Small business owners fighting cash mandate

About a dozen owners of small stores and restaurants told Evanston city officials that an ordinance forcing them to take cash in their businesses would not only be extremely expensive, but would also make their employees and customers less safe.

The measure, proposed by Ald. Devon Reid (8th), was the topic of a Zoom session with merchants and the city’s economic development team on Thursday.

Reid said the ordinance is needed because there are several thousand “unbanked” people in Evanston, who, for a variety of reasons, do not have bank accounts, debit cards, or credit cards.

The alder said the unbanked are disproportionately minorities, and said his must-take-cash plan is a way of “keeping American currency as something folks can use in our city.”

However, the business owners said it should be up to small merchants whether to accept cash, or require debit/credit card payment only.

Julie Matthei, of Hewn Bakery, said her business stopped taking cash during the height of the COVID pandemic, as a health and safety measure, and has kept that policy because it is safer and more efficient.

If taking cash was mandated, Matthei said it would cost $20,000 in labor costs for employees to count the money daily and take it to the bank, far more than the tiny amount of cash she would actually take in from customers.

“Small businesses,” she noted, “are getting a lot of governmental overreach.”

Gabi Walker-Aguilar, of 4 Suns Fresh Juice said having cash on hand can make a business the target of criminals.

“We don’t have cash,” she said.

“You can’t rob us.”

Walker-Aguilar, whose business was just hit with a devastating accidental fire, said she hopes to re-open by the summer.

She also noted that while open, if a customer did not have a form of cashless payment, she would either give the person a free glass of juice, or ask them to pay some other time if they do end up with plastic.

Other restaurant owners said they provide food to various food banks and social service organizations, and are trying to help those struggling to get by.

Ald. Reid questioned the various business owners about credit card fees, wondering if such charges could actually be higher than the expenses associated with handling cash.

Heather Bublick, of Soul & Smoke restaurant, said she accepts cash because “it is about equity.” Not all people have cards.

But she also said the cost of dealing with cash far outweighs the 3% credit card processing charge. Because cash is such a small part of her business, but it still has to be separated, counted, and taken to the bank, Bublick said the cost of accounting and labor takes up 50% of the cash revenue.

Several compromises were considered.

One possibility is a “reverse ATM,” where those without bank accounts could put in cash, and receive a card loaded with whatever value is placed in the machine.

A problem with that, however, is that some small businesses don’t want such devices, because it’s still just another way to have a robbery magnet in their stores.

There were suggestions to have the machines in banks, which already have security.

Paul Zalmezak, the city’s Economic Development Manager, said he plans to talk with local bank officials, to see if solutions like that are possible, as well as trying to find ways to reach out to the unbanked and see if they would sign up for accounts.

The city is also surveying businesses on the cash/no cash issue, so those not involved in the Zoom call can still have input.

One major idea the small business owners are pushing is that only larger, “essential” businesses such as grocery stores and pharmacies would have to take cash.

The small business owners said that large chain stores are more able to deal with the cost of handling cash, and also are more likely to have in-house security guards.

Ald. Reid said there was no evidence that requring businesses to take cash leads to an increase in theft and robberies.

However, Mark Quiamzon, co-owner of Cinnaholic bakery downtown, said before he went cashless, his cash drawer was stolen “by a group of people who just walked in.”

Quiamzon said he is willing to sacrifice the small amount of potential cash income in return for not having cash in the business at all.

“We have chosen to be a cashless establishment,” he said, “even if it means less revenue for us, because I have to look at the safety of my staff.”

Zalmezak, the city’s economic development point person, said he plans to talk with police and store owners about business district patrols.

“We’re on it,” he said.

The mandatory cash ordinance will be before the Equity & Empowerment Commission on Feb. 16, and the Economic Development Committee on Feb. 22, before making it to City Council for a final decision, likely next month.

Changes to the current proposal are possible.

As Zalmezak noted, the question is “how do we accommodate this ordinance to an ever-digitizing world that seems to be changing overnight.”

As currently written, the ordinance calls for up to a $1,000 fine for the first violation, and up to $1,500 for subsequent violations.