Paper receipt ban counterproductive, not needed

Assemblyman Phil Ting, D-San Francisco, introduced AB 161, which he says would be the first such law in the United States. His legislation quotes a Green America study that says paper receipts annually create “686 million pounds of waste and 12 billion pounds of carbon dioxide, the equivalent of one million cars on the road, and most paper receipts contain chemicals that would contaminate other recyclable paper materials.” The legislation says those chemicals also pose health risks.

The bill, which is in the Assembly Natural Resources Committee, would take effect in 2022. It would mandate that receipts for retail sales or services be provided only electronically unless the customer requested a paper version.

Businesses would be issued warnings for their first two violations. Fines of $25 a day would start with the third violation, capped at $300 annually. Those provisions are similar to California’s new law that bans full-service restaurants from providing plastic straws unless customers request them.

Many businesses already employ technology, including programs developed by Bay Area companies, that gives customers a choice among paper, email, text or no receipt. As rationale for the bill’s need, the legislation cites data from San Francisco-based Square that “sellers send over 10 million digital receipts each month.” However, that statistic also underscores how businesses have evolved to meet consumer preferences, making a mandate unnecessary.

The proposed law could be counterproductive. A global report by the cybersecurity firm Shape says more than 2.3 billion credentials — user names and passwords — were compromised by data breaches in 2017. Many such security breaches stem from flaws in customer payment systems.

The Shape report explains that retailers, financial institutions and other businesses must strive for the right balance between hard-core security and convenient access for customers. Against that backdrop, an unintended consequence of legislation such as AB 161 could be that it leads to increased hacking.

The legislation has other shortfalls, as well. One is inconvenience for other customers who must wait while the shopper ahead of them enters an email address, phone number and/or other personal information into a terminal. Not only is the one-fingered typing slow and often inaccurate so it must be repeated, but it also might be visible to prying eyes.

A greater concern is the cost for implementation. The transitional costs for large corporations to replace their existing systems would be significant. Many businesses, such as grocery stores, operate on thin margins. Any increase in overhead costs, even one that seems minimal to outsiders, threatens their competitive viability and ultimately their survivability.

And while many small businesses have been early adopters of electronic receipts, others depend on old-fashioned cash registers.

This costly, counterproductive mandate is unnecessary. Let consumers, not lawmakers, determine the need for electronic receipts.