SEATTLE — Retail shops and restaurants in unincorporated King County will be required to accept cash after a divided Metropolitan King County Council voted narrowly for the change Tuesday.
It is, on its face, an odd mandate to come from a government body — You must take this cash! — but it’s one that, supporters argue, has become necessary as more and more businesses choose to accept credit and debit cards only, excluding those who may not have access to a bank account.
“For folks who need every dollar to go toward food and essentials, rather than fees, cashless business practices act as a barrier to them accessing those needs,” said Councilmember Jeanne Kohl-Welles, the lead sponsor.
“We want to make sure that everyone can participate in our economy,” Councilmember Girmay Zahilay added.
Opponents argued that businesses do not shun cash lightly, and that those that do often have legitimate safety concerns about holding large amounts of cash.
“It’s not because they don’t want the business, there’s another underlying reason, and public safety is at the root of it,” said Steve Hooper, president of the Seattle Restaurant Alliance.
The ordinance passed 5-4, with opponents arguing they were unsure the scale of the actual problem.
“I would prefer that we take some time, inquire into who is unbanked, why, where and what the solutions to that could be,” Councilmember Claudia Balducci said.
The meeting turned uncharacteristically combative after Kohl-Welles gave a lengthy closing argument.
“A lot of things were just said that were unfair and untrue,” Balducci responded.
“I would like to hear what is unfair and untrue,” Kohl-Welles said.
“I’m done, that’s all I have to say,” Balducci said.
The change would apply only in unincorporated King County and only to in-person transactions.
Businesses would only be required to accept cash for purchases up to $200 and would not have to accept denominations higher than $20. Businesses could apply for an exemption to the mandate, which would be considered on a case-by-case basis.
The legislation asks the county executive to analyze the best way to enforce the new mandate and report back. It does not go into effect until July 1, 2025.
“Cash rules everything around me,” Wu-Tang Clan famously said, but more and more frequently it just isn’t so.
In 2015, according to a Pew study, about one-quarter of Americans said they didn’t use cash for any purchases in a typical week. Last year, that number rose to 41%.
On March 1, 2020, 8% of American businesses served by the payment platform Square were effectively cashless. Less than two months later, after the onset of the COVID-19 pandemic and efforts to limit physical contact, 31% of the businesses Square served had become cashless.
It’s a feedback loop — more customers using digital payments leads to more stores accepting only digital payments, which leads to customers having no option besides digital payments.
Yet, according to the Pew study, a substantial minority, 14%, of Americans still use cash for all or almost all of their purchases.
A 2021 Federal Deposit Insurance Corp. study found that about 5% of households have no checking or savings account. But Black households were about five times more likely to be without a bank account than white households, and Hispanic households were about four times more likely.
“A cashless society presumes a level of financial stability that many people just don’t have,” said Lev Elson-Schwab, advocacy chair of the League of Women Voters of Seattle-King County.
Advocates argued that cashless businesses can hurt those younger than 18, who can’t get a bank account without a parent, and older adults, who can have difficulty with technology and be more vulnerable to digital frauds and scams.
Massachusetts and New Jersey, as well as the cities of New York, San Francisco, Philadelphia and Washington, D.C., all have laws requiring retailers to accept cash.
Businesses of all sizes, from the smallest sidewalk vendor to the largest venues in the region, shun cash.
At Climate Pledge Arena, you can’t use cash anywhere, and the arena charges a 3% transaction fee for every swipe, tap or insertion of a card at club concession stands. At least seven stores and concession areas in the arena allow you to pay just by waving your palm and letting Amazon’s technologists handle the rest. Transaction fees are waived at those stands.
You can’t pay with cash at Lumen Field or T-Mobile Park either. Or even at concerts at Marymoor Park, which is owned by King County.
For businesses, there are obvious benefits to shunning cash. Collecting it and making change can be time-consuming, a hassle. It presents security issues. It needs to be deposited at the end of the day or week.
Psychological research also shows that people spend more when they spend with a credit card.
“Credit cards facilitate purchasing behavior,” a 2021 MIT study found. The authors found that credit cards stimulated the reward networks in the brain, where cash purchases did not.
The study’s author warned policymakers about “making it even easier and more pleasant to make purchases with our smart phones.”
Councilmembers Kohl-Welles, Zahilay, Rod Dembowski, Dave Upthegrove and Pete von Reichbauer supported the ordinance. Councilmembers Balducci, Reagan Dunn, Sarah Perry and Joe McDermott voted no, with McDermott initially voting yes, but changing his vote after it was clear the measure would pass.
