
U.S.-centric opinion here.
No, I don’t think so.
I’m of the opinion that the penny and the nickel should be eliminated (at the very least).
Cash is a huge inconvenience to everyone involved and I don’t think businesses should be forced to deal with it.
Canada here, so probably pretty comparable.
I think certain classes of items or stores should probably have these requirements, but perhaps not all. Grocery stores are one of the easiest to advocate for, where we should minimize any barriers to access when possible.
For any non-essentials, though, I too would lean towards that being the businesses choice. Dealing with cash can add a non-trivial amount of overhead. I can't remember the last time my card payments had failed me.
This is where I land as well (US), grocery stores or gas stations, medical facilities/pharmacies etc., should all be required to accept cash. If a tattoo shop/burger joint/whatever doesn’t want to then that’s their prerogative.
I think every business should be able to take cash in the event their card systems go down. I have had MANY occurrences of walking into a store to make a purchase and been told "our internet/card payment systems are down at the moment, cash transactions only." So it definitely still happens enough times to still require a business at least be prepared to take cash in the event of a systems failure. Particularly after the Canada-wide Rogers outage last year that caused our entire banking network to be unavailable for a couple of days.
There are some people who can not, or choose not to, access bank services. How should these people pay for goods and services?
They can buy a prepaid debit card with cash I guess.
"Choose not to" I'll easily grant you, but who truly can't access banking services? If that's really true, that sounds like a much more important thing to solve than whether merchants should be required to accept cash.
The term to google is "banking desert", and there are way more than you'd think.
Color me unconvinced. For the vast majority of the last 20 years I have banked exclusively at a bank that effectively does not have physical branches. Even before smartphones existed, physical branch access was not a major factor. The linked article seems to agree...
Dimes are functionally useless, too. Especially when there is no nickels to account for the extra 5 cents on the quarter.
But let’s face it, quarters are the new penny. There is literally nothing you can buy for a quarter these days except for approximately 5 m&ms in increasingly rare candy machines.
The one, five, and maybe 10 dollar bill should be replaced with coins.
As a non-american, Quarters are weird. Over here we have 10-cent coins, 20-cent coins, and 50-cent coins. We have $1 coins, $2 coins, and then $5 notes. The abrupt transition to notes aside, it's a very sensible pattern that then continues with a $10 note, a $20 note, and a $50 note. And then a $100 note, obviously.
I don't know what coins/notes the US has, but they don't seem to follow a sensible pattern. You have a quarter, but not a $2.50 coin/note, and I'm willing to bet you don't have a $25 note. Why?
Before developing their own currency, the American colonies widely used the Spanish dollar. It was common for the Spanish dollar to be divided into 8 pieces, or bits. “Two bits” is a quarter. Since this mental model already existed, the Americans decided to make a quarter coin.
And you know how much Americans love odd fractions and hanging on to legal and economic concepts from over 200 years ago.
We have the 1 cent penny, 5 cent nickel, 10 cent dime, quarter, $1 note (tried coins a couple times), uncommon but valid $2 note, $5, $10, $20 (most common), $50, $100.
And by dividing, literally mean "cutting." A great read with more details.
The metric system and decimals are great and all, but the 2/4/8/16 cutting works really well when you don't have machines doing the work for you.
We have 5-cent coins (which aren't accepted by vending machines), and they're a waste of time so I wish they'd die.
We used to have 1 and 2 cent coins, but they were phased out in 1992.
We still have stuff sold for e.g. "$6.99", but the cost is rounded to the nearest 5 cents at the checkout - so if you buy three "$6.99" items, you'll pay $20.95 (rounded down from $20.97).
In practice, aside from the "99" shittery it's a wash as to whether you save or lose 2 cents per shop, and it's never worth caring about. If we lose the 5 cent coin then we'll lose at most 4 cents per shop.
There's plenty of laundromats that use quarters, but even then I wouldn't be surprised if there's facilities out there that use card readers, too.
A LOT of vending machines I see have had tap for a long time. Some businesses have tap tip or donation jars, but its usually a business where you wouldn't tip so its extra weird. When I go to a local market most of the vendors have square or clover terminals, even some of the older vendors. All the food trucks have them.
Bit of a word salad there, but just to say that random small scale tap and pay terminals are extremely common where I live.
Years ago when I used laundromats, quarter machines were rare. I am amazed there are any left because they often cost $2+ to use any machine, and 8 quarters are really inconvenient for everyone.
Yeah, but how many laundromats did you actually go to nationwide? All machines at two locations near me use quarters. It is inconvenient though, 14 quarters for the machines I used most often.
The first article I found says:
Source
So the quarter is probably hard to get rid of soon, but we could probably get rid of pennies, nickels and dimes without really affecting cash transactions.
14 quarters is just ludacris.
The last time I had to deal with coin laundry was when I lived in an apartment complex, and the only washer/dryer hookups required a compact stacked unit not supplied with the unit. After a few months of pain because we never had enough quarters to use the machines, we ended up spending the money on the washer/dryer unit. Even though the machines were at an on-site launderette, the machine we bought paid for itself several times over in convenience alone.
$3 in quarters for a washer and $2 in quarters for an hour's time in the dryer is a lot of change to manage, but thankfully there's a quarter machine on-site, and an ATM was recently installed, too.
Strangely enough though, I've grown quite fond of the routine, but I guess the laundromat's location plays a large role in that. I can dip into a nearby coffee shop and catch up on reading, or I can bring myself back to the laundromat and let the low, rhythmic drone of the machines bring me into some weird state of zen, which is even better for reading.
Great for people watching, too.
I. In canada, my buildings laundry mat are a $1.75 for the washer, and $1.50 for 20 minutes on the dryer, and ever additional quarter adds 5 minutes to the dryer
There are still many silver dimes that can be culled from circulation, hearing that the dime, or even the nickel are going to be removed from circulation would put me in a particularly sour mood for a while, the only silver lining being that I learned about coin roll hunting a year ago, so I at least have a year of memories with it, better to have loved and loss than never to have loved at all
I already mentioned this elsewhere in the thread, but as a coin roll hunter in canada, where we have already axed the penny, I pray that the nickel has many more years ahead of it, there is still some nice old nickels to be found in circulation, for instemce I recently found a 1964 extra water line nickels, which I could sell for about $20 to a coin collector if I wanted, it was super fun to find, but if was no nickels, id of never had the chance to find it, not too mention us coin roll hunters in canada are still trying to cull all the pre 1982 nickels from circulation as they are worth 12 cents in scrap metal each
UK retail business owner here.
The business has been operating approaching 5 years. To my memory cash transactions have happened 4 times. We have been asked about cash payment perhaps 7-8 times.
We cannot put anything other than small (<£500) amounts of cash in the bank, and even that is an absolutely enormous hassle with outrageous fees for us. The small amounts of cash we've taken went in the petty cash tin and AFAIK it's still there! No idea really, we rarely use it & I rarely check.
Occasionally we are offered cash in return for a 'deal', which I always decline. The business can't pay its bills in cash and I can't pay my mortgage in cash so it's literally of no use. The money-making opportunity of tax evasion just isn't worth it, not that I would anyway.
It's worth mentioning that in the UK the price displayed is the price you pay, it already includes all taxes. It's near universal from around age 12 that people pay with cards. Contactless up to £100 and chip & pin over £100.
I do sometimes feel sorry for the occasional really elderly customer who wants to pay by cheque. We have no practical facility to bank cheques and nor do most businesses. That ended long before covid.
Around 1% of UK adults don't have a payment card. In my narrow experience they are mainly the very elderly who can't get to grips with online banking. Cash is still readily available and widely accepted, especially by the larger chains & supermarkets.
In summary I don't think retail businesses in the UK should be required to accept cash, certainly not unless banks are required to provide a practical way of depositing cash with a reasonable fee.
Who do you bank with? Most UK bank apps allow cheque deposit via their phone app.
(With that said, fuck cheques)
In theory we can can but the fees are astronomic, it takes forever to clear, is limited to smaller sums. The two times I tried it was an utter nightmare because the bank couldn't read the writing of shaky old people.
Wait. You have to pay a fee for cash transactions? I find this astonishing. Is this some nation-wide incentive to get rid of cash in the economy?
It's more the realities of the efficiency of the internet compared to the cost of *handling cash.
Retail banking tends to have no fees but business banking has various fees depending on the provider.
My business pays mostly nothing at all for banking, unless I want to pay in cash, pay in cheques, or make international payments, none of which I've done for a few years.
The other key issue is there are almost no physical bank branches these days. If I wanted to go to a bank location to pay in cash I'd have to take about 2.5h out of my day. Screw that. I've not set foot in a bank for probably 6 years.
Edit: actually I have been in banks to pay in cash for a charity I help with. We put on events and take cash donations as that attracts additional government funding.
Right, so there is just this plague of disincentivization going on there. Really stark difference from Canada. Here, there are bank branches and ATMs everywhere. Certainly most people and day-to-day businesses transact with non-cash, but the option is usually there. In fact, many restaurants will offer a "discount" for cash payment (presumably for sales tax evasion), thereby actually incentivizing cash use.
(I'm going to assume you meant "handling", not "healing" cash)
That's interesting, do you think there's an element of central planning with regard to how much cash the powers that be want used?
I think, but could be wrong, that here it's simply a function of how widely adopted electronic payments and fintech has become because of convenience.
Thx, I've edited the typo. All hail autocorrect (and lack of proofreading).
I think, from articles I've seen, that Australians are among the lowest users of cash in the developed world. We have always tended to be early adopters of banking technology, starting with ATMs all the way through to tap-and-pay devices and digital wallets (our Treasury has issued plans to start phasing out cheques, given how little we use them these days). During the pandemic, our usage of cash plummeted as people were worried about coming into physical contact with anything that other people had touched, and that low usage has continued even after the pandemic has eased.
However, despite all this, I think that businesses should still be required to accept cash from those people who choose to use it. There are various reasons that some people can't or don't want to use digital payment options. Cash is still legal tender, and should therefore be able to be used to actually buy things.
Further to that, though, there are anti-money laundering laws in place, to require businesses to report cash payments above a certain value (I think it's $10,000, but I'm not sure). The intention of these laws is to prevent criminals from using their ill-gotten gains to make legitimate purchases. Those laws should absolutely stay.
What if you're buying a car? Taking out 10 grand wouldn't be that unusual.
If you're buying a car with 10 grand, then the car dealer would be legally required to report that transaction to a government agency: who you are, how much you spent, when you bought the car, and so on. It's not illegal to use large sums of cash, but it is reportable.
Law enforcement agencies can then use this information to identify people who are spending large amounts of untraceable cash, which can be another form of evidence while investigating crime.
Actually... looking at the legislation...
The reportable threshold is $10,000. I remembered correctly.
Only specific industries need to report large cash transactions: mainly financial service providers (including, but not limited to, banks) and gambling companies.
It looks like buying a car for $10,000 cash would not be required to be reported by law. [EDITED as per @Adys's correction below.]
I don't understand why, though. It would be a very effective way to launder ill-gotten gains! AusTrac knows this: "High-value goods" is one of the headings on their money-laundering webpage. I don't understand why a government hasn't legislated to make cash purchases of cars & other luxury goods reportable. (Although, there was an attempt to make these large cash transactions flat-out illegal, but that failed.)
Note that such a transaction is reportable, the one you highlighted is apparently just not mandatory to report. The “why” is likely lobbying from those industries to keep complexity down.
Also worth noting that any business may reject a transaction if they believe it to be fraudulent, @oxyacetalyne. Handing over 10k of cash, even if you are legally required to accept cash, is perfectly reasonably declined with the reason that it is a high risk transaction.
You're absolutely right, of course. Any transaction is reportable, in the sense that the receiver of the cash is able to report that to law enforcement agencies or AusTrac, if they desire to do so. A lolly-shop owner is even able to report a child who comes in and pays one dollar for a handful of lollies.
What I meant to say, and what I should have said, is that these transactions are mandatorily reportable by law. I apologise for the oversight. I'll be amending my comment to clarify this.
Sorry for the pedantry! I understood what you meant but it’s an important distinction I think. Some of people think they can throw large 9.5k rolls of bills around and they won’t end up being reported.
Ah, sounds fair enough :)
Even in the US that'd be unusual to come with that much or more cash for such a large purchase like a car. Checks - either personal or like a cashier's check - would be much more common in that case.
In the US, I think there are also reporting regulations for amounts $10k and higher with currency, at least in the context of depositing that money in a bank account. And it's the same reason: anti-money laundering. So in a private sale, whoever is accepting the cash would be able to deposit it, but then the bank and the depositor may have to do some paperwork. And they can't break it up into pieces to "fool" the bank and government. That's a crime in it's own right: structuring.
I predominantly use cash for purchases under 100 dollars. I find it way easier for me to overspend if I have my card on me, it doesn't feel like spending money to swipe a card as much as physically handing over cash. So I often don't even have my card on me. I've only ran into businesses that don't accept cash a small handful of times in my life, but it is a pain in the ass.
I feel like if it's only a small percentage of businesses not accepting a cash I don't have a problem, but I would be against it if most businesses stopped accepting cash. I don't like the idea of my every purchase being traceable, or if I lose my debit card I'm just SoL until I get a replacement.
It's funny because I'm the exact opposite -- when I have cash it doesn't feel real and I can spend it too easily without thinking. With card I can see the amount of money in front of me and it feels more real.
Unfortunately I live in Berlin which will probably be the last city on earth to go cashless. There are still so many businesses that only accept cash.
This is also a habit thing. If you used cash for all your spending, you'd probably feel different. I 100% am better about spending when I'm holding $1000 at the beginning of the month and only holding $100 at the end of the month (arbitrary numbers). You can literally feel the money getting lighter, and tactile senses are huge.
oh yeah that's valid, it's definitely an experience thing. I'm pretty young so I've had smartphones my whole adult life too, so seeing my card balance has always been very immediate in a way it wouldn't have been before that ig. I also have a dogshit memory and never remember what I spent my cash on lol
This is absolutely me- granted, I now live in a country where Cash is (barely, at this point) King. And it does two things- first, whenever I have to spend it does wake up the tactile sense (oh shit, I'm getting to the limit I set for myself), and second, it keeps me from over-spending... usually.
Putting everything on a card makes it waaaaaaay too easy to spend more than you should. If the rumors I've heard about impulse buying online- such as at Amazon- are true, then it makes sense why so many Americans have money problems: they're buying crap online that they could instead be saving money with (yes, I know I'm ignoring other pricey living costs here).
How does that work? I don't see a balance when I use my plastic card.
I get notifications on my phone when I use my main debit card, and with my other cards I can still open an app and have an itemized list of my transactions and current balance. As opposed to me looking at my wallet and being like "wtf where did that 50€ go?"
Every credit and debit card I have has a phone app that shows the current balance, including every pending transaction. Any time I make a purchase over a configurable threshold, I get a push notification (useful to catch unexpected charges or a stolen number). Transactions show up instantaneously.
Cash is just a big, vague hole in my financial overview, which I'd rather avoid. Plus, any transaction that doesn't go on a credit card is just wasting potential cashback rewards.
Are you referring to a cryptocurrency?
There are already plenty of protocols for transferring money electronically.
No, digital currencies don't have to be on the Blockchain.
Digital dollar/digital Euro are old ideas that come up from time to time. The idea is to have the state/government/central bank come up with a digital payment method.
The agreement usually goes along the lines of "digital payment is a utility essential to daily life of many citizens, and it should not be provided exclusively by a very small number is private enterprises, and access to it should never depend on details like e.g. whether a citizen is worthy of credit".
Honestly, I've kind of always thought that the direct nature of cryptocurrency was more of a bug than a feature. Sure, it has benefits, but it's also part of the biggest downsides - mainly how painfully slow they are.
Crypto's biggest failure was to underestimate the ingenuity of the systems that it were trying to replace. Sure, they're a confusing mess, but it's that way for a reason.
While most of the times I do use a credit card I don't ever want to not have option to use cash?
Why I'm using a card:
Also while I do use CC a lot I don't mind stores that are cash only. So I'm ok the other way.
Privatised ownership of Visa/Mastercard et al. is my primary concern. In the UK the Bank of England produces currency through the state owned Royal Mint and privatised De La Rue. The benefit to the economy of trustworthy currency is of course invaluable and while through taxes we pay for its manufacture, it is miniscule compared to the value it brings to the country.
When I pay for something with a £1 coin, I'm not paying a private company the privilege for doing so. Of course handling currency has its own costs and inefficiencies but that isn't money paid to an undeserving third party.
It is insanity that the UK and other nations have allowed Visa/Mastercard etc. to take hold such that a preponderance of transactions go through them and take a percentage each time. It would not matter if both those companies were British owned, any costs associated with purchases should go back to the state. This was understood and accepted with cash.
The unbelievably sensitive data that these companies collect cannot be overstated. I can accept that the state who I already submit my taxes to should hold this data, but private companies having it is an anathema to privacy.
If we want to move towards cashless societies for various reasons, then it should be the state who handles them and any transaction costs simply offset tax. Visa and mastercard have routinely abused their duopoly, seen with the £10 billion class action against mastercard. They have also regularly blocked transactions based upon US moral ideals and US government intervention.
I'll fully support a cashless society provided it is state owned and controlled, just as it is with cash. Not that I trust my Government, but I trust them more than foreign private companies who I can't vote out of office.
I don't think that businesses should be forced to accept cash. But I'm curious as to why they wouldn't want to? Accepting cash can save them on CC processing fees, especially when it comes to small transactions. Should businesses be forced to accept cards, for those of us who never/rarely carry cash? How about checks? I don't think they should. Just let businesses decide the method of payment they're willing to take based on what's best for them. Obviously, the fewer forms of payment they accept, the more likely they are to drive away a customer who wants to pay in a way that they don't accept (and that's their loss).
While I try to live cash only for a lot of things. I understand why they wouldn't want to.
The first is theft by employees, very hard to track unless you have camera's at a few different angles and the drama of he said/she said blame games when it comes up missing.
Then you must have a someone on staff to do cash drops at the bank wether that's after banking hours or first thing in the morning. This usually means paying overtime for said employee.
Truing/auditing each night/week and trying to figure out where a descrepancy is when your accounting/pos system reports is not matching up with what you counted. Especially frustrating when you accept multiple forms of payment and most POS systems leave a lot to be desired in the reporting department.
Cost of storage, you'll most likely need a safe and need to trust someone other then yourself with the combination. To not only keep the money you have on hand safe, but as a fall back if you can't make it to the bank. Good safes are not cheap, especially when you get to the auto dispensing and time locked safes.
Some people are nasty. How much cash are you willing to handle when someone pulls it out of their sock or bra after sweating all day.
Multiple registers and employee shift changes require to count the money between shifts and/or have another till with the correct amount ready to go for the next shift. Which requires someone to get all of it counted, sorted and ready to go in the morning.
Large bills, some people get angry when you can't or won't break a large bill. If you do break large bills, how many can you break that day before you run out of enough smaller change for normal customers.
Hardware, a lot of pos systems the cash drawers and printers still in service still talk via serial/parallel cables. They are getting harder to find but its either replace them or spend a lot more money replacing the entire systems to keep accepting cash or cheaper to go to a system that only accepts CC and does away with the drawer and printer most times as well.
One of my first jobs was working the office/cash register and produce at a super market. It gets old quick having to sort through all that cash, and then stressing when something does come up missing.
Later in life for a short time I installed POS systems, and using a checkbook register by hand is almost a better experience then some of the ones I seen especially on the restaurant side.
Another fun situation: you open up shop for the day, with a starting float of $100 in small bills in your till. Some cash-using person walks in and buys something that costs $5 with a $100 bill, one of a pile they got that morning by cashing their paycheck instead of depositing it.
Now one of the 1-2 open registers is stuck, with a line forming. You need to call a manager to make a withdrawal from the safe, which takes time, bring it over and stock the drawer in order to be able to complete the transaction.
Very interesting to know, thanks for the detailed explanation! I never realized how cash could be such a pain.
Agree, as long as the business is upfront about what forms of payment they'll accept prior to any service provided so the customer has the option to choose.
Cash has costs too. Time spent handling it, securing it, transferring it to a bank; potential theft, insurance rates due to theft, etc. may be factors in that decision. Depends on what makes sense for that business.
One friend told me his business stopped taking cash because it added a legal requirement to pay workers more for the hazard of carrying cash. Risk of robberies and such. The card transaction fees aren't as high as the costs associated with cash.
In Australia I'd estimate the primary use of cash is avoiding taxes. "Cash in hand job" being a common term for tax fraud.
Downsides, you say?
Nah, I was just joking, i'm more than happy to pay taxes for my healthcare, roads etc. That lottery system is cool!
No, they shouldn't be forced to accept cash. If they have a reason that cash management is proving to be something they no longer want to deal with - more power to them.
The customer is not entitled to anything and does not always get to choose their tender. I can't rent a car with cash, I can't pay debit at the local fair, and if a nearby boutique has decided that they're ditching cash - that's just life.
If a business wants to turn away cash-users. that should be within their rights. They may lose money, but that is their decision.
I disagree with the businesses right to refuse cash. Money is not inherently worth anything. After all its just paper and some metal discs. The real value is spending power. If a business refuses cash, then that value is 0 (at least locally). I agree that anything above and beyond accepting cash is thier perogative, but even places with thier own currency (Dave and Buster's power cards) accept cash upfront.
Also, you can absolutely rent a car with cash, you just need to also put down a deposit. Using a card is easier than leaving $1000+ dollars with Hertz as a deposit.
Maybe this is a Canadian thing, but cash is absolutely not an option for renting a car. They genuinely only accepted credit cards as payment when I rented one a few months ago.
Additionally, The demand for cash as tender is not even really enforceable with how prevalent ecommerce has become. Like, there's already tons of American businesses who you just don't have the option of throwing paper at and expecting product. Why should the fact that someone has a storefront mean they suddenly have to accept cash when other businesses already do not?
I guess, I would just try to imagine this if taken to the extreme.
What if a business only accepted Mastercard and not Visa? I guess a retailer would be OK, but what about a restaurant? You've already eaten, and now need to pay.
Now to the next level. What if a restaurant only takes bitcoin as payment? You've got cash AND Mastercard AND Visa and still can't pay.
I think there needs to be some kind of standard payment that will ALWAYS work. Other payments are 'nice-to-haves'.
At first, it doesn't seem like a big deal. If a retailer is credit only, then you can't get your YuGiOh cards expansion pack if you've got cash only. But what about something more critical? Buying medication at a pharmacy? Buying formula for a newborn...
So then, you have to say, "OK. We'll determine what constitutes a critical purchase, and all others are cash only." But that quickly becomes a judgement call, and a pain in the ass to enforce.
SO much easier to just say "Everyone take cash at a minimum. Anything above and beyond that is up to you."
Absolutely. Cash payments should be a baseline for commerce. Cash is tangible, anonymous, and a tried and true method of storing and exchanging value. If you don't accept cash, then you're telling me that I cannot do business with you unless I have a bank account or credit card. Cash requires no additional resources in order to transact (no internet connection, no electricity). There is 0 ambiguity about the situation. You don't have to worry about a card getting declined, you don't have to worry about someone stealing your info, as a merchant, you don't have to worry about chargebacks.
I don't like cash-only businesses, because sometimes, I'm not carrying any on me, but if I do have cash I expect to be able to spend it anywhere with no problems.
I really think cash should always be allowed. Some podcast (maybe a cortex) had a host put it in a way that really resonated with me, about keeping a 20 on you at all times. It was something along the lines of:
Cash will always work as a way to get goods or services. Your bank can have a technical glitch and make all your money be unusable for a time, or there can be a bs fraud issue that means your cards won’t work, or the POS can have a random glitch, or a million different things can happen between you tapping your card and it working. But with cash, you can always hand over a $5 (or $10) bill and get a coffee, or some food, or anything else you need. There’s nothing that can come in the way of that exchange, it always works.
there's a debate around this subject going around in the netherlands at the moment. it's funny to see the debate mirrors the viewpoints in this thread perfectly. from @norney's perspective (might i assume you live in a more urban area?) being the same as in the big cities here. to be fair, i got some cash a while ago and it was the first time in a year or so i had cash on me? it's bad enough i've heard jokes about people getting cash (tips or whatever) and saying "oh nice, i've got cash for my dealer again", because there's no other place you need to use cash (or realistically ever do).
the flipside here is mostly from either rural places or smaller towns, and the political parties pushing for cash needing to be accepted using the arguments @bengine does. or at least, the flawed side of it, without fixing the root causes.
personally i'm of the opinion banking needs to be made more private, that banks can't see your every transaction unless there's a warrant or some sort of procedure to ensure your privacy remains. realistically though, it's more like my usage of the internet: i'd love to only use FLOSS things, but even if i use my own email server i know there's still gmail on the other side, or i guess in this case i know there's still cameras or tracking in a million other ways so cash being private feels like a drop in the bucket
The very second this happens, every rich bastard launders all their money to the caymans.
on the one hand you're right, that's the downside, on the other hand, the panama papers (and the other one? forget its name?) have shown (1) that already happens and (2) nothing is done about it. i guess what i'm saying is i'd like to also do a tax fraud or something, if it made me rich.
Believe it or not a lot of people involved in fighting money laundering , I.e. those who work in compliance departments and in police units as well as regulators want to fight it. But there are sure problems.
communication and collaboration between police departments of different countries is poor, when I’ve asked contacts at the police about it, it seems to stem from systemic cultural issues inside departments as well as lack of resources. I often got told that e.g. the us responds to information requests usually after a year, so they deprioritize the requests the us makes so that they also have to wait. Then there’s funding, I’ve been told straight up that cases under a certain amount just aren’t looked at simply because they don’t have the manpower (and their investigative tools are crap and their IT policy abysmal, making it incredibly hard to go through data)
the whole finance industry can be summarized by cover your ass, it’s risk mitigation a.k.a. Game of hot potato all the way down. The regulators don’t want to regulate, so they try to put more responsibility onto the financial institutions. They don’t want to regulate as it costs them business, and money, and the compliance department is treated as just a cost center. I had lunch a few years back with a previous senior compliance officer from jp Morgan (she was head of compliance for a specific global region). She had quit (along with most other compliance people) after their work was ignored by head management. In the end, JP Morgan got fined shitloads for violating compliance regulations.
global compliance and AML regulations are born from “guidelines” defined by organizations like the FATF. This is a heavily politicized and lobbied organization. I’ve been at one of their annual meetings, even the compliance people from financial institutions who do want to curb money laundering are fed up with them and their guidelines. They’re used more to penalize developing countries and countries the west doesn’t like rather than try to actually enact sane policies that would do something to prevent money laundering
We're in a semi-rural but relatively wealthy area. I don't have the stats to hand but I believe most cash use in the UK happens in cities rather than in rural areas. High volume, low margin operations might be more favourable to cash and more likely to be located where there are more people, and there aren't many ATMs on farms!
Australian here. I used to be pretty passionate about this topic for privacy and rights reasons. But I struggle to care anymore. I don't even carry my wallet anymore, just phone and keys. Continuing to use cash purely to protect privacy is just too much of a burden and it seems most restaurants have stopped taking cash post covid.
I'm in a country where cash acceptance is mandatory and I appreciate that for privacy reasons.
However, I am all for getting rid of coins less than 10 cents (and setting prices to multiples of 10 cents accordingly). Paying with small coins at a human checkout just inconveniences literally everyone and vending machines tend to not accept them either, so they just end up wasting space in my wallet until I get rid of them at a self-checkout in one of the very few stores that have them here.
I usually tell people my small overlap with most conspiracy theorists is that I think cash is king. In saying that I use my card sometimes coz it's convenient. My point being why not have both? Choice is the spice of life.
I read Debt the first 5000 years and from what I remember we are kinda going back to the first form of currency with the whole cashless money thing. Physical coin was only needed to pay soldiers.* I found this interesting. I think people just need to be more adaptable to change and be accepting of these types of things.
*I'm not 100% sure on this as it was a long time ago I read the book and I'm also not a very smart man but the book is still very good.
No, I don't think so. I prefer cash (and privacy focused cryptocurrencies) for the privacy benefits, but I don't think other people should be forced to facilitate my preferences.
There's enough privacy violations already. I pay cash whenever possible since its practically untraceable. Kinda like a natural VPN for currency. I think cash will die out at some point, but I'll try pushing for it to last for as long as possible.
I see this debate often, and usually most comments are from the buyer side. I’m a small retailer and I accept both cash and credit. One thing about credit (and debit since it uses the same exchange) is that I’m charged a fee for every transaction and because I am a true small business, I can’t negotiate a great fee (mine is good, but not as good as what say Walmart pays). So I add that fee to my prices. All businesses do this, but small businesses can’t eat any cost. Large stores can get the better fees and not be as price sensitive to them because of the volume they do. But I’m also in a business where consumers are very price sensitive too, a $10 price difference can make or break a sale, so my habit is to charge a cash price, and then a credit price that is say 3% higher to cover the transaction fee. All small retailers face this conundrum and usually you’ll find that “mom & pops” with low volume/low margin products will prefer cash because as bad as you think cash controls may be to deal with, nothing is worse than seeing that processor fee fly out of your account at the end of the month or losing a sale over a very small amount.
There’s a sweet spot with cash deposits at the bank though. All banks charge for cash deposits over a certain monthly amount, so my business has checking accounts at two different banks so that if needed, I have a place to deposit cash without incurring a fee for doing so.
I get why large businesses that are high volume prefer credit, it likely works out cheaper for them (and less employee theft), but I bristle at all these random laws that really just hurt small businesses, especially when it something that is purely about legislating convenience.
As a buyer, I want cash to remain for privacy reasons. I remember the days after 9/11 when the US government started chasing after people for buying certain books and it just seems like that at some point, if I want the privacy, I don’t see why the government should legislate it away.
I would prefer to keep cash available for any smaller retail. We could eliminate penny, nickle, and dime and just round up to nearest 25 cent. I don't see a reason a car dealership or other places that only deal in large retail (specialize in only $1k+) products would need to accept cash.
If you eliminate cash then everyone would need to be responsible for having a way to accept transactions, that means everyone has to have cell service and cell phone to process a transaction at all times in all locations, anything less would be a detriment to the world and you would no longer be able to sell products second-hand.
I could give more reasons for privacy and security on why I support keeping cash, but if you can't understand the loss of secondhand transactions and recycling material over corporate convenience then those points won't really matter to you.
As a coinroll hunter in canada, I hope cash is king for many years to come, I'm expecially worried about them making the nickel go the way of the penny, as theres still some neat old nickels floating around in circulation
Not long ago I got 2 bundles of dimes, and in there was 4 rolls of silver dimes, thats an incredible find, they are worth about $370 and only costme $20
I'll be very sad when coins artaken away, but at least if it happens tomorrow, I'll have the memory of coin roll hunting for a whole year, and having great luck with it
I have over $400(face value) in change sitting in my dresser drawers that ive culled from circulation
I joke if someone breaks and enters my house looking for valuables they will be mega confused why I have hundreds of dollars in small change