Seven years after San Francisco passed a law requiring brick and mortar stores to accept cash from customers, citing an “ethos of inclusivity,” city leaders are seeking to repeal it.
Supervisor Rafael Mandelman, who proposed the repeal, said he was inspired to do so after hearing complaints from business owners that break-ins were “kind of out of control.” Some small business owners, he said, believe the requirement to accept cash makes them a target.
“We burden small businesses in the city to an extraordinary extent,” Mandelman said. “I think this is one area where we should let them decide how best to serve their customers.”
Michael Rotella, the owner of Rocco’s Café in SoMa, said he discovered his restaurant had accepted thousands of dollars in counterfeit bills over the course of six months in 2024. That same year, his restaurant was also broken into twice. After conferring with nearby business owners, he realized that a neighbor with a sign stating there was no cash on the premises had been spared during a rash of burglaries.
“It was very apparent to me that people were breaking in for cash,” Rotella said. “So that’s when I went completely cashless.”
About 20 percent of his sales came in cash, Rotella said, but he “made the difficult decision” to flout the cash acceptance rule to protect his business and his staff’s safety.
After a few months, he said, the city came knocking on his door, threatening to fine him.
The cash rule stems from an amendment to the police code, passed in 2019. It requires most businesses to accept cash — with a few businesses (food trucks, pop-ups and service-based businesses such as hair salons) excepted.
The impetus for the rule was accessibility: The “very poor,” as well immigrant communities and the very young and old, the amendment read, “fall outside the non-cash financial system.” It cited a 2005 study commissioned by the city which stated as many as 50 percent of African American and Latino households in San Francisco were estimated to have no bank account.
Supervisor Matt Dorsey, another supporter of the police code repeal, said that “equity concerns are less prevalent today” than they were at the time the mandate was first passed because it’s easier to get EBT cards, and platforms like Zelle and Venmo are more common. Neither Dorsey or Mandelman had data as to whether or how much disparities had improved as far as the city was concerned, but both said that business owners should be permitted to make the choice of whether to accept or reject cash.
Nationwide, those levels are decreasing, but remain significant. A survey conducted by the FDIC found that in 2023, Black and Latino households were overrepresented in the unbanked population, with 10.6 percent of Black and 9.5 percent of Latino households in the U.S. were unbanked, down from 17 and 14 percent in 2017.
Today, approximately 4 percent of San Francisco households are “unbanked,” or do not have a checking or savings account, and nearly 14 percent are “underbanked” — have bank accounts but primarily use cash or use check cashers or money orders, according to Eric Manke, a spokesperson for the Office of Financial Empowerment, a public-private partnership within the Office of the Treasurer & Tax Collector that seeks to connect residents to banking and other financial services.
“These residents are often the most financially vulnerable and can face higher costs and barriers in everyday transactions,” Manke said.
“It’s a matter of retail access for people who don’t have other forms of payment,” said city economist Ted Egan of the original mandate. On the other hand, Egan said, creating a cash infrastructure could be “onerous” for small businesses.
In some areas of the city, cash is still king: Many dive bars and mom-and-pop restaurants only accept cash. Others offer incentives for customers who pay cash, to save the business money on credit card processing fees.
Neither Dorsey or Mandelman knew to what extent those disparities had improved, but both said that business owners should be permitted to make the choice of whether to accept or reject cash.
“By and large most businesses will still conduct business in cash. I don’t think there’ll be a shortage of places in San Francisco where things can be bought in cash,” Dorsey said. And those businesses that refuse to accept cash, he added, may “pay a price.”
For some businesses, that price is worth it. Evan Bloom, the founder of Wise Sons Deli, recently wrote a letter urging supervisors to pass the repeal that his business only brought in 2 percent of its sales in cash, and that after “repeated break-ins and armed robberies,” Wise Sons had also decided to go cashless. “Since doing so, we have experienced zero break-ins,” Bloom wrote.
“It sucks,” Rotella said, of having to turn away customers with cash. “But in the city of San Francisco and specifically SoMa, I already have enough issues to deal with, with trying to keep the business alive.”
The revision will be voted on by the Board of Supervisors’ public safety committee on Thursday.