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The Green Sheet Online Edition

June 14, 2010 • Issue 10:06:01

Why won't Apple take cash for iPads?

Apple Inc. outlets are reportedly refusing cash payments for the iPad, a policy that drew widespread attention after a woman in Palo Alto, Calif., was denied cash purchase of the corporation's newest gadget.

Apple is said to be accepting only credit and debit cards or personal checks for the iPad, and is limiting purchases of the item to two per customer. The policy is evidently meant to prevent the mass sale of iPads to consumers in certain countries overseas where the products carry much higher price tags.

Apple hasn't commented publicly on the matter, and it isn't clear whether the company intends to use consumer information for marketing purposes, or if it's just a method for controlling the illegal resale of iPads.

Apple and the law

Paul Stephens, Director of Policy and Advocacy for consumer advocate Privacy Rights Clearinghouse, called the policy "problematic," but added that Apple is within its rights to deny cash payments.

"I don't believe a merchant should put a consumer in a position where they're required to have a payment card to make a purchase," Stephens said.

"It's problematic from a consumer's standpoint. ... Some people choose not to use payment cards or checks because they want to stay off the radar screen and maintain their privacy."

Stephens added that he is "not aware of any laws that say you can't accept cash, and I don't believe [Apple] is doing it to collect your data" for research or advertising. "They're trying to limit sales and re-sales is my assumption," he said.

Indeed, the website of the United States Department of the Treasury states: "There is ... no federal statute mandating that a private business, a person or an organization accept currency or coins as payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a state law which says otherwise."

The decline of cash

Payment attorney Theodore Monroe theorized that Apple's policy represents the "rise of electronic payments and slow death of cash."

He agreed that Apple is probably operating within its legal rights, but added that he expected the company would use consumer information for marketing - a practice likely to draw ire.

"One way of looking at this is that Apple wants to know more and more about who it does business with and who is buying its product," Monroe said. "They're not even allowing gift cards, so they want to know the names of who they're doing business with. ... One would anticipate that Apple will use this information in the future as a marketing tool, and that to me is the real story."

Monroe added that Apple would have to comply with certain Federal Trade Commission rules to market to its consumers in such a way, that "the area of privacy is a developing one," and that he "will be surprised if someone brings a lawsuit over it." The Green Sheet, Inc.

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