NJ Legislators Pass Bill To Ban Cashless Stores

New Jersey is one step closer to making it illegal to run a cashless store in the state.

With overwhelming support, state legislators passed a bill that will ban cashless stores. If Gov. Phil Murphy signs it into law, New Jersey will become the second U.S. state to prevent businesses from not accepting cash payments from consumers.

The bill applies only to point-of-sale purchases and excludes mail, telephone and internet sales, as well as car rental companies. The proposed law states that violators would be subject to a civil fine of up to $2,500 for the first offense and $5,000 for the second. Additional violations would be unlawful practices under the state’s Consumer Fraud Act.

“Many people do not have access to consumer credit, and any effort by retail establishments to ban the use of cash would be discriminatory towards those people,” said Rep. Paul D. Moriarty, D-Camden/Gloucester and one of the bill’s main sponsors, according to Chain Store Age. “The U.S. dollar is legal tender and should be accepted at any retail establishment in New Jersey.”

So far, Massachusetts is the only state to make cashless stores illegal. New York City and Philadelphia are also reportedly considering similar bans.

The eCommerce giant Amazon, which operates a cashless Amazon Books store at Garden State Plaza in Paramus, N.J., has spoken out against the legislation. The decision to go cashless hasn’t been easy for many businesses. Earlier this year, Danny Meyer defended his restaurant group’s decision to test cashless transactions. He explained that the company isn’t trying to exclude prospective customers, but decided to make five of its locations cashless for safety reasons, as well as to increase efficiency.

“We know that some have raised concerns about the socioeconomic implications of operating a cashless business,” Meyer said in a blog post. “By not accepting cash, a restaurant may be excluding prospective guests who do not have a bank account. And we might be inconveniencing guests who simply don’t have their credit/debit on them at the time. That’s certainly not our aim.”

Another eatery, Hill Country in Washington D.C., also decided to stop accepting cash in August after it was repeatedly robbed.

“Managing cash and handling cash is time-consuming and cumbersome. We would rather see [our staff] focusing on serving our guests,” said Marc Glosserman, founder and CEO of Hill Country.