Cashless shop stirs up hornet’s nest
Augustine Mathews is often paid with cash and she does not want to see that option disappear. Photo: Anne Hardie.
Augustine Mathews has a small business where people often pay her in cash, but last week a local shop would not accept her cash and she fears it is another step towards a cashless society.
Merchant 1948 in Nelson is the latest shop to go cashless and has signage stating cashless payments only. It is not the first business to go cashless locally and is unlikely to be the last, but it did stir up a hornet’s nest about the relevance of cash and dependency on electronic payments.
When Augustine posted her experience on Facebook to see what others thought, hundreds responded. She runs a small jewellery business in Māpua and acknowledges there are pressures on businesses to move away from cash payments, but says people still have cash.
“I have money – actual folding stuff and I can’t use it. My money is legal tender but suddenly I can’t use it.”
The term legal tender is not as simple as it sounds though and includes a lot of legal jargon. In short, The Reserve Bank of New Zealand says that if a business has signage, or there is verbal advice stating it does not accept cash before shopping begins, then it does not have to accept cash. Without that signage or advice before shopping begins, the business is obliged to accept cash.
Regardless of the legalities, Augustine says the path toward a cashless society is being pushed by banks and does not take into account cyber security issues threatening electronic systems and events such as Cyclone Gabrielle, or those who rely on cash.
The Reserve Bank also views cash as important. It publicly states that having cash available, accepted in store and readily deposited are key to both well-functioning local economies and communities where everyone is included.
It says the closure of bank branches, fewer ATMs, reduced or removed cash services offered by banks, contribute to the falling use of cash and difficulties handling it.
Merchant 1948’s head office brand and marketing manager Stephanie Coote says one of the reasons for making the decision to become cashless was its banking partner was making it increasingly difficult to deposit cash moving forward. Multiple bank branches had been closed and in some other locations banks were completely cashless and had become admin-only facilities.
Another factor prompting the move to cashless stores is the 40 per cent increase in retail crime across New Zealand in the past two years and she says keeping both their team and customers safe is a huge priority for the company.
“With these two main factors contributing, we have found ourselves in the place of having to make this tough decision for our business overall. However, not all decisions are final.”
She says the company appreciates feedback and it will be passed on to the relevant departments.
Reserve Bank head of money and cash, Ian Woolford, says that in the past six years there has been a significant drop in the number of people who sometimes pay with cash, from 96 to 63 per cent. About six percent of New Zealanders still rely on cash though and they are more likely to be older, poorer, living rurally or Māori.
Age Concern Nelson Tasman’s manager Caroline Budge can understand businesses wanting to make their premises safer by removing cash and acknowledges fewer people are using cash. But she says there are still sectors of society using cash, especially older people who have never used electronic payment systems.
“When they took away cheques, there were a lot of older people upset about that because that was another option for them to pay. Now we’re heading towards cash becoming less common.
“It’s taking away options for people who don’t have a card. It’s the people who are vulnerable that use cash.”
She says many older people living on a pension prefer cash because it enables them to budget better.