New York State Enacts Cash Acceptance Law

Highlights

• With the signing of New York Senate Bill S4153A by Gov. Kathy Hochul, New York state has enacted a sweeping requirement for "retail establishments" and "food stores" to accept cash payments for in-person transactions.
• The law, effective 120 days from signing (anticipated March 20, 2026), also prohibits charging cash-paying customers more than those using other payment methods.

With the signing of New York Senate Bill S4153A by Gov. Kathy Hochul, New York state has enacted a sweeping requirement for "retail establishments" and "food stores" to accept cash payments for in-person transactions. The law, effective 120 days from signing (anticipated March 20, 2026), also prohibits charging cash-paying customers more than those using other payment methods.

Background and National Context

Recent nationwide disruptions in the supply of pennies have posed practical challenges for cash transactions, highlighting legal requirements for cash acceptance. (See Holland & Knight's previous alert, "Need a Penny? Too Bad: Legal Implications of the U.S. Penny Shortage," Oct. 29, 2025.) Several states and municipalities across the U.S. (including Delaware, Oregon, New York City, Philadelphia, San Francisco and Washington, D.C.) have laws that prohibit "cash discrimination" – charging cash payers more than customers paying with other methods. These laws effectively preclude "symmetrical rounding" (i.e., rounding down figures ending in 1, 2, 6 and 7 cents and rounding up figures ending in 3, 4, 8 and 9 cents). Despite retail industry clamoring for relief from these cash discrimination laws,¹ no national legislative fix appears forthcoming.²

Overview of New York Law on Cash Payments

New York's cash acceptance law passed the legislature in May 2025 but was not delivered to the governor until Nov. 17, 2025. The timing of this seems all the more remarkable in light of retailers' national outcry on rounding issues caused by the penny shortage.

The new law closely mirrors New York City's existing cash acceptance ordinance, extending similar compliance obligations statewide. The law applies broadly to businesses selling consumer commodities or providing services at retail, as well as any establishment offering food or beverages for sale to the public, including pushcarts, stands and vehicles. The definition of "retail establishment" is expansive, capturing a wide array of business models and transaction types, including any business selling, displaying or offering any article, good, merchandise or product sold for personal, household or family use.

Key Provisions

• Mandatory Cash Acceptance: All covered businesses must accept cash for in-person transactions, ensuring that consumers are not excluded from commerce due to payment method restrictions.
• Price Parity: The law prohibits charging higher prices to customers who pay with cash, including banning rounding practices that would result in cash users paying more than those using other payment methods.
• Exceptions: Businesses are not required to accept cash for bills over $20 or transactions conducted by telephone, mail or internet unless payment occurs on-premises. Note that provision of "reverse ATMs" that convert cash to a prepaid card constitutes compliance with the law, as long as the required deposit is $1 or less, no fees are charged on the card, and the funds never expire.³
• Missing Exceptions: Notably, the law does not explicitly exclude vending machines, parking facilities, live sporting events or rentals of consumer goods, which sets it apart from similar statutes in other jurisdictions.⁴ Because on-premises internet transactions are covered by the law, the treatment of bill payment and financial services kiosks under the law is ambiguous.
• No Private Right of Action: As is the case with the New York City cash acceptance law, there is no private right of action to enforce compliance.

Risks and Enforcement

Due to the breadth of coverage and lack of common exceptions, New York's cash acceptance law will be more difficult to comply with than other similar laws. Failure to comply with the law can result in civil penalties of up to $1,000 for a first violation and $1,500 for subsequent violations, enforced by the New York Department of State's Division of Consumer Protection. Enforcement actions may be triggered by consumer complaints or proactive investigations.

Conclusion and Recommendations

New York's cash acceptance law establishes a clear mandate for businesses to accept cash and treat cash-paying customers equitably. Though ongoing coin shortages may present operational challenges, these do not excuse noncompliance with state or local law. Businesses must promptly update payment policies, train staff and implement monitoring systems to ensure adherence to the new law.

Retailers and food sellers should conduct thorough compliance reviews, address any practical issues related to coin availability and maintain clear documentation of compliance efforts. Proactive engagement with regulatory authorities and prompt response to consumer complaints will help mitigate enforcement risks.

Footnotes

1 See, for example, "U.S. Penny Shortage Has Retailers Scrambling to Adapt Cash Transaction Policies," National Retail Federation, Oct. 29, 2025, and "Main Street Businesses Urge Swift Congressional Action to Prevent Penny Crisis," Retail Industry Leaders Association, Oct. 1, 2025.

2 The federal "Common Cents Act," which, in its original form, would have allowed nationwide symmetrical rounding, preempting state and local law remains mired in Congress. The U.S. Senate version, S.1525, has remained in the Committee on Financial Services since April 2025. The U.S. House of Representatives version, H.R.3074, advanced from the Committee on Financial Services without any rounding provisions.

3 The reverse ATM exception is effective only as long as the machine is operational. If the machine is not in service, the retailer must accept cash payments.

4 For instance, Oregon Revised Statutes § 659A.410 enumerates 21 separate exemptions to the state's cash acceptance law.

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