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Cash is Almost King

Chicago is considering banning the cashless business model.

Recently, Chicago Alderman Ed Burke introduced an ordinance in October aimed at curbing the emerging trend of so-called “no-cash” policies at local retail and restaurant businesses. 

  • Restricting the ability to buy goods with cash is bad for business, according to proponents of the ordinance (O2017-7145), who claim that…

…while such policies allow businesses to “lessen staff training, security measures, and bookkeeping processes” they can be inherently discriminatory to those who are “low or fixed income, homeless, undocumented, young, or victims of identity theft.”

  • The sponsor is a former Chicago police officer who– at the age of 73 - with 48 years of service as a city Alderman – now controls the city’s purse strings and is responsible for all legislative matters pertaining to the city’s finances.
  • The ordinance says that by going cashless, local businesses would be forced to drive up prices to compensate for the increase in credit card transaction fees -- “a business cost typically passed on to consumers.”
  • Banning cash can be costly and discriminatory. ISRI has said this repeatedly over the years as localities have sought to restrict the use of cash in scrap transactions under the guise that it helps deter metals thieves.

Now, one might argue that it seems the “Dean of the Chicago City Council” may agree.

  • The ordinance is modeled on the principle outlined by a Massachusetts state law from 1978:

"[n]o retail establishment offering goods and services for sale shall discriminate against a cash buyer by requiring the use of credit by a buyer in order to purchase such goods and services; and

retail establishments must accept legal tender when offered as payment by the buyer."

Why it’s important:
Perhaps there is something to this line of thinking that scrap dealers can use in the fight to maintain the right to pay customers in cash.

  • While courts have deemed that the ability to purchase and the ability to pay should be viewed differently (a position ISRI strongly argued against (in at least) two court proceedings)…

it seems that there remains a contingent of policymakers who still believe cash is king, or at least a preferred method of business that should not be restricted.

Interestingly, both Massachusetts and Illinois are among the few states left with minimal payment restrictions on scrap transactions.

What’s Next?

The ordinance was introduced at the Chicago City Council's October 11 meeting and was referred to the Committee on License and Consumer Protection where it sits awaiting action.

Contact: Danielle Waterfield, (202) 662-8516.

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