Thursday, March 1, 2018

Cashless Society?

A recent trip on the turnpike in Florida was an illuminating experience in our increasingly cashless society.

In parts of Florida, they have what they call "toll-by-plate" where they take pictures of your car and then send you a bill for the tolls. For the most part, it works fine, except that it under-tolls on occasion when the plates are not legible.  On the Florida Turnpike, however, they still rely on "Sunpass" or paying for tolls with cash - particularly coins.   We lost our Sunpass years ago after we left Florida, so we had to pay the tolls in cash - where we could.

In most major toll plazas, there was a toll-taker who gave change.   But at some exits, it was Sunpass only - meaning you could not exit if you wanted to pay cash, unless you wanted to incur a $100 fine.

Other plazas accepted money - but only in the form of coins at automated booths.   At one such plaza, we had to grab an envelope and mail in a check (to the cacophony of honking horns behind us) as we didn't have two dollars in change in the car.

It was an interesting experience - and gave us a taste of what the "cashless society" is like for people who have only cash.

Several restaurants and other businesses have made news by switching to no-cash.   If you want to eat at the restaurant and buy things at the business, you need a credit card or debit card.  No cash.   And this is legal, despite the notation on the dollar bill that it is good for "all debts, public or private".   Companies can stipulate how you pay your bills and in what form.  If they want you to barter with live chickens, that's their option - but it likely would be a poor one.

Only Massachusetts has a law in effect that forces people to accept cash - well, it says that companies cannot force you to finance purchases, which has been interpreted to mean you have to accept cash.  I suspect the law was passed to prevent companies from offering "low, low prices" but only if you finance at onerous interest rates with pre-payment penalties.   If pushed, that law may be limited as well - after all, using a debit card is not financing a purchase, is it?

Regardless of Massachusetts, the rest of us are faced with the conundrum on a daily basis of fewer and fewer places accepting cash.   Why are companies doing this?  And is it fair?

The first question is easy to answer - accepting cash costs more money, even compared to credit card transaction fees.   When you have a retail business that accepts cash, you will end up with employee theft.   That's why many small businesses have a sign saying, "If you do not receive a receipt, call this number for a free meal!" or something to that effect.  They don't want the "cashier" pocketing the cash and voiding the sale (which is also why voids require a manager override).

When Mark worked at a seaside hotel in college, he was appalled that the coke-snorting manager there bragged that he basically pocketed half of all the cash that came across the counter.  The distant owners of the hotel had no way of accounting for the cash transactions, and since there were always unoccupied rooms, the manager could rent them out and not ring them up on the computer.  The system showed the room being unrented, and the manager puts the cash in his pocket.

Employee theft is the biggest "shrinkage" loss in retail businesses - often far exceeding shoplifting.

Of course, counting and accounting for cash takes time and costs money.   And no matter how careful you are with your cash drawer, you rarely come up even-steven down to the penny (well, except Mr. See, who was astute).   Most cashiers end up putting a dollar or two in the till to make it even up.  Or in some instances, where they are short-changed by clever customers, they have to put in more.   It is not an exact science!

Having lots of cash around also makes you a target for armed robbery.   No cash?  No robbers!   If you've had a gun shoved in your face even once, you appreciate how appealing a "no cash" business can be.

There is also the time factor - it often takes less time to process a credit card than to count out change and whatnot.  For fast-food restaurants, which are increasingly going to kiosks anyway, credit cards make sense.

But the second question, is it fair? is harder to answer.

To someone like myself, who spent the last ten years getting his financial house in order, it is not an issue - unless I am on a toll road that isn't accepting cash or credit cards!   I can use my credit card at a business and not only does it not cost me extra, I might get 3% cash back on the purchase.

However, as some note, with credit cards, it is all-too-easy to over-spend.   Buying with plastic tends to encourage spending, as the purchase doesn't seem as "real".

And then there is the old me - before I paid off all my debts.   I was like 70% of Americans and had a running balance on my credit card every month, that I never could seem to pay off.   As a result, each new purchase added to that balance and made it harder and harder to pay off the entire amount.   I had no self-control, but worse yet, once you get behind the 8-ball on credit card payments, you will find it next-to-impossible to get out from under the burden.

And in this regard, the cashless society makes it all-too-easy for people to fall into this hole of debt, one fast-food meal at a time.   Yes, you can use debit cards, or pre-paid credit cards (fees apply), or even your EBT card (for cold food only!).    But you have to have a bank account to get a debit card, and some folks struggle to do even that, if they have a checkered financial history.  So some people will be forced to buy pre-paid debit cards, which can be costly to use - more costly than cash - if they want to patronize a business.

Of course, one argument in favor of using cash is that it allows people in the underground economy to participate in everyday transactions.  Ever wonder why the guy in the big pickup truck is paying $100 cash to fill it up instead of using a credit card?  Odds are, that is the cash he received for working a "side job" under the table - cash he can't deposit to his bank account without the government finding out eventually.   Or it could be money from drug dealing.

The government would like to see a cashless society, as it would be far easier to regulate economic activity.  Without cash, you could not have illegal prostitution, drugs, or other nefarious activities - or at least it would be harder to manage them.   I suppose you could barter bottles of Tide laundry detergent or something.  That would be convenient to lug around, right?

There is also the question of businesses losing customers by going to a no-cash model.   And in some regards, many think this is part and parcel of the deal.   You tell people "no cash" at your fast-casual restaurant, and that means the homeless man who just bummed $100 at a stoplight isn't going to stink up your place ordering soup.   He's locked out, along with the poor, the working poor, and those on welfare, whose EBT cards won't buy "hot" food.

Economic discrimination isn't illegal - and often more effective that ordinary discrimination.   In 1950 or so when Jekyll Island became a State Park, the South end was cordoned off as "Black Jekyll," complete with its own hotel and restaurant, beaches, and building lots leased to black residents.   With the end of segregation, these barriers were removed, and anyone could go to any restaurant or hotel or lease a building lot, anywhere on the island, regardless of race, creed, or gender.

Today, there are fewer black residents and visitors on the island than during the segregation era.  Maybe the number of visitors is the same - perhaps greater - but I suspect that as a percentage, has declined.   As for residents, well I know of only one or two black families who own homes here on the island.   And as for "Black Jekyll" the hotel was finally torn down and made into the new 4-H center, and the building lots set aside for black residents are all leased to white residents.

Economic discrimination did what racial discrimination couldn't accomplish - and far more subtly and effectively.

So, not accepting cash is one way to keep the "riff-raff" out - which often means keeping minorities out, particularly in urban areas.  In rural areas, it keeps the white trash out.

So, fuck the poor, right?   Well, I kind of thought so at first, when I first read articles about cashless restaurants.  I mean, I have a credit card?  Why don't they get with the program?

But I felt differently when I realized I was trapped on a toll road, and couldn't even take certain exits, because I didn't have a "sun pass" for certain exits that only took that form of payment - or even correct change for others.   I had money, but no way to spend it, and it was an interesting feeling - a feeling of being trapped.

And I can tell you, it was not a comfortable feeling!

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