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Philadelphia delays ban on cashless stores until October

The city’s Commission on Human Relation voted Friday to delay implementation so “the public and the retail community can better understand the ordinance’s requirements."

Philadelphia City Hall, photographed in November, 2018.
Philadelphia City Hall, photographed in November, 2018.Read moreMichael Bryant / File Photograph

Days before Philadelphia was set to implement its historic law banning cashless stores, the city said Thursday that it would delay the ban until October.

The city’s Commission on Human Relations, which is drafting regulations for the new law, voted June 21 to push back implementation so “the public and the retail community can better understand the ordinance’s requirements," said Lauren Cox, a city spokesperson.

The law was set to take effect July 1 but will now be implemented Oct. 1, Cox said.

“The commission is close to finalizing those regulations and will put them out for public comment as soon as possible,” Cox said. “The city and [commission] believe a short delay to implement the law will benefit all parties, to avoid any confusion or uncertainty in compliance.”

In February, Mayor Jim Kenney signed off on the law that prohibits most retail locations from refusing to take cash or charging cash-paying customers a higher price. Violators can face fines of up to $2,000 per violation.

The law made Philadelphia the first major U.S. city to ban cashless stores.

Proponents of the new ban argue that cashless stores effectively discriminate against poor consumers who do not have access to credit or bank accounts. Nearly 6 percent of residents in the Philadelphia region were unbanked -- they had no bank accounts -- in 2017, and roughly 22 percent were considered “underbanked,” -- they have an account but still use check cashers and other alternative products -- according to the Federal Deposit Insurance Corporation.

The delay comes as state government offices used by tens of thousands of city residents say they won’t accept cash as payment. The law also carves out some businesses, such as wholesale clubs and parking lots and garages.

Cox said the Human Relations Commission has met with stakeholders that would be affected by the law and received questions from the public, retailers, and city departments.

Cox said that as far as she’s aware, e-commerce giant Amazon is not one of the entities that’s weighed in. Amazon had lobbied to try to carve itself out of the cash requirement, but it announced in April that its cashierless “Go” stores would accept cash.

As technology gives consumers more ways to pay, including with their smart phones, some stores have gone cashless to improve efficiency, reduce the risk of robbery, and avoid the hassle of handling cash.

Americans are less reliant on paper bills and coins, according to a Pew Research Center survey released in December. The survey of 10,683 U.S. adults found that 29 percent said they made no purchases using cash during a typical week, up from 24 percent in 2015. Likewise, those who made all or almost all of their weekly purchases with cash dropped from 24 percent in 2015 to 18 percent today, according to the survey.

Following Philadelphia, New Jersey and San Francisco passed similar laws banning cashless stores. New Jersey’s ban is already implemented.

Massachusetts was the first state to pass a law requiring retailers to accept cash, in 1978.