On March 18, New Jersey governor Phil Murphy signed a bill that prohibits discrimination against cash-paying retail customers.  The new law bans retailers who sell goods or services from requiring buyers to use a credit card or prohibiting the use of cash as payment for the goods or services.  The new law takes effect immediately.

The new law does not apply to: (1) telephone, mail, and internet transactions; (2) a person selling goods or services at an airport, as long as at least two persons who sell food at each terminal within the airport accept cash; (3) any parking facility owned by a municipality; (4) any parking facility that accepts mobile payment, as long as the facility does not accept payment by any means other than mobile payment; and (5) any company engaged in the business of renting motor vehicles, as long as the company accepts a cashier’s check or a certified check when offered as payment.

An argument in support of banning cashless retailers is that there are many low income consumers who do not have access to bank accounts or credit cards.  Banning consumers from using cash or requiring consumers to use a credit card has a discriminatory effect on people who do not have access to bank accounts and credit cards.  Conversely, an argument against banning cashless retailers is inevitable modernization: digital payments are the future and are generally better for business.

The question remains whether other states or cities will pass similar prohibitions on cashless retailers.  On February 27, Philadelphia mayor Jim Kenney signed a bill that prohibits retailers from refusing to accept cash, posting signs on the retailer’s premises that cash is not accepted, and charging a higher price to customers who pay with cash rather than any other form of payment.  Philadelphia’s new law is scheduled to take effect July 1, 2019.  Currently, the New York City Council is contemplating a similar ban on cashless stores.  The extent to which the rest of the country will follow suit remains to be seen.