When State Rep. Prince Chestnut, D-Selma, in 2024, introduced a bill that would mandate Alabama retail outlets take cash, the House Commerce and Small Business Committee shut down the idea in a 6-3 vote.
That failed effort means Alabama has not joined the ranks of states enacting laws against establishments going cashless.
With no federal cashless ban, states are enacting their own rules. Massachusetts has had a statewide ban since 1978. New Jersey made a similar move in 2019. Ten states have since joined.
The latest is New York. Last week, New York Governor Kathleen Hochul signed a bill that made it illegal for retailers to refuse cash payments.
“Requiring cash acceptance ensures these individuals—who often come from low-income American households—can access essential goods and services,” Chestnut told AL.com.
About one in 20 households in Alabama, or 5.2%, are without a bank account, and the reasons could range from inability to meet the minimum balance requirement to need for privacy, avoidance of bank account fees, and lack of trust in banks.
“Making sure cash is accepted protects consumer choice and offers a level of privacy that digital payments do not,” Chestnut said. “Cash transactions do not generate data that can be tracked, sold, or hacked, which is a concern for some consumers.”
He explained that cash payments are immune to technical outages and power failures and his bill would have ensured that businesses cannot discriminate against people who prefer to pay in cash.
Chestnut fears the cashless trend can exclude “a significant portion of the population from fully participating in the economy.”
He said the bill was defeated because of opposition from retailers but does not preclude bringing it up again.
“If I sense there is a will to advance it with” House committee members, “and if communities embrace the bill and are willing to call their legislators and demand it, I will bring it back,” Chestnut explained.
“I initially brought it to help the unbanked, the senior citizens, those persons who are more comfortable handling their own money instead of plastic cards, and those people who believe that in America our choices should not be limited.”
Fifteen Republicans and eight Democrats joined Chestnut’s 2024 bill as co-sponsors, but the Alabama Retailers Association pushed against it. And when the move failed, the group said that was the best outcome for preserving the right of business owners to run their business as they see fit.
“Small businesses should be free to choose how to serve their customers,” an official with the association said at the time. “Retailers are entitled to accept or reject any method of payment, and, accordingly, customers are entitled to choose whether or not to shop there.”
The Alabama Legislature had in 2023 enacted a law requiring K-12 sport events have cash payment options for tickets. Curtis Travis, D-Tuscaloosa supported that bill at the time and was one of the co-sponsors of Chestnut’s 2024 bill.
It is about “giving people that option,” especially for people who, for whatever reason, prefer not to use debit or credit cards, Travis said.
“I think it is appropriate that all businesses be willing to accommodate everyone and that includes those people who use cash,” he said.
Spokesperson for the Alabama Retailers Association, Brittany Peters, however, said retailers choose different payment methods for various reasons.
“Some opt for credit-only models to reduce the risk of theft, particularly for businesses such as food trucks or mobile vendors that are more vulnerable when handling cash,” she said in a statement to AL.com. “Others may favor cash payments to avoid credit-card processing fees associated with small-dollar transactions.
“We believe small businesses should be free to choose how to serve their customers. Retailers are entitled to determine which forms of payment they accept, and customers may decide whether they wish to shop with a business based on those policies.”
