Stroll into the airy Kit and Ace store on Woodward
Avenue in Detroit and you're struck by the minimalist style that
highlights the brand's comfortable, street-smart clothing line.
But if you want to buy a scarf, maybe one that's
on sale for about $50, don't bother paying with cash. The store
won't take your Benjamins — or Hamiltons, Jacksons or Grants.
It's nothing personal. It's a no-cash policy that
has been adopted at other Kit and Ace stores, too.
How much closer, really, are we to a cashless society? Are
we looking at the beginning of a more minimalist approach to money?
"I think we are sort of on the edge of seeing more and
more businesses that don't take cash," said Jay Zagorsky, economist and
research scientist at Ohio State University.
Zagorsky has been talking about a transition to a
cashless society for some time. He points out that some parking lots
on university campuses and elsewhere no longer take
cash. Many airlines no longer let you pull out cash to buy snacks or
drinks because it's too difficult to make change.
Zagorsky sees a time, maybe in a few years, when more
retailers wil not accept cash, which could make it harder on poor families who
do not have bank accounts.
Ashiyana Somlai-Maharjan, a rep for Kit and Ace, said the Vancouver,
B.C.-based retailer has had a no-cash policy since it opened its doors.
"Our shops are designed to be a seamless shopping
experience. From the strategic layout of our merchandise, to clearly visible
hangtags, to no phones on site, and cashless registers," said
Somlai-Maharjan.
Many people still do use cash. A 2015 Survey of Consumer
Payment Choice indicates a trend away from paper checks. Debit cards are the
most popular form of payment, with 31.1% of payments covered by debit
cards. Yet 26.3% of payments are covered by cash; while
22.5% are covered by credit cards; and the rest are made by check, money order,
prepaid cards, electronic payments and online bill paying.
Retailers and others have plenty of reasons to eliminate
cash, Zagorsky said. Clerks or attendants might steal. Or there could be
robberies. No one has to count change or make sure a cash drawer
balances. Store employees don’t have to haul cash to the bank at the end
of the day.
The use of credit cards seems harmless, but it comes with a
cost — one that retailers tend to pass on to customers. They typically end
up raising the prices charged to everyone — including those who pay with
cash — to cover the fees that credit card companies charge, Zagorsky said.
Overall, people who have credit cards can benefit, because
they often carry rewards cards where they get cash back or airline miles on
their purchases.
Paul Traub, senior business economist for the Detroit Branch
of the Federal Reserve Bank of Chicago, said there's no federal
statute requiring a private business, a person or an organization
to accept currency or coins.
"Private businesses are free to develop their own
policies on whether to accept cash unless there is a state law which says
otherwise," Traub said.
A new book, The Curse of Cash by economist Kenneth
S. Rogoff, makes the case for encouraging the U.S. government to
drastically scale back on $100 bills. Rogoff, a Harvard University professor of public
policy, is calling for a “less-cash society”. He suggests leaving
smaller bills in circulation since he maintains that a major issue with
paper currency, particularly large bills, is that a good amount is used to
facilitate tax evasion and other crimes Cash, he argues, is king in the
underground economy.
He offers this visual: $1 million in $100 bills weighs
roughly 10 kg and can fit smartly into a briefcase.
How much shopping we will be able to do with cash could one
day depend very much on where we shop.
edited from USA Today
