The 1.5 cents per ounce beverage tax was tough enough for most food retailers in Philadelphia to absorb. Now the city has added to its reputation as arguably the most anti-business municipality in the nation when Mayor Jim Kenney signed into law an ordinance that would ban cashless stores. Philadelphia thus becomes the first U.S. city to enact such legislation.
While there are a few businesses exempted, the ordinance will not prohibit most retail locations from refusing to take cash or charging cash-paying customers a higher price. The law will take effect on July 1 and violators would face fines of as much as $2,000.
Many observers see the law as being distinctly anti-Amazon, which has stated it would look to Philadelphia as one of the cities in which it would potentially open Amazon Go stores. Amazon Go stores debuted last year and its current lineup of 10 stores are based in Seattle, San Francisco and Chicago with the promise of hundreds more to come in other large cities.
Mayor Kenney and his advocates said the new law said was needed to protect low-income shoppers without bank accounts from discrimination.
“With a 26-percent poverty rate in Philadelphia, the mayor believes in equal opportunity for all,” city spokesman Mike Dunn said in a statement. “Until we can resolve the hurdles facing the unbanked, we need to remove any obstacles that could prevent them from enjoying all amenities of this city, amenities that are readily available to those fortunate enough to have a debit or credit card.”
According to the Federal Deposit Insurance Corporation (FDIC), almost 6 percent of residents in the Philadelphia area do not have access to credit or bank accounts in 2017 and roughly 22 percent were considered “underbanked,” according to the federal agency.
“This decision comes despite our continued concerns about how this legislation might impact innovation in our retail sector. We will continue to monitor this, as we face the ongoing challenge of growing our economy while ensuring that growth is inclusive, spokesman Dunn stated.
Some businesses are exempt from the law including BJ’s Wholesale Club, which operates two stores in the city. Also exempt are garages/parking lots, rental companies and retailers that accept mobile payments through membership clubs.
In neighboring New Jersey, legislators recently approved a similar bill banning cashless stores. That bill now sits on Governor Phil Murphy’s desk for approval or veto. Other municipalities where legislation has been introduced (but no action has been decided to date) include New York City, San Francisco, Chicago and Washington, D.C.