New Jersey has passed a law banning cashless stores and restaurants, according to reports.
The bill was signed by Gov. Phil Murphy and it requires stores and eateries to accept cash at their physical locations or face penalties. New Jersey is the second state to outlaw cashless stores after Massachusetts, which signed a similar bill into law back in 1978.
Philadelphia recently became the first major city to pass a ban on cashless shops; New York, San Francisco, Chicago and Washington are reportedly considering passing similar legislation.
Violators of the New Jersey law will have to pay a fine of up to $2,500 for a first violation and $5,000 for a second. Violations after that would be subject to the New Jersey Consumer Fraud Act and fines could be as high as $20,000.
The law only applies to in-person sales and there are some exclusions: car rental companies, parking garages and some airport shops.
Advocates of bans on cashless businesses say they discriminate against lower-income people who might not have access to credit cards or bank accounts.
“Many people don’t have access to consumer credit and any effort by retail establishments to ban the use of cash is discriminatory towards those people,” New Jersey Assemblyman Paul Moriarty said.
The Philadelphia law takes effect in July and will also require most retail outlets to accept physical currency.
The move could affect innovation for companies like Amazon and its cashless “Go” stores, which link to an Amazon account through a mobile device and automatically charges for purchases.
The politician who introduced the bill, Philadelphia City Councilman William Greenlee, mirrored Moriarty’s view and said the general move toward a cashless city is discriminatory toward lower income individuals and other marginalized populations.
“Most of the people who don’t have credit tend to be lower income, minority, immigrants. It just seemed to me, if not intentional, at least a form of discrimination,” he said. Now stores will be required “to do what businesses have been doing since Ben Franklin was walking the streets of Philadelphia,” he said.