Cash at Amazon Go: How this digital reversal could be a boon

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Amazon Go is caving to rising pressure from cities and states banning cashless stores and planning to introduce cash-acceptance to a model whose entire premise was about eliminating the friction of checkout with a seamless, card-based checkout.

The decision may turn out to be a benefit for Amazon, resulting in a cash-reload network that could become a gateway to its e-commerce empire. This would solve another growing problem for marginalized cash users, as more brick-and-mortar stores close.

“We are working to accept cash at Amazon Go. Paying cash at Amazon Go will work as you would expect: You’ll check out, pay with cash, and then get your change,” an Amazon spokesperson said in an emailed statement. CNBC first reported the move, leaked from a company meeting.

Amazon did not explain how it will factor cash acceptance into its stores, which are designed to register customers by scanning a mobile app at a turnstile, then tracking their purchases as they go through the store. Amazon Go charges these sales to a card on file when the store detects the customer has left.

Observers expect Amazon Go will add a work-around for customers who want to pay with cash that won’t interfere with the core concept.

“Amazon Go is based on the ‘just walk out’ idea, so cash-paying customers likely will check in like any other shopper via the app, but they’ll select ‘cash’ and walk to a kiosk at the side where they can preload cash to cover their purchases in advance,” said Richard Crone, a principal with Crone Consulting LLC.

The effect could be that Amazon Go's cash-centric customers will end up storing cash within the Amazon Go app for future use at those stores or for shopping online with Amazon, Crone theorizes.

“Using machines probably from the same companies that make ATMs, Amazon Go could create its own national cash-reload network along the lines of what Walmart and PayPal and Western Union have done at stores,” Crone said.

This could provide relief for cash-centric customers whose brick-and-mortar shopping options are narrowing, with more widespread closures of chains like Payless ShoeSource.

Amazon reportedly plans to open up to 3,000 Amazon Go stores in the next two years, primarily in high-traffic areas where quick checkouts are in high demand. Many other retailers, such as the sweetgreen restaurant chain, eschew cash in a more traditional retail model.

The growing number of restaurants moving to a cashless model for efficiency drew the ire of lawmakers in various jurisdictions from New York to California.

For Amazon Go, these laws created a dilemma that looked like it could thwart its expansion. For example, a new law in New Jersey went into effect last month banning cashless businesses, and Amazon operates a cashless bookstore in Paramus, N.J.

The Paramus law likely was a catalyst in Amazon’s decision to broadly integrate cash at its other brick-and-mortar stores.

Amazon didn’t provide a timeline for when it will roll out its cash-acceptance solution at the handful of existing Amazon Go stores, but Crone expects the news will trigger other industry effects.

“Amazon Go is changing the way retailers handle check-in — to monitor customers’ purchase decisions — and speeding up checkout," Crone said. "Other stores and restaurants are going to take notice, opening up a new channel for the NCRs, Diebold Nixdorfs, Toshibas and other equipment makers that are already developing cashierless checkout solutions with a cash element.”

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