The Detroit City Council unanimously enacted an ordinance that prohibits local businesses from refusing cash payments. The ordinance will affect all retail and food service businesses, including Detroit’s largest sports venues such as Little Caesars Arena, Comerica Park, and Ford Field.

The cashless ban aims to support over 100,000 unbanked Detroit residents. The ordinance was enacted by the City Council on June 13, 2023 and is effective on September 11, 2023.

While there is no existing federal law mandating businesses to accept cash, Detroit joins other cities, such as San Francisco, Philadelphia and New York, which have enacted ordinances prohibiting cashless business operations. Various states, such as New Jersey, Massachusetts, Colorado, Rhode Island, Oregon, and Tennessee, also have implemented legislation banning cashless businesses. Additional states are currently considering similar legislation.

Under the Detroit ordinance, retail and food establishments are not allowed to reject cash payments, impose higher prices on customers who pay in cash for consumer goods, or display signs indicating non-acceptance of cash. However, there are several exceptions to the ban on cashless transactions. Transactions conducted over the telephone or internet, payments at parking lots or parking garages, retail membership fees, rentals of consumer goods requiring collateral, and payments for rideshare services through mobile apps are exempted under the ordinance.

Businesses that offer a conversion device on their premises (i.e., devices which permit customers to convert cash into prepaid cards) will be exempt from the cashless prohibition if certain conditions are met. These conditions include not charging a fee for using the device, not requiring a minimum deposit exceeding $5.00, not collecting any personal identifying information from customers, and enabling customers to redeem any remaining balance for cash. Additionally, a prepaid card must not have an expiration date, and there may be no limit on the number of transactions that can be carried out using the card. Although businesses may not set a minimum purchase amount for cash payments, they are not required to accept large bills of $100.00 or more.

Anyone found guilty of violating Detroit’s ordinance may be charged with a misdemeanor for each violation and may face a $500.00 fine, 90-days in jail, or both.

Detroit business owners should begin considering the following changes to ensure compliance with the new ordinance:

• Consumer Communication: Business owners that currently refuse to accept cash should immediately begin the transition to accepting cash, including notifying customers about when changes will take effect, updating signage and promotional materials, and providing clear instruction on how cash transactions will be processed.
• Accepting Cash and Updating Payment Infrastructure: In preparation to begin accepting cash, business owners would need to implement cash handling procedures involving installing cash registers, point-of-sale (POS) systems that accept cash, conversion devices, and procurement of a safe or other secure places to store cash. Integration with accounting systems and inventory management may also be necessary.
• Staff Training: Business owners should train their employees on the updated payment processes, cash handling procedures, and customer service related to cash transactions. There should be policies implemented relating to accepting cash and the handling of cash transactions efficiently and accurately.