In the name of fairness, Georgia would discriminate against internet sellers and cash buyers – Wacky Tax Wednesday

A few lawmakers in Georgia have introduced a bill that would require merchants to accept cash payments. Though just a slip of a measure, it raises some interesting questions.

On the surface, prohibiting businesses from discriminating (their word) against cash buyers seems reasonable, even right. After all, millions of Americans don’t have a bank account or access to credit, including about 7.4% of households in Georgia. If customers can pay by cash, shouldn’t they be allowed to? What kind of business would refuse to accept cash?

Well, I can think of at least one.

House Bill 1152 stipulates that “a merchant shall not discriminate against a cash buyer by requiring the use of credit in order to purchase such merchant’s goods and services and shall not refuse to accept legal tender when offered as payment by a buyer.”

At no point does the bill specify that this requirement would apply to face-to-face transactions only, so in theory, mail-order and online sellers would have to find a way to accept cash. This puts mail-order and internet sellers in a pickle. If unscrupulous sorts are willing to break the locks of cargo trains to pillage their contents, I can only imagine what a time they’ll have slicing open envelopes full of cash.

Of course, there are more secure ways for the unbanked to purchase items online. Gift cards for many online sellers are sold at numerous brick-and-mortar stores, where they can be purchased with cash. One can also purchase (for cash) one-time visa cards worth $20, $100, or more, and general purpose reloadable prepaid cards. In other words, unbanked and underbanked people aren’t entirely shut out from ecommerce transactions.

Nonetheless, HB 1152 would presumably require online sellers to come up with more accessible, more secure payment options for cash buyers. This would surely be a challenge, though it may not be entirely out of reach: It wasn’t too long ago that the blockchain and virtual currency seemed like science fiction. 

Still, a similar measure introduced in Idaho last year was updated this legislative session to solve for this very problem. 2022 House Bill 513 specifies that the requirement to accept cash payments applies to “a person who engages in business as a seller of goods or services via in-person retail transactions in this state” (emphasis mine).

And internet and mail-order sellers aren’t the only businesses that might be troubled by the enactment of HB 1152. 

The measure reads: “If a merchant does not have exact change to give a cash buyer for an overpayment for goods and services paid for with cash, the merchant shall remit the amount of payment in excess of the purchase price and sales tax to the Department of Revenue for deposit into the general fund of the state treasury.”

Let’s assume a customer hands a merchant a $20 bill to pay for a shirt that costs $15, plus $1.20 in sales tax. The customer doesn’t have a debit or credit card, and the merchant doesn’t have any change. Under HB 1152, the merchant is required to keep the extra $3.80 then pass it to the Georgia Department of Revenue.

That could spark a fun conversation if a buyer doesn’t have exact change: “So, I know the shirt costs $15, plus tax, but you’ll have to pay $20 for it because you’re paying in cash with a $20 note, and I don’t have exact change. But don’t worry! I’m not keeping the extra money. I’m going to turn it over to the state so it can be added to the general fund. Thanks for doing your part to make Georgia better.”

No matter how delicately it’s phrased, I can’t imagine any prospective buyer would agree to this. Would you?

HB 1152 has some kinks, but the authors deserve some credit for raising this issue.

Though the number of unbanked households fell between 2015 and 2019, there were still approximately 7.1 million unbanked households in the U.S. in 2019. And that was before the COVID-19 pandemic and the economic challenges it sparked.

Furthermore, as virtual currencies and the metaverse gain ground, cash buyers may be feeling increasingly alienated and locked out of certain transactions. HB 1152 seeks to make them less so, and perhaps aims to raise awareness of the millions of people in Georgia and the rest of the country who, for one reason or another, deal primarily in cash. I certainly learned something new while researching this issue.

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