Seven years after San Francisco passed a law requiring brick and mortar stores to accept cash from customers, citing an \u201cethos of inclusivity,\u201d city leaders are seeking to repeal it.\u00a0<\/p>\n
Supervisor Rafael Mandelman, who proposed the repeal, said he was inspired to do so after hearing complaints from business owners that break-ins were \u201ckind of out of control.\u201d Some small business owners, he said, believe the requirement to accept cash makes them a target.\u00a0<\/p>\n
\u201cWe burden small businesses in the city to an extraordinary extent,\u201d Mandelman said. \u201cI think this is one area where we should let them decide how best to serve their customers.\u201d\u00a0<\/p>\n
Michael Rotella, the owner of Rocco\u2019s Caf\u00e9 in SoMa, said he discovered his restaurant had accepted thousands of dollars in counterfeit bills over the course of six months in 2024. That same year, his restaurant was also broken into twice. After conferring with nearby business owners, he realized that a neighbor with a sign stating there was no cash on the premises had been spared during a rash of burglaries.\u00a0<\/p>\n
\u201cIt was very apparent to me that people were breaking in for cash,\u201d Rotella said. \u201cSo that\u2019s when I went completely cashless.\u201d\u00a0<\/p>\n
About 20 percent of his sales came in cash, Rotella said, but he \u201cmade the difficult decision\u201d to flout the cash acceptance rule to protect his business and his staff\u2019s safety.\u00a0<\/p>\n
After a few months, he said, the city came knocking on his door, threatening to fine him.\u00a0<\/p>\n
The cash rule stems from an amendment to the police code<\/a>, passed in 2019. It requires most businesses to accept cash \u2014\u00a0with a few businesses (food trucks, pop-ups and service-based businesses such as hair salons) excepted.\u00a0<\/p>\n The impetus for the rule was accessibility: The \u201cvery poor,\u201d as well immigrant communities and the very young and old, the amendment read, \u201cfall outside the non-cash financial system.\u201d It cited a 2005 study commissioned by the city<\/a> which stated as many as 50 percent of African American and Latino households in San Francisco were estimated to have no bank account.\u00a0<\/p>\n Supervisor Matt Dorsey, another supporter of the police code repeal, said that \u201cequity concerns are less prevalent today\u201d than they were at the time the mandate was first passed because it\u2019s easier to get EBT cards, and platforms like Zelle and Venmo are more common. Neither Dorsey or Mandelman had data as to whether or how much disparities had improved as far as the city was concerned, but both said that business owners should be permitted to make the choice of whether to accept or reject cash.\u00a0<\/p>\n Nationwide, those levels are decreasing, but remain significant. A survey conducted by the FDIC found that in 2023, Black and Latino households were overrepresented in the unbanked population, with 10.6 percent of Black and 9.5 percent of Latino households in the U.S. were unbanked<\/a>, down from 17 and 14 percent in 2017.\u00a0\u00a0<\/p>\n Today, approximately 4 percent of San Francisco households are \u201cunbanked,\u201d or do not have a checking or savings account, and nearly 14 percent are \u201cunderbanked\u201d \u2014 have bank accounts but primarily use cash or use check cashers or money orders, according to Eric Manke, a spokesperson for the Office of Financial Empowerment, a public\/private partnership within the city\u2019s Office of the Treasurer & Tax Collector.<\/p>\n \u201cThese residents are often the most financially vulnerable and can face higher costs and barriers in everyday transactions,\u201d Manke said.\u00a0<\/p>\n \u201cIt\u2019s a matter of retail access for people who don\u2019t have other forms of payment,\u201d said city economist Ted Egan of the original mandate. On the other hand, Egan said, creating a cash infrastructure could be \u201conerous\u201d for small businesses.\u00a0<\/p>\n In some areas of the city, cash is still king: Many dive bars and mom-and-pop restaurants only accept cash. Others offer incentives for customers who pay cash, to save the business money on credit card processing fees.\u00a0<\/p>\n Neither Dorsey or Mandelman knew to what extent those disparities had improved, but both said that business owners should be permitted to make the choice of whether to accept or reject cash.\u00a0<\/p>\n \u201cBy and large most businesses will still conduct business in cash. I don\u2019t think there\u2019ll be a shortage of places in San Francisco where things can be bought in cash,\u201d Dorsey said. And those businesses that refuse to accept cash, he added, may \u201cpay a price.\u201d\u00a0<\/p>\n For some businesses, that price is worth it. Evan Bloom, the founder of Wise Sons Deli, recently wrote a letter urging supervisors to pass the repeal that his business only brought in 2 percent of its sales in cash, and that after \u201crepeated break-ins and armed robberies,\u201d Wise Sons had also decided to go cashless. \u201cSince doing so, we have experienced zero break-ins,\u201d Bloom wrote.\u00a0<\/p>\n \u201cIt sucks,\u201d Rotella said, of having to turn away customers with cash. \u201cBut in the city of San Francisco and specifically SoMa, I already have enough issues to deal with, with trying to keep the business alive.\u201d\u00a0<\/p>\n