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It's the second state to do so. 

Caitlin Petreycik
Updated March 19, 2019

Less than two weeks ago, Philadelphia became the first U.S. city to ban cashless stores, and now, New Jersey is following suit. On Monday, New Jersey Governor Phil Murphy signed legislation outlawing cash-free restaurants and stores in the Garden State, NBC reports—making it the second state to do since since Massachusetts banned them in 1978. 

The debate surrounding cashless businesses—those that require payment by debit or credit card—has been escalating steadily, thanks to their recent proliferation and the accompanying media attention they've received. (Amazon Go, Dig Inn and Sweetgreen, who have all adopted a cashless model, are often mentioned.) Those in favor of requiring stores to accept cash argue that going cashless has classist implications—there can be hurdles to obtaining a debit or credit card. "This idea of 'we don't want to accept cash' just marginalizes the poor, young people who haven't established credit yet, people who prefer to pay in cash," New Jersey Assemblyman Paul Moriarty, a primary sponsor of the bill, told WNYC. "And then there's those who don't want every aspect of their life recorded, stored and monetized by credit card companies, right down to the purchase of a stick of gum."

The new law is effective immediately, and businesses that violate it will be fined up to $2,500 for a first offense and up to $5,000 for a second offense. After that, restaurant and store owners could be subject to higher fines under the Consumer Fraud Act. As with Philadelphia's laws banning cash-free establishments, there are exemptions for parking facilities, rental car companies, and airport vendors. Transactions made through the mail or over the phone are also exempt. 

Business owners who are opposed to the ban note that going cash-free can improve safety and efficiency—workers no longer have to carry large bank deposits, and transactions tend to be faster. "Consumers of all income levels are able to access prepaid cards for purchasing," Michael Wallace, vice president of government affairs for the New Jersey Business and Industry Association, said in a statement. "As such, this law will ultimately stifle innovation and act as a further deterrent to doing business in New Jersey." 

The New York City Council is currently considering a similar ban, although nothing has been signed into law just yet.