Cash may be losing ground to digital payments, but Illinois is betting it still deserves a place at the checkout counter. The state has passed the Retail Cash Payment Act, requiring businesses to accept cash for retail transactions under $500 and prohibiting them from posting signs stating they don’t accept cash. The measure is the latest populist effort in a state that has become a battleground over merchant payment policies.
The law, which takes effect in 2028, includes several exceptions designed to ease the burden on businesses. The cash-acceptance requirement does not apply to self-checkout machines, overnight sales, membership-only businesses, or phone and online purchases. Businesses also aren’t required to accept bills larger than $20, and they are exempt when payment processing equipment is inoperable.
The law applies only to retail transactions and does not affect payments made to local governments.
Businesses that fail to comply will be subject to fines, although enforcement has proved challenging in states with similar laws. When Colorado Governor Jared Polis signed that state’s cash-acceptance law in 2021, he cautioned that it would be difficult to enforce. An investigative reporter in Denver later found no instances of businesses being fined for violating the law.
Merchant Opposition
Merchant groups opposed the legislation, arguing that retailers—not the government—should decide which forms of payment to accept and whether limiting payment options is worth the risk of losing customers. As Illinois Retail Merchants Association President and CEO Rob Karr told the State Journal-Register, retailers should be free to decide whether accepting only certain forms of payment is worth the possibility of losing business.
Beyond that principle, retailers also argue that handling cash creates operational costs and security burdens that may not be immediately apparent. Cash has to be counted, transported, secured, and deposited, creating additional labor and increasing the risk of theft and human error.
“Merchants operating in a cashless model don’t need to worry about securing cash when they’re away from the counter or store, depositing cash, etc.,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “Customers like to pay digitally, and the business owner gets to run their business much more efficiently without having to deal with cash. That efficiency is exactly the value that business owners get in exchange for the card fees they pay.”
Battles Over Card Fees
The cash law is just the latest front in Illinois’ broader fight over payment policy. In 2024, the state enacted the Interchange Fee Prohibition Act, which would bar interchange fees from being charged on the tax and tip portions of card transactions. The law had been scheduled to take effect on July 1 but has since been delayed until July 1, 2027, as litigation and implementation concerns continue.
