D.C.'s ban on cashless businesses takes effect

No cash, no more — D.C. will enforce a law starting Sunday that bans businesses from refusing cash payments.

Why it matters: Cashless policies have been controversial for years — and often deemed discriminatory — so there's finally clarity on how D.C. businesses should proceed.

Driving the news: The D.C. Council passed legislation in 2020 prohibiting retailers from discriminating against cash payments, but funding from the city to enforce it didn't kick in until the new fiscal year.

• The law was also unenforceable during a public health emergency — bad timing with the Covid pandemic when a bunch of businesses went digital to limit contact and prevent the spread via dollars (which we know now is not a thing).

Zoom in: The law stipulates that in direct transactions, businesses cannot refuse cash, charge a higher price for cash payments, or post signs that cash isn't accepted. That applies to restaurants, bars, retail shops, and more.

Yes, but: Businesses can offer cash-to-card services for in-store purchases with a lot of stipulations including no associated fees or time limits.

• Internet, mail, and phone transactions are exempt from the law. As are parking facilities that did not accept cash payments prior to Dec. 1, 2020.

Flashback: The cashless trend gained momentum in the pandemic, but it started well before. Salad mega-chain Sweetgreen led the all-digital charge in 2016, citing a decline in cash payments and the time and labor costs of processing them.

• It didn't last long. In 2019, Sweetgreen reversed the policy after facing backlash that it was discriminatory against people without bank accounts or credit cards — a demographic dominated by the elderly, low-income, and people of color.

Zoom out: Several states and cities have already banned cashless policies, including Massachusetts, California, and New York City.

Reality check: Cashless laws don't mean the digital trend is slowing down, thanks in large part to changes in consumer behavior during the pandemic. Businesses like Sweetgreen may take cash, but mobile ordering and app-based rewards programs are still huge, especially in the fast-casual sphere.

• Financial services company Square reported that their cashless D.C. clients jumped from 15% in 2019 to nearly 40% in 2021.

Between the lines: D.C. businesses have found ways — some more helpful than others — around the cash question, and it's still unclear if they'll have to change their policies. Nationals Park went cashless in 2021, but fans can exchange cash for "Nats Bucks" in the stadium to use at concessions.

• Meanwhile, local chain Compass Coffee limits cash by accepting only exact change or cash payments for gift cards.

The other side: Some businesses have sworn off cash to prevent burglaries, especially as crime has spiked in the city. Penn Quarter's Hill Country Barbecue went cashless years ago after back-to-back robberies.

What we're watching: Enforcement, of which even D.C. Council chair Phil Mendelson seemed unsure.