June 27, 2023
The King County Council on Tuesday voted 5-4 to approve legislation to require retail businesses in unincorporated King County to accept cash. The measure, brought by Councilmember Jeanne Kohl-Welles, is meant to ensure everyone has access to the economy, including people who cannot or choose not to access bank accounts, credit cards, and other financial tools.
“This legislation has been an important and sometimes challenging balancing act – trying to protect consumer access, support local businesses, and adapt to a changing world all at the same time,” Kohl-Welles said. “I am very pleased that the legislation as passed addresses this emerging equity issue in a way that is creative, proactive, and collaborative. Further, it signals that as technology continues to rapidly change as we appear to be moving to a cashless society, there is a place for everybody in our local economy.”
During and even before the COVID-19 pandemic, many businesses in the Seattle area and beyond began shifting to cashless operations, leaving people who rely on cash with fewer options to purchase food and other essential consumer goods. Research, however, shows that cashless businesses most impact communities of color, seniors, people with disabilities, immigrants, refugees, kids, the houseless, and low-income communities.
At least 2.1% of Washington residents are unbanked, meaning they don’t have bank accounts, credit cards or other typical financial services, according to the 2021 FDIC Household Survey. Five-year estimates put that number even higher – at 3.1%. More than 17% of residents are underbanked, meaning they might have a bank account but often rely on alternative financial services, such as money orders, check-cashing services, and payday loans.
If applied to unincorporated King County, these figures mean more than 7,000 people could be unbanked and more than 42,000 people could be underbanked.
The ordinance requires that retail businesses in unincorporated King County accept cash, unless exempted, for most in-person retail food and consumer goods transactions, and to not charge higher prices than for another form of payment. The requirement would not apply to a number of situations, such as transactions by mail, phone or over the internet; those when an employee is not present, such as at a kiosk; for transactions in which a deposit is required or for over $200 in a single transaction; or to businesses providing a device to convert cash to a prepaid card. The Executive branch will be required to analyze enforcement and implementation mechanisms and make a recommendation to the Council on an enforcement mechanism and any other implementation measures by December 1, 2024. The law will take effect on July 1, 2025.
To acknowledge safety concerns raised during the committee hearings, retailers will be able to apply to the Hearing Examiner for an exemption from the requirement to accept cash based on the unique hardships a retailer faces, including but not limited to history of theft, distance to a banking institution, home-based businesses, and businesses with only one employee on site at a time.
It’s unclear how many businesses in unincorporated King County have gone cashless, but Kohl-Welles intends the legislation to serve as a proactive tool to protect consumer access as this trend continues.
Of those who still use cash for most purchases, the largest shares are people of color and those with the lowest incomes, according to data from the Pew Research Center.
The legislation garnered a wide range of community support, including endorsements from the ACLU; ARC of King County; Asian Counseling and Referral Services; Banchero Disability Partners; Be: Seattle; CAIR-WA; Chief Seattle Club; El Centro de la Raza; Faith Action Network; Indian American Community Services; King County Sexual Assault Resource Center; League of Women Voters; Low Income Housing Institute; MAPS-AMEN (American Muslim Empowerment Network); Northwest Immigrant Rights Project; Puget Sound Advocates for Retirement Action; Purpose, Dignity, Action (Public Defenders Association); Rainier Beach Action Coalition; Real Change; Seattle/King County Coalition on Homelessness; Solid Ground; Transit Riders Union; UFCW 3000; and the White Center Community Development Association.
Legislation to address this issue has already been passed in New York City, Philadelphia, San Francisco, Washington D.C., and the states of Colorado, Massachusetts, and New Jersey. At the federal level, the bipartisan Payment Choice Act was passed out of the U.S. House of Representatives last year and has not yet been acted upon by the Senate. In addition to this Act, a similar Senate bill has also garnered bipartisan sponsorship.
“[Our vendors] ask you to allow [those] in unincorporated King County to buy a cup of coffee,” said Tiffani McCoy, Advocacy Director at Real Change. “To buy a bagel. To buy lunch. To buy diapers. To purchase whatever it is that they need.”
In response to the final action on the legislation, which included the addition of several amendments, Kohl-Welles said, “To produce meaningful change, compromise is often necessary, and contrary to the popular maxim, the perfect is not the enemy of the good. Even so, as amended, this legislation will promote the equity that our county holds to be its true north, helping real people, many of whom are too often overlooked, to live and engage in commerce in a way that works for them.”