New ordinance requires Newport Beach businesses to accept cash for purchases of up to $5,000

A new ordinance approved by the Newport Beach City Council last week requires brick-and-mortar businesses in the city to accept cash for the purchase of most consumer goods and services.

The new law passed as part of the consent calendar at the council’s Sept. 24 meeting in a 6-0 vote and is scheduled to go into effect March 31. When it does, stores will be obligated to take up to $5,000 in cash for the purchase of food, clothing, car repairs, theater tickets and practically any piece of merchandise or service shoppers might come across at a physical store. Exceptions to the rule include medical care and services performed at a private home like housecleaning, construction or plumbing.

Several states as well as cities like San Francisco and Berkeley already have similar measures in place. Supporters say the laws ensure people who have limited access to banking can still pay for the things they need.

“We really need to make sure we’re not taking people away from having a full Newport Beach experience simply because they would prefer to pay in cash,� Mayor Will O’Neill told the Daily Pilot Wednesday.

He added that he and many other parents might not be ready to trust their children with bank accounts and plastic but still want their kids to be able to run errands or go out with friends. The mayor also said people who value their privacy should be able to opt out of electronic transactions that could potentially be tracked and having their transaction history sold to marketers.

Several local business owners have come out against the ordinance in letters and comments presented at meetings. Some say switching to a cashless system has allowed their stores to run more efficiently and at reduced costs. Several said they felt that keeping cash on their premises could make them a target and they were concerned for the safety of their employees.

In a letter sent to the City Council on behalf of Freelance Coffee Project coffee shop on Production Place, Angela Wood said there had been recent break-ins at Earth Bar, Sal Straw Ice Cream and Coffee Dose in Costa Mesa.

“This proposed ordinance will cause additional risks for them and surrounding businesses,� Wood said. “As a deterrent, [Freelance Coffee Project] have placed signs on the doors and windows stating that we do not have cash on site.�

O’neill noted that the ordinance includes provisions to protect businesses. Stores can refuse to accept bills larger than $50 or take in more than $5,000 of currency in a transaction. For purchases that cost more than that limit, stores can require patrons to pay the difference electronically. That means that any business shouldn’t ever have to carry more than $5,000 plus enough bills and coins to give people their change at any given time.

“You won’t be able to walk into a Mercedes dealership and force them to hold a big bag of money if they don’t want to,� O’Neill said.

The ordinance may affect an estimated 7,000 of Newport Beach’s more than 20,000 businesses, according to city staff. O’Neill said he has heard lingering complaints from a handful of residents, but most business owners he has spoken to have come to terms with the new law.

“I’ve talked a number of people who own businesses and they say, ‘Y’know what Will? We’re good,’� he said. “Because for the slight bit of inconvenience they might have for having a little more cash on premises, we do want to be sure that we’re open for everyone.�