Legal tender would actually be legal tender under S.175

No credit card? No problem, under Vermont Senate bill requiring accepting cash payments

The number of Vermonters without bank accounts has climbed in recent years, from 0.7 percent of households in 2019 to 2.5 percent in 2021, according to the Federal Deposit Insurance Corp. A Senate bill would look to protect the consumer power of those households by requiring businesses to accept cash for transactions under $1,000.

S.175 was introduced by Sen. Andrew Perchlik, D/P-Washington, in a Feb. 22 Senate economic development committee meeting. Perchlik said constituents approached him about such a bill after they were turned away from a business because they only had cash, and soon he realized many groups in the state could often be in the same situation. 

“There was concern about refugee populations,” he said in an interview. “At first I was like, ‘How many people don’t have credit cards?’ It seems like it’s pretty prevalent, electronic pay of some sort. And then I found out there really are people getting out of prison or people that are immigrants or people that have had problems with credit cards that purposely don’t have them so that they don’t get into debt. And so it was more common than I thought.” 

Perchlik said he also heard from an employee at a ski resort that went cashless who noticed customers were surprised they needed credit cards to purchase not only lift tickets and equipment but also food and beverages. 

“The person in the ski area thought it was something that businesses did on purpose, and it was becoming more common as a way to get people to spend more money because, according to this person, people are more likely to spend money when they don’t have to see the cash or hand it over,” Perchlik said in the interview. “Or if a parent is giving money to a kid for lunch, they can say, ‘Here’s $20 — you have to spend within $20.’ Now it’s, ‘Here’s a credit card.’” 

Similar legislation requiring businesses to accept cash has been enacted in Connecticut, Colorado, New Jersey and Massachusetts, as well as by local governments in New York City and Philadelphia.

In a Feb. 28 committee meeting, one senator expressed concerns over the safety of businesses carrying large amounts of cash, especially those open late at night. 

“If you have an employee in an isolated location, or alone at night in a convenience store and it’s held up, it’s difficult to get employees after that,” said Sen. Ann Cummings, D-Washington, adding later, “It’s nice until we can’t get anybody to man the transfer station or the convenience store at night.”

At the same meeting, Sen. Randy Brock, R-Franklin, questioned the need for the bill at all. 

“The merchant can decide,” Brock said. “And if you don’t like the merchant’s policy, you’ll go elsewhere. But you can always change the merchant. If the merchant is losing business, they’re not going to do business that way.” 

Jay Greene, a policy analyst from the Vermont Office of Racial Equity, testified in support of the bill and its potential for protecting the consumer power of marginalized people in Vermont.

“Protecting the right to pay cash is one of the office’s top policy priorities for this legislative session,” Greene said in the Feb. 28 meeting. 

“There are a significant number of Vermonters who are unbanked,” Greene added later. “There are likely racial disparities in who is unbanked in Vermont. It’s more likely to be a person of the household of color who is unbanked, a Black or Hispanic household. So our office is strongly in favor of making this legislation the most protective of unbanked and underbanked households that it can possibly be.”

In a letter (which can be seen here) to the committee, the Office of Racial Equity cited the importance of cash as a failsafe. 

Cash “can survive natural disasters, electrical grid failures, outdoor and open-air market settings and cashless transaction system failure scenarios,” the letter reads. “Vermont is likely to experience more frequent and more severe natural disasters in the near future due to climate change. It is essential that retail businesses maintain the infrastructure needed to accept cash in case cashless payment systems fail.”

If passed, S.175 will go into effect July 1.

(The Community News Service is a program in which University of Vermont students work with professional editors to provide content for local news outlets at no cost.)