By Bob Sullivan
Being jammed into a plane for 10 hours can certainly feel like being stuck in a foreign country. But that's not the reason Michael Rosen's U.S. dollars were rejected on a recent flight from Hawaii to New York.? As many travelers know, dollars ? the physical kind ? are useless once you board an airplane in most cases. You'll need plastic to buy a headset, a drink or a snack. Rosen, a New Jersey lawyer, thinks that's discrimination, so he's filed a lawsuit aimed at forcing airlines to treat greenbacks, and consumers who carry them, with more respect.
A New Jersey state judge will hear arguments Friday to decide whether the case has any merit. Rosen is likely to get support from consumers who seem lodged in an endless battle with the airline industry, but he faces an uphill battle in court.
The case began with a situation that captures a typical traveler's nightmare: stuck on a 10-hour flight with no form of distraction and no way to buy a drink or a snack. Rosen's attorney, Nathan Kittner, said Rosen few from New York to Hawaii on Continental Airlines last year and purchased a headset with plastic. He was told the headset would work on all future Continental flights. So when he boarded his return flight, he checked his credit cards in his luggage and took the headset with him. He got bad news as soon as he sat in his chair.
"It wasn't compatible with that airplane," Kittner said. "Now he's stuck for 10 hours." Rosen tried to pay $3 in cash to get a new headset, but the flight attendant wouldn't budge. No cash.
"This is not a small thing," Kittner said. "It was a very long flight."
Most airlines went to cash-free cabins two years ago. Kittner thinks it's just another example of the industry forcing consumers to suffer through poor service.
"They feel like the airline deregulation act gives them enough authority to make their own rules," he said. "It doesn't seem they should be allowed to tell a passenger, 'Sorry, we can't take cash.' "
There are practical reasons airlines don't want to handle coins and bills at 30,000 feet. Flight attendants hate making change, and cash accounting is a hassle.
"But that shouldn?t be the consumers? problem; that's their problem," Kittner said. "We hope to send a message to the airlines."
Rosen's case includes several claims ? Kittner thinks Continental broke a contract with his client when the initial headset failed to work on the second flight, for example. The lawsuit also alleges false advertising and violations of the New Jersey Consumer Fraud Act.
On Friday, an Essex County judge will hear arguments on Continental?s motion to dismiss the case. Continental didn't immediately respond to a request for comment.
But the case raises important larger issues. Should consumers who don't have credit cards be barred from in-flight purchases? Some don't hold plastic for philosophical reasons; others may have poor credit and have been denied credit cards.
The airlines are engaging in "unlawful discrimination against individuals who do not physically possess a debit or credit card," the lawsuit claims, according to North Jersey News.
Consumers who use cash already face some tough treatment.? Paying in cash can cause added fees to kick in (see "Paying cash? That'll cost extra"). As firms experiment with blossoming new alternative payment mechanisms, such as cell phone payment, the potential for even more discriminatory policies will only increase. Starbucks, for example, now employs a smartphone payment system that serves as a digital gift card for iPhone and Android users. What if Starbucks began refusing all other payment mechanisms? What if other stores began requiring payment through Google's Android phone? That's farcical, of course, because market forces wouldn?t allow it; consumers would just spend their money at the nearest competitor's coffee shop. Few businesses can afford to turn down money.
But this competitive element makes the airline situation unique, Kittner argued. Consumers who don't like Continental's cashless cabins can't exactly get off the plane and spend their dollars at a competitor.
"You are pretty much a captive audience on the plane," he said.
The basic argument against cashless cabins is one you've probably already heard: that "U.S. coins and currency are legal tender for all debts, public charges, taxes, and dues." The language comes from the Coinage Act of 1965, but it has roots that reach back much further in dollar history.
The clause seems to indicate that someone owed a debt must accept greenbacks as payment. The Treasury Department, however, says otherwise ? and with a clarity rarely found in U.S. regulations.
"There is ... no federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services," Treasury says on its website. "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.?
There are plenty of situations in which private businesses ? and even government entities ? dictate the way consumers can pay. Businesses can refuse to accept bills that are larger than $20, for example. Buses can accept only change for automatic fare collection machines. Plenty of parking garages or rental facilities require credit card payment.
Of course, the Treasury's clear-cut policy may not prevent a New Jersey state judge from finding a violation of the state's consumer protection law ? or at least entertaining the larger case ? and any kind of victory for Rosen may force airlines to reconsider their policies. He?s considering filing a class-action lawsuit over the cash-in-cabin policies.
At a minimum, the legal battle might inspire airlines to give flight attendants a little more flexibility when dealing with petty cash issues.
"All they had to do was be a mensch about it ? say, 'We see you already bought a headset. Here's another one.' And this all could have been avoided," Kittner said.
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