By Anne Wallace Allen
Several Vermont lawmakers have signed on to a House bill that would require retailers to accept cash as payment, saying Vermonters who cannot or chose not to pay with plastic could otherwise lose their purchasing power.
“Not everyone has the abundance to be making credit card payments," said Rep. Emma Mulvaney-Stanak (P/D-Burlington), a cosponsor of H.527, which would require that cash be accepted as payment for goods and services.
Mulvaney-Stanak, a member of the House Committee on Commerce and Economic Development, told the panel on Tuesday that making sure shoppers can use cash is a matter of racial and economic justice. People who are undocumented, for example, can't open bank accounts because they lack a Social Security number, she said. Others with very low incomes can't afford the fees associated with cards.
"The interest fees charged on credit cards are astronomically high and very predatory," she said.
Cosponsor Rep. Kari Dolan (D-Waitsfield) told the committee on Tuesday that a constituent had asked her to introduce the measure. She said fears of disease transmission during the pandemic had prompted a move away from the use of cash.
“Now cash is disappearing as an over-the-counter form of payment,” Dolan said.
It’s not clear how many businesses refuse to take cash. While several members of the committee said on Tuesday that they had heard anecdotes about cash-only requirements, including at food trucks, none of the cosponsors could name a business they were certain has a card-only policy.
Committee chair Rep. Mike Marcotte (R-Coventry), who has owned and operated a convenience store and gas station in Newport for more than 40 years, said after the hearing that he encourages customers to use cash. Those who use cards, he said, must pay the card companies’ 3.5 percent markup.
“I know there are other small retailers like me in the area that have done the same thing, because those fees are crippling,” Marcotte said.
It’s clear that policy makers around the U.S. feel a need to protect the use of cash. As checkout systems for credit and debit cards have become more sophisticated in recent years, several cities, counties and a few states — including Massachusetts and Connecticut — have passed measures requiring businesses to take cash. In the absence of state laws, private businesses are not required by law to do so otherwise, according to the Federal Reserve.
Cash Matters, a nonprofit group that is backed by the ATM industry and other organizations, has taken up the mantle of protecting cash, saying it keeps the marketplace more democratic and doesn't open up customers to the risk of identity fraud.
“Cash isn't just currency, it's common sense! It teaches financial basics, helps with budgeting, and the pain of parting with it discourages frivolous purchases,” the group says on its Facebook page.
On Tuesday, some committee members recounted their own experiences with constituents who don’t have access to credit or debit cards. Rep. Jim Carroll (D-Bennington) said he had worked with a family of Afghan refugees who weren’t allowed to open bank accounts until they had permanent resident visas, which can take a year or longer to obtain.
“They were dependent on cash; even with cashing a paycheck we had to jump through some hoops,” Carroll said. “Fundamentally the only form they can conduct business with is cash.”
Mulvaney-Stanak is a candidate in the Burlington mayoral race. She said if the bill isn't taken up in the Statehouse, she'll explore the matter further if she's elected in March to lead Vermont's largest city.
"People have called this payment gentrification," she said. "This is a way to protect the economic diversity of Burlington."
Marcotte said he’s open to taking testimony on the issue later in the session if committee members and cosponsors show him data indicating there's a problem. Erin Sigrist, president of Vermont Retail & Grocers Association, said on Tuesday that she plans to survey its members to see whether any of them refuse to accept cash.
Like others, Sigrist said she can understand that there might be rising concerns about keeping cash on hand due to a recent increase in crime.
“But I need to survey my members to understand if there is an actual issue or if this is a solution in search of a problem,” Sigrist said. “I would be incredibly surprised if there was any type of impactful number of retailers who are refusing to take cash.”
A similar bill, S.175, was introduced in the Senate this month by Sen. Andy Perchlik (D/P-Washington).