Should I be concerned when I see "No Cash Accepted?"

This article relates to the topic of whether or not we are about to become a cashless society.

Not long ago, I gave a talk to my civic club about the idea of the United States becoming a “Cashless Society.” My presentation was similar to what I presented in this video and on this blog post. One of the audience members asked me a question that I have often thought about myself: “How is it that a business can refuse to accept government-sanctioned currency?” In my mind, this is a fair question. After all, our currency contains the words This note is legal tender for all debts, public and private on it. Since the government creates it, sanctions it, and guarantees it—is a business legally allowed to refuse it? The unspoken assumption behind the question is that this situation provides further proof that our country is eliminating cash and will be fully cashless before we know it.

Do I agree with this assumption? Is it further proof that we’re about to say goodbye to cash? I’m glad you asked!

First, the legal part. Surprisingly, there is no US law that requires a private business to accept cash or coin. I was honestly surprised by this revelation. I figured there must be a federal law about businesses needing to accept cash, but there isn’t. However, there are some states(such as RI, NJ, MA) that require cash to be accepted. During our unforgettable year 2020, there were false claims going around on social media suggesting that if a business refused to accept cash, then your debt is cleared. Thankfully, I don’t think you’ll find many of those posts anymore. This gained steam due to the overall cash shortage in the US, plus fear over touching money that may be infected. So, the answer to the gentleman’s question above is, “They aren’t required by law to accept cash.”

Second, the practical part. For this section, you could ask the question, “Why would a business refuse to accept cash?” That is the question I will answer in the rest of this post.

The most common place I see a “No Cash Accepted” sign is at an entertainment venue, like a sports arena. I’ve never seen such a sign at a restaurant or retail store. For an entertainment venue, it makes a lot of sense to go cashless. There are several reasons for this.

For starters, it adds an incredible amount of logistics, special expertise, and expense to accept cash at a venue. If there are 30 different concession stands accepting cash, then each register at all 30 locations needs to continuously be counted and balanced. That takes a LOT of time. Whether one person goes to each location and counts, or whether there is a designated person at each stand makes little difference—that’s a lot of time counting. I know what the margin of error is for 3-6 teller windows at a bank. I can’t imagine having 60+ registers to count and the amount of error that is likely to happen. There could be several hundred to several thousands of dollars missing per event based on the foot traffic. The owner also needs to pay for an armed vault service. That means there is a third-party service that collects all the cash and delivers it to the bank or designated location each day. For a small business, one person usually counts the money and delivers deposits to the bank. For a large venue, it requires an armed vault service due to the complexity involved. Those services cost money. The cost increases for each register that is manned each day. Ever wonder why a bottle of water costs $6 when you can buy 48 for the same price at a grocery store? This is one reason why. Granted, the price probably didn’t drop once a venue stopped using cash, but that’s another story.

You also run an increased risk of theft if you take cash. This can come from inside or outside your store. In any business, it isn’t just the criminals off the street who come in and steal—it’s your employees too!

Speaking of employees, have you thought about the internal procedures necessary to train people to keep up with their own cash register? You usually need two people to: retrieve your box, balance your box at the end of the day, and return your box to the vault. If both people count the money and come up with two different totals, then a third person is usually needed. If your concession stand has 5 registers being used, that’s a lot of moving around just to count the cash. Have you also considered how difficult it can be to count cash for today’s youngest workers? I don’t mean to sound harsh here, but let’s be honest—employees under age 25 probably aren’t used to handling much cash anyway. It will take a while to train all of them to be proficient at counting cash. Plus, the turnover is probably high, meaning you’ll need to constantly train people to count. I know it sounds like a very simple procedure, but there’s a lot more to it than just grabbing a handful of money and counting it. The margin for error is high for each register. Multiply that by the number of registers your business runs and you get the idea. Going cashless would eliminate ALL this hassle for the business.

So, imagine you’re a business owner, and you are fully aware of what I just talked about. You have the option of saving hundreds or even thousands of dollars each week by eliminating cash. You have less training time, travel time, counting time, etc. for your managers. You have less chance that employees will steal from you. You already know most customers have credit or debit cards and use them. You shouldn’t have more than a handful of people get upset about not taking cash. Once you weigh the cost/benefit analysis of eliminating cash, you determine you’re still better off going cashless. You also determine that it is a logical business decision. What do you do, business owner?

Outside of entertainment venues, I’m not aware of businesses not accepting cash. I heard a year or two ago that one national restaurant chain decided to go cashless, but couldn’t find any proof of it when I went looking. Even if you see a “No cash accepted” sign somewhere, you should realize there is a 99% chance it is the result of a practical business decision, not a government conspiracy. If you don’t like seeing those signs, the place to start is letting that business know how you feel, and then let your state representatives know about it. As I stated earlier, any law regarding businesses accepting cash is going to come at the state level, not the federal level.

I still am firmly grounded in the belief that we are not becoming a cashless society. You can throw whatever you want to at me(bitcoin, the Fed, conspiracies, etc.) and I still don’t buy it. Why? Because I’m at ground zero for cash distribution(the banking system) and I find no evidence to support we are going away from it.

"if more people valued home above cash, this world would be a merrier place" - Théoden