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The Spoon

Daily news and analysis about the food tech revolution

cashless

San Francisco Vote Bans Cashless Retail (Good Thing Amazon Go Now Accepts Cash)

San Francisco is the latest local government to put the kibosh on cashless retail operations. As the San Francisco Examiner wrote, yesterday the city’s Board of Supervisors unanimously approved legislation to ban cashless businesses, which will go into effect 90 days after its final approval.

The move follows similar legislation passed recently by both New Jersey and Philadelphia (and currently being contemplated by New York), all of which aim to help reduce income inequality and protect the rights of the non-banked and underbanked who don’t have access to a credit card. While businesses have argued that going cashless is more accurate, secure and efficient for consumers, ultimately, regulators see it as discriminatory.

There are some exceptions to San Francisco’s new law. As the AP reports: “Temporary pop-up stores and internet-only businesses such as ride-hailing companies would be exempt, as would food trucks, which say they lack the resources to handle cash.”

San Francisco had initially exempted Amazon Go from the ban, but then changed its mind in March. The city’s new rule also comes just days after Amazon launched its first cash-accepting Amazon Go store, which is also the first Go store in New York. The new location features a dedicated entrance for cash payers and a counter in the middle of the store where a person with a handheld scanner rings up shoppers and accepts payment. Amazon hasn’t indicated when it will add cash payments to its other stores, but the company basically has three months to get its three SF locations compliant with the new law.

There are actually a number of startups looking to retrofit existing supermarkets with Amazon Go-like cashierless checkout. But as these new cash-requiring rules pop up around the country, it will be table stakes for any such startup to tie in with a retailer’s POS system to enable both grab-and-go checkout as well as traditional payment checkout.

Amazon Go Opens in New York, Begins Accepting Cash Payments

Amazon Go opened up its first store in New York today, but more remarkable than the location is the fact that it will be the first Go store to accept cash payments.

This is a big deal as Amazon Go was created to be a frictionless shopping experience with no checkout lines. The whole point was to scan your phone as you walk in, have banks of sensors and cameras keep track of what you pick up, and automatically bill you as you walk out of the store.

While that type of shopping is pretty amazing, Amazon Go became a poster child for a growing cashless backlash. Going cashless means large swaths of people, particularly poor and underbanked, don’t have access to credit cards and were thus shut out of these experiences. In reaction to this digital discrimination, state and local governments like New Jersey and Philadelphia enacted laws prohibiting cashless retail, with more cities like New York and San Francisco considering similar regulations.

Amazon tried fighting these new laws and lost, so last month, the company acquiesced and said it would begin accepting cash payments. At the time, this raised the question, how would a store built around having no cashiers accept cash?

The answer, according to CNET, which got a tour of the new New York location, is that the store has a separate entrance staffed by a person for those paying with cash. Once your shopping is done, there is a counter in the middle of the store where a person with a handheld scanner checks you out, accepts payment and will even give you a paper receipt. Amazon did not say whether this new cash acceptance system will be rolled out to its eleven other existing stores.

The New York store is the twelfth Amazon Go location and is situated in Brookfield Place in downtown NY.

Facing Mounting Regulatory Pressures, Amazon Go Will Accept Cash Payments

The whole point of the Amazon Go store was to create a frictionless retail experience where you could walk in, grab what you want, and walk out, paying automatically with no checkout lines. But now Amazon is getting the point that it just can’t beat city hall, and as CNBC reports, the company is adding cash payment options to its Go stores.

Details are scarce, but CNBC writes:

In an internal all-hands meeting last month, Steve Kessel, Amazon’s senior vice president of physical stores, told employees that the company plans “additional payment mechanisms” at its Go stores. Kessel was responding to a question about how Amazon plans to address “discrimination and elitism” at the cashierless stores, which charge purchases using an app connected to a bank or credit card.

Amazon didn’t elaborate on exactly how it would integrate cash-payment systems in Go stores, or how such implementations would impact the overall store experience. Right now, all a shopper has to do is scan the Amazon Prime app on their phone going into the store, gather the items they want and walk out. Will Amazon need to add a human to accept the cash, or will it be another automated system that keeps track of shoppers in store?

The debate over cashless retail has been a hot-button topic we’ve followed over the past year. While there are many merits to a cashless approach (employee safety, accounting accuracy), going cashless excludes larges swaths of the population that are poor and/or underbanked.

City and state regulators looking out for these constituents (and perhaps wanting to stick it to a tech giant like Amazon a little in the process) have recently started enacting laws forbidding cashless retail stores like Amazon Go. Philadelphia, PA and the state of New Jersey recently passed such bans, and other major metropolises like New York City and San Francisco are considering them. The state of Massachusetts has banned cashless retail since the 1970s.

Amazon reportedly fought the Philadelphia ban to no avail, and perhaps sensing that it would lose further battles and more public sentiment, the company changed course.

While Amazon only has to retrofit the 10 stores it has open now, adding a cash option will no doubt alter the in-store experience and throw up a few roadblocks in the planning of future openings, slowing down Amazon’s march towards 3,000 locations within three years.

Any slowdown could provide an opening for the many cashierless checkout companies to get their technology in the hands of rival bodegas, convenience markets, and grocery stores. Grabango is one, in particular, that already features a checkout system that integrates with existing checkout systems, allowing people to pay any way they like (cash, credit card, etc.).

The point is, we may think of Amazon as an unstoppable tech juggernaut steamrolling over whatever it wants, but a few people in modest positions of power can make the company pay the piper.

San Francisco Targets Amazon Go with Cashless Retail Ban, Third Region to Do So

Amazon may have to put the brakes on the aggressive rollout of its automated Amazon Go stores, as more local governments are proposing bans on cashless brick-and-mortar retail operations. San Francisco is considering such a ban, following recent similar moves by other cities and states.

San Francisco’s cashless ban was first proposed back in February, but at that time did not include Amazon Go, because the stores don’t have employees handling cash. This week, however, San Francisco District Five Supervisor Vallie Brown expanded the proposed ban to include Amazon, which operates three Go locations in the city. The proposal comes on the heels of New Jersey’s cashless retail ban earlier this week, and Philadelphia’s earlier this month. New York City is considering such a ban as well.

Amazon Go locations are small, bodega-sized stores that have no cashiers. You scan the Amazon Prime app on your phone as you enter the store and high-tech sensors and cameras keep track of everything you take, automatically charging your credit card as you leave.

As my colleague, Jenn Marston has written, “Those who are against cashless businesses argue that restaurants and stores only accepting those payment forms exclude poorer communities and those for whom credit cards might not be an option.” Stores that have implemented cashless operations say they are safer (nothing to rob) and more accurate bookkeeping.

Amazon, however, is probably less concerned with safety and accuracy in its Go stores than it is with shopping efficiency (FWIW, we recognize the societal implications of cashless retail, and we loved shopping at Go). Amazon is all about removing friction from the retail experience, so you buy more stuff from them.

Amazon’s cashless troubles are compounded by the fact that the company is facing a broader backlash after its much-maligned second HQ search, and has become one of the targets of a larger anti-tech sentiment, with presidential candidates calling for its breakup.

This anti-Amazon sentiment gives the company less leverage in any fights it wants to pick with cities to keep the Go train rolling. Amazon had reportedly threatened to pull out of its Philadelphia location over accepting cash, which didn’t stop the city from enacting the ban anyway.

So what will Amazon do if more cities decide to ban cashless retail? The company can’t pull out of every city, and dense urban environments are where Go stores work best. But it’s hard to imagine the company going back and curtailing its AI and computer vision work it’s put into Go as it really is a great retail experience, and there’s too much data to be had watching us shop.

Amazon is laying some groundwork for Go experiences outside of cities. The company is looking at shrinking the already small Go stores to fit inside office buildings. Going more private like that could help it sidestep anti-cashless regulation.

But if the anti-cashless trend catches on, how long before Amazon Go is gone?

Report: Being Cashless Backfires When Payment System Crashes

Customers at the sweetgreen in Hollywood (Sunset and Gower location) reportedly got a nice surprise during lunch time yesterday — a free meal. A social media post yesterday from a customer who was there that said the restaurant’s payment system went down, and since sweetgreen is a cashless establishment, the store wound up giving away lunches to all the people standing in line waiting to order.

We don’t have many details except the one eyewitness (who asked to remain anonymous when we followed up with them) report who said that the Hollywood sweetgreen found itself with a “completely crashed system” during the lunch rush. The restaurant had no way to accept cash and instead of closing, they decided to give away food for free.

If it happened as told, this is probably an isolated incident (we reached out to sweetgreen, see below). But the situation highlights the perils restaurants can experience when going cashless, especially if they don’t have contingency plans in place.

The sweetgreen salad chain went cashless in January of 2017. From that point on, in order to pay for your food you had to either order through the app or use a credit card in-store. As my colleague Jenn Marston wrote last year, going cashless has its pluses and minuses.

The good thing about going cashless is improved safety for workers (nothing to rob), faster service, and improved accuracy. All good things! The downside, however, is that it’s expensive to implement, local governments may make it illegal, and it shuts out the poor and young as customers. All bad things!

Going cashless has also had its ups and downs as a businesses decision, for those who tried it. Shake Shack abandoned its self-service, cashless store in New York. And while Eatsa retreated on its plan to roll out its own automated, cashless restaurants, Wow Bao was so taken with Eatsa’s technology and after an initial test decided to open a second cashless location.

We reached out to sweetgreen asking about the incident and to see what type of back up plans the company has in place if and when outages like these happen. A PR rep for the company wrote us back neither confirming nor denying the outage, simply saying that they were going to pass on the opportunity to answer any of our questions.