Amazon Go doesn’t want to leave cash on the table


In the face of growing criticism that cashless retail technology will leave a big portion of the consumer population in the U.S. behind, Amazon.com has revealed that it plans to allow customers who shop at its Amazon Go stores to pay with cash.
Steve Kessel, senior vice president of physical stores at Amazon, announced to employees in an all-hands meeting last month that the company is planning additional payment options at Amazon Go stores, according to CNBC. The announcement came in response to concerns that there is an element of “discrimination and elitism” to be found in Just Walk Out technology. The technology as it is currently deployed requires shoppers to have a smartphone associated with a credit card or bank account that can be automatically billed upon leaving the store. This prevents those without access to such financial products — a population made up disproportionately of immigrants, minorities and lower-income people — from shopping there.
The move appears to mark a turnaround in Amazon’s stance on compulsory cashlessness.
Earlier in the year, the tech giant went as far as to threaten to not bring Amazon Go to Philadelphia if the city went through with its plan to ban cash-free stores. Philadelphia’s ban on cashless stores passed in March, making it the first city to do so. (In Massachusetts, it is state law that businesses must accept cash.)
It’s not clear exactly how Amazon will facilitate cash payment in the fully-automated stores, although it has taken steps to let cash-only customers use its services before. Last year, the e-tailer launched Amazon Cash. The app allows users to visit participating physical retailers like Speedway and CVS and deposit cash into an Amazon account so that the funds may be used to shop on Amazon.com.
Being able to spend cash might appeal to more than those with special economic situations. In October 2017, Shake Shack piloted a Lower Manhattan location that did not accept cash. Customers complained of the lack of the human element and limitations to the automated ordering. Shake Shack discontinued the pilot less than a year later.
- Amazon exec tells employees that Go stores will start accepting cash to address ‘discrimination’ concerns – CNBC
- Will other cities follow Philly in banning cashless stores? – RetailWire
- Can Amazon Cash open e-commerce up to millions of underbanked consumers? – RetailWire
- Shake Shack ends cashless experiment – RetailWire
DISCUSSION QUESTIONS: Do you think that Amazon will be able to facilitate cash payments in a way that makes Amazon Go appealing to unbanked and underbanked consumers? What lessons do you think other retailers experimenting with cashless concepts will learn from Amazon’s experience?
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23 Comments on "Amazon Go doesn’t want to leave cash on the table"
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Founder, CEO & Author, HeadCount Corporation
This completely changes the game for Amazon Go. The entire point of Go was to provide a cashier-less experience – to remove the need to stand in line to pay/check out. Given this recent announcement – and the public backlash, Amazon can find a way to take cash, but it defeats the point of the concept. The key learning for retailers is, be very mindful of the potential negative public reaction to ideas that may exclude some people. Even the mighty Amazon couldn’t get past this one.
Senior Vice President, Dechert-Hampe (retired)
This seems more an issue of principle than practical application. It’s hard to believe Amazon Go shoppers are “bankless” unless by choice. Adding the cost burden of accepting and handling cash — even though Amazon will no doubt do it in some unique automated fashion that improves the efficiency — still seems like a very expensive PR strategy.
Principal, Retail Technology Group
Whether Amazon Go appeals to the unbanked and underbanked consumer will very much depend on how much Amazon Go advertises within that demographic and in what neighborhoods it operates its stores.
LoyaltyCIO, Client Service Associates
If they are wise they will accept cash at their “retail” locations, save the cash balance on account for the customer and then allow in-store and online shopping for those without digital payment accounts.
Chief Executive Officer, The TSi Company
Principal, Cathy Hotka & Associates
This is a blessing in disguise for Amazon; there’s just no disputing that the human element is important, and disenfranchising young people and our less affluent neighbors wasn’t a good look. This will wind up being a win for them.
President, Second To None
Amazon’s change of heart and pivot to allow cash purchases is a lesson for all consumer-facing brands: If you wish to be relevant, you must do everything in your power to reduce friction, inconvenience and customer effort. Creating barriers around the purchase process will quickly result in consumers taking their spend to the competition.
President, Integrated Marketing Solutions
Amazon does not make all of the rules. If Amazon wants to expand stores, it has to find an efficient way to deal with cash. Some of the issues are real and some are perceived. This is one case where Amazon could learn a great deal from Walmart and the many ways it has adapted to customer payments. Walmart is well on the way to becoming a national bank — and they have many ways of accepting customer payments … including cash.
Managing Director, GlobalData
Introducing cash payments makes the Amazon Go concept less efficient for the company. As well as staffing costs, there are the other expenses associated with cash handling that will need to be absorbed. But for consumers who don’t wish to pay with cash, the frictionless experience will remain unchanged.
In terms of the impact on trade, given the locations and targeting of the stores, I’d question how many consumers with only the means to pay in cash they’d attract. So I can’t see this move expanding the reach dramatically.
Principal, KIZER & BENDER Speaking
Neil, you nailed it!
Principal, Your Retail Authority, LLC
Absolutely! Now if the food in the Go stores is extraordinary and everyone is clamoring for it, that is another thing. Then they may be discriminating, so to speak. But right now, the attraction to the store is the fast, easy process of grab and go. It is about a brand experience, and that experience depends on cashless. It is no longer that experience when cash is introduced and they become just another convenience store. For my 2 cents.
Founder, CEO, Black Monk Consulting
This really isn’t too tough. Going cashless is a PR misstep, especially for a company run by the world’s richest man. The fix? Oh, I don’t know … vending machines, parking lots and all kinds of other folks seem to have worked the bugs out of cash acceptance … why can’t retail? Going cashless today just isn’t the right hill for Amazon to die on this year. In five years, who knows? Eventually the society will move toward a “no cash” model, but until then the politics are a little dicey.
Professor of Food Marketing, Haub School of Business, Saint Joseph's University
Amazon will figure it out. In addition, to the negative PR it received for its cashless concepts, economics will come into play. There are almost 40 million Americans using SNAP and WIC benefits (more than the entire population of Canada). Even with EBT options available to them this population may have felt neglected by a cashless enterprise. No longer.
Director of Planning & Loyalty, Moosylvania
This is a very tricky debate. The unintended discrimination argument is valid, but no one ever chastises e-commerce sites for not accepting cash…because that’s just the way that specific channel needs to work. Why not let a cashless retail channel exist as well? The market will adapt as there will always be companies who are more than willing to pick up the sales from customers who feel ostracized.
President, Protonik
Even though the futurists have told us “cashless is the future,” we know they haven’t been accurate very often. So this really isn’t a surprise. And it gives us more evidence that Amazon is becoming serious about finally becoming profitable on their 50 percent of revenue that is retail.
Chief Amazement Officer, Shepard Presentations, LLC
I like that Amazon is addressing a part of the consumer population that doesn’t go “cashless.” I have different ideas of how this would work. Their focus has always been on making the experience convenient for their customers. Is it as simple as loading cash onto an Amazon app? That’s a good place to start. It will be interesting to see Amazon’s solution.
Retail Transformation Thought Leader, Advisor, & Strategist
President, Humetrics
I think the question asked is wrong. It should read, “Does Amazon really care if it does not appeal to the unbanked or people who want to use cash?”
I think the answer is no. Yes, they will find a way to serve customers who want to pay with cash. They will not go out of the way to make it easy. They will comply with the law.
President, b2b Solutions, LLC
The change in Amazon Go’s stance allows the customers to choose how they want to pay. As has been pointed out, some may elect to use cash even though they have a debit or credit card. Allowing customers this choice may create a lesser “wow” factor for Amazon Go, but it opens their shopping experience to more customers.
VP of Advertising | Buy Box Experts
In Jeff Bezos’s letter to shareholders that was published today, he specifically mentions Amazon Go as an example of “imagining the impossible” and accomplishing it by creating a cashierless store, thereby removing the pain point of waiting in lines. Whether or not they are accepting cash on principle or necessity, I believe Amazon will continue to find its own way to do the impossible and preserve the concept of a cashierless store and still accept cash.
Marketing Strategy Lead - Retail, Travel & Distribution, Verizon
For locations that require retailers to accept cash, Amazon can figure out a way to do it. However, it will be an option that is available only in the markets that dictate it.
It will be tricky for Amazon to do, as it is more than accepting cash, if you assume that the bank-less consumers also don’t have a smart phone. Entrance to Amazon Go today is dependent on an app on the consumer’s smart phone. If it gets too cumbersome to accommodate cashless customers, Amazon may choose not to open their Go stores in those markets.
LoyaltyCIO, Client Service Associates
When you imagine the Amazon Go store is just a giant vending machine it becomes easy to understand why accepting only digital payments is a non-starter, even without the regulations It’s just too easy to accept cash in a machine and save the cash balance on account for the customer. Kiosks are already doing this in micro markets all over the country. Kiosk and smartphone based micro markets are appearing in more locations replacing traditional vending machines. Most of these micro markets accept cash and manage the customer’s balance on account.
Scientific Advisor Kantar Retail; Adjunct Ehrenberg-Bass; Shopper Scientist LLC
I use cash without a cashier at Costco all the time. What’s the big deal? It doesn’t take a “cashier” to take cash — the bank and ATMs work like this.