NEW YORK CITY CREEPING TOWARD CASHLESSNESS

The other day at Dig Inn, a just-opened lunch spot on Broadway and 38th Street in Midtown Manhattan, Shania Bryant committed a consumer faux pas. She placed her order for chicken and brown rice and yams, and when she got to the register, she held out a $50 bill.

“Sorry,” the cashier told her. “We don’t take cash.” Not, “We don’t take $50s.” No cash. Period.

“What?” Ms. Bryant asked.

The cashier patiently explained. Credit and debit cards were fine, as was the easy-to-download Dig Inn phone app. But the almighty dollar was powerless.

“I’ve never experienced that before,” said Ms. Bryant, 20, an assistant to a designer. “I guess we’re in new times.”

Indeed. Cashless businesses were once an isolated phenomenon, but now, similarly jarring experiences can be had across the street at Sweetgreen, or two blocks up at Two Forks, or next door to Two Forks at Dos Toros, or over on 41st Street at Bluestone Lane coffee. In Midtown and some other neighborhoods across New York City, cashless is fast on its way to becoming normal.

Some people already live in this cashless future. They find nothing strange about paying for a pack of gum with a swipe of a card. If you are one of these people and you are still somehow reading this article, you may be thinking, “What on earth is the big deal?”

At Two Forks on 40th Street, where the lunch offerings have cheery names like Squash Goals, Kristin Junco, a 34-year-old auditor for the state Education Department, said she had not used cash for about a week and much prefers a cashless establishment to its opposite. “We travel a lot for work,” she said, gesturing to a colleague, “and if they don’t take credit cards that makes things difficult.”

On the other side are those who were raised to equate credit card spending with taking on debt — something to be avoided whenever possible, and reserved in any case for major expenditures. Those people do things like grab a $5 bill from their purse and run down from their office to the place on the corner thinking that they can buy a snack with it. They will catch on eventually.

Tim McLoughlin, 59, a writer in Brooklyn, did a double-take when he walked into a Bluestone Lane branch in Dumbo, Brooklyn. “My reaction was ‘Jesus, a New York City restaurant that records all its revenue? How can they stay in business?’ ”

They can, and do. At Pokee, a poke-salad place in Greenwich Village, cash is treated like a quarantinable substance. “If you have exact change, we’ll take it,” said the woman behind the counter. “We give it to the manager and he puts it in a safe. Because we don’t have a register.”

“Every day I have an argument with somebody about it,” said a cashier at the Dos Toros on 40th Street, who said she could not give her name because she was not authorized to speak without permission from the company. “I don’t make these rules, you know.”

Critics have noted that the practice also excludes the unbanked, though, at least so far, the places going cashless are sufficiently expensive ($3 for a coffee, $8 and up for lunch) that the prices alone will turn off most people who lack a bank account.

But wait, how is this even allowed? Doesn’t the dollar bill say it’s “legal tender for all debts, public and private”? The Federal Reserve’s website says that notwithstanding that language, there is no federal law compelling a business “to accept currency or coins as payment for goods or services.”

Asked why the $8.71 a customer owes for that Turmeric Sweet Potato Hummus Toast she just ordered is not considered a debt, the Federal Reserve offered a partial explanation, but it begins with the words “for purposes of illustration, and not for attribution to the Fed,” so we cannot share the rest. But a professor at the New York University School of Law who teaches contract and commercial law, Clayton Gillette, laid it out.

First of all, he said, you do not have a debt until after you receive a good or a service. What about at a sit-down restaurant, where you pay after you eat? “Assuming the restaurant lets you know up front that they don’t take cash, they’re offering to serve you a meal, but they are offering it on their terms,” Professor Gillette said. “If you consume the meal, you’ve accepted the terms of the contract.”

Still, occasionally, the Luddites win. A couple of weeks ago, Lisa Gaytan, 60, and a friend walked into a Van Leeuwen Artisan Ice Cream store in Boerum Hill, Brooklyn. Her friend ordered a vegan chocolate cone. He was told he could not pay with cash. He handed over his credit card. There was a problem with the card reader, or maybe the Wi-Fi. In any case, the machine was down. The cashier apologized and said the ice cream was on the house.

“My thought was, sometimes the analog world works better than the digital,” Ms. Gaytan said. “We both walked out of there saying ‘That was crazy.’ ”

David adds:

I think that the Fed is wrong here. The term "legal tender" means that when payment is tendered in a form that a sovereign nation has declared to be legal tender, whether in coins or paper money, the creditor is forced to accept it. (One-cent pieces may not have legal tender status because they may not be put in some toll collection systems.)

Section 16 of the Act of April 2, 1792 ("the Mint Act") provides that gold and silver coins struck by the U. S. Mint shall be "a lawful tender in all payments whatsoever". It does not define "lawful tender" nor give legal tender status to copper coins.

The Act of February 9, 1793, gives "legal tender" status to certain gold and silver coins of foreign nations. This act, also, does not define the term "legal tender".

Section 1 of the Act of February 25, 1862, to "authorize the issue of United States notes ..." provides that the notes issued pursuant to the Act "shall also be lawful money and a legal tender in payment of all debts public and private, within the United States, except duties on imports" and interest upon bonds and notes. Again, the term "legal tender" is not defined.

I have not looked further into whether sellers (or creditors) are required to accept U. S. coins or currency as payment for merchandise or services rendered. Of course, gold and silver coins no longer circulate. But it looks as if that question may be ripe for a court decision.

To read the complete article, see:
Cash Might Be King, but They Don’t Care (https://www.nytimes.com/2017/12/25/nyregion/no-cash-money-cashless-credit-debit-card.html)

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