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Philadelphia Bans Cashless Stores

What does it mean for frictionless checkout?
Photograph: Shutterstock

PHILADELPHIA — Philadelphia is the first major city to ban cashless stores, and the move is making at least one frictionless checkout concept nervous. The ban goes into effect in July.

Amazon has not formally announced any plans to open any Amazon Go stores in Philadelphia, but the The Wall Street Journal reports that Amazon “expressed concern” about how passage of the no-cashless bill would affect the company’s ability to open stores in the city.

There are caveats to the legislation. The cash requirement does not apply to parking garages or lots, wholesale clubs such as Costco or rental-car companies or hotels where credit cards are required. The bill was introduced by Philadelphia City Councilman William Greenlee, whose office also included an exemption for “transactions at retail stores selling consumer goods exclusively through a membership model that requires payment by means of an affiliated mobile device application.”

The exemption was put in place to allow the Amazon Go model to continue, but the Journal states that a Prime membership is not required to shop there, so Amazon will not be able to take advantage of the provision.

The measure banning cashless stores has met opposition from a number of national and local groups, including the National Retail Federation, the Chamber of Commerce for Greater Philadelphia and the Pennsylvania Restaurant and Lodging Association.

Technically, there are ways consumers can load cash directly onto their Amazon account through the Amazon Cash program. Consumers can print a personalized barcode or download it onto their smartphone from Amazon.com. They then bring the barcode to a cashier at a participating retail location, which includes 7-Eleven, Speedway, Sheetz, Kum & Go and other retailers. Once there, consumers give the cashier anywhere between $15 and $500 in cash and the cashier loads the cash onto the consumer’s Amazon account in a single transaction with no fees charged.

However, doing so requires an internet connection, something an unbanked consumer may not be able to access easily. Even if they do have an internet connection, shopping at Amazon Go also requires a smartphone, another tech amenity an unbanked consumer might not be able to access.

“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,” said Greenlee.

Some frictionless retailers, including Standard Cognition, have plans to include a pay-with-cash option in stores. “Payment flexibility is also important. A viable solution must accept cash, credit and other popular payment methods. I haven’t met a retailer yet who have said their stores plan on abandoning cash,” said Michael Suswal, co-founder and COO of San Francisco-based Standard Cognition, in a blog post.

Meanwhile, other cities and states are preparing to follow Philadelphia’s lead in banning cashless retail. New York City’s city council is considering similar legislation, and New Jersey’s legislature passed a bill banning cashless stores, though it is unclear whether Gov. Phil Murphy will sign the bill.

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