Amazon Cashes Out

 

Elaine Thompson/AP Photo

A customer scans his cellphone at the entrance of an Amazon Go store in Seattle, 2018. 

Responding to a rising tide of big-city opposition, Amazon announced on Wednesday that it would accept cash (or as the company calls it, “additional payment mechanisms”) at its Amazon Go convenience stores.

In March, Philadelphia banned cashless stores, becoming the first U.S. city to reject the burgeoning trend. City officials argued that the stores put unbanked low-income, immigrant, and minority consumers at a major disadvantage. Poised to be a major beneficiary of the model, Amazon tried to muscle out an exemption for its high-end Amazon Go cashless convenience stores.

Instead, Philly defied Amazon, the second major metro to do so after New York shocked the country in February by forcing out the company after the city had earned the dubious honor of being selected as one of the sites for Amazon’s second headquarters. Now, New York is poised to join the anti-cashless revolt, too, along with San Francisco, Chicago, and Washington, D.C. New Jersey has already ruled out stores that do not accept cash; Massachusetts did so years ago.

According to the FDIC, about 8.4 million households (14.1 million adults and 6.4 million children), or about 6.5 percent of households, are unbanked, figures that the agency notes may be “understated.”

Amazon plans to add thousands of its “grab and go” stores to its existing lineup in Seattle, Chicago, and San Francisco over the next several years. Company officials have threatened to exclude Philadelphia from the Amazon Go nationwide rollout. The Go convenience stores would allow consumers who’ve downloaded the Amazon Go app to their smartphones to walk into the stores, buy items, and pay for them all without interacting with any humans.

For Amazon, the question has been: “Could we push the boundaries of computer vision and machine learning to create a store where customers could simply take what they want and go?” For Philadelphia, the poorest of the country’s ten most populous cities, the answer was no. Nearly one-third of residents live below the poverty line. Those Philadelphians would not even be able to enter an Amazon Go store without downloading the app.

Cashless stores disadvantage low-income consumers who do not have bank accounts or credit cards, as well as people who do not have smartphones (they do exist). They disadvantage privacy-conscious individuals who don’t want Big Brother Amazon tracking every entry and exit from an Amazon Go store or every single purchase or consumers’ second thoughts (Amazon Go stores track the products a consumer picks up and puts back). About 25 percent of Americans still prefer cash, especially since digital transactions are not foolproof, as anyone caught up in a retailer’s data breach or a natural disaster without electricity can tell you.

The cashless model undoubtedly cuts down on shoplifting and robberies. But it oozes exclusion. The world’s largest online retailer wants to eliminate what remains of the human element of the brick-and-mortar shopping experience. Maximum speed also translates into minimal contact with certain humans.

Last year, the University of Pennsylvania took a modest food court (think Taco Bell) where African American neighborhood residents used to interact with budget-conscious Penn students, and turned it into a mostly cashless eatery with expensive local purveyors. A stroll through the space shows how transformation effectively pushed out many people who live in the gentrifying West Philadelphia neighborhood encircling the campus and students of modest means in favor of the wealthier, whiter members of the Penn community.

Amazon’s decision also staves off, at least in the short run, the elimination of millions of retail jobs. Steadily decreasing numbers of people work at retailers like CVS, Home Depot, and Walmart. If Amazon Go stores multiplied unchecked, roughly 2.3 million jobs could disappear into thin air. Amazon-owned Whole Foods is currently an exception to the do-the-work-yourself trend, but perhaps not for much longer.

Using cash also cuts down on opportunities for profit-driven data mining. Like the other tech giants, Amazon collects and analyzes a mind-numbing amount of personal information. A new report by the Democratic think tank Future Majority on the “hunter-gatherer” activities of the major web platforms found that the value of personal information gathered and used by Amazon totaled $2.4 billion in 2018 and is projected to jump to more than $9 billion by 2020.

Obviously, city officials can’t break up Amazon into its component parts. But they can signal to Amazon, to other corporations, and to Congress that cities have responsibilities to all of their residents, not just the ones who are wowed by the awesomeness of convenience. Communities may be finally realizing that they are literally giving away the store, and getting little in return.

But it’s ultimately up to Congress to decide how much Amazon is too much, especially since the company continues to seep into every pore of the American economy. Its latest concession on cashless stores is just a hiccup. Amazon is plowing ahead with a pilot offering that accepts customers’ SNAP food stamp benefits. Another Amazon program allows people to top up their online accounts with dollars at participating convenience stores and pharmacies. Its name? Amazon Cash.

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