Amazon Caves to Pressure Over ‘Discrimination and Elitism’ at Cashless Stores

Update: Amazon’s Statement (12:45 pm ET)

In response to FN’s request for comment, a spokesperson for Amazon said “We are working to accept cash at Amazon Go.”

What We Reported Earlier (12 pm ET)

Amazon is yielding to pressure from critics and lawmakers who expressed concerns that its cashless stores discriminate against lower-income Americans.

Steve Kessel, Amazon’s SVP of physical stores, told employees at an all-hands meeting last month that the company plans to add “additional payment mechanisms” at its Go stores, CNBC reports. Kessel, the publication noted, was responding to a question about how Amazon plans to address “discrimination and elitism” at its cashierless stores.

The development comes after the online behemoth shouldered criticism from lawmakers and civic groups who charged that Amazon and other retailers that have adopted contactless payment options — requiring that customers use only mobile apps and credit or debit cards to shop their businesses — may inadvertently disenfranchise low-income families.

Philadelphia last month became the first major city to ban cashless stores and New Jersey joined the fray later that same month when Gov. Phil Murphy signed a bill banning cashless retail stores and restaurants across the entire state.

Experts believe the trend could gain momentum across the U.S. as council members in New York and elsewhere float similar measures — expressing concerns over the future of millions of Americans who don’t have banking or mobile access.

According to FDIC’s 2017 National Survey of Unbanked and Underbanked Americans, 8.4 million U.S. households (or 6.5 percent) — made up of 14.1 million adults and 6.4 million children — were “unbanked” in 2017. (Unbanked, per FDIC, means no one in the household had a checking or savings account.) Meanwhile, another 18.7 percent of American households were “underbanked” in 2017, meaning that the household had an account at an “insured institution” but also received financial products or services outside of the banking system.

What’s more, according to the FDIC, unbanked and underbanked rates are consistently higher among these households: lower-income, less-educated, younger, black and Hispanic, working-age and those with volatile income. (More than half, or 52 percent, of Americans who were unbanked in 2017 cited “not having enough money to keep in an account” as the main reason.)

As Amazon grows its brick-and-mortar presence through its bookstores and “four-star” outposts — which offers products that have been rated four stars and higher as well as new and trending items on its website — it had been a pioneer of the cashless business model across the industry. The company now has 11 cashierless Amazon Go locations in San Francisco, Chicago and Seattle, and intends to open 3,000 over the next few years. It had reportedly pushed back against the cashless ban in Philadelphia that was ultimately passed into law.

Amazon did not immediately respond to FN’s request for comment.

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