In what cases can a business refuse to take cash?

Question

Printed on US currency you will find "THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE". Some businesses have refused to accept larger bills for a long time, as other forms of payment have become more popular, some refuse cash completely. In what cases can a business refuse to accept cash?

Possible duplicate of What forms of payment am I compelled to accept? — Nij, Dec 31 '16 at 02:41
That duplicate is also tagged [tag:united-states], and you are asking about something which is a subset of all payment methods, and covered by at least two of the answers there. — Nij, Dec 31 '16 at 04:29
Then we have these: http://money.stackexchange.com/questions/18791/, http://money.stackexchange.com/questions/482/. You're not asking a new question at all, just adding a new answer, which should have been done on one of the existing years-old questions. — Nij, Dec 31 '16 at 04:35
From question 482: "retailers are allowed to refuse any denomination of U.S. currency: ..." with reference. From question 18791: "Is it the case where this practice of accepting small bills and rejecting large bills is perfectly legal? Is yes." with reference to the page you have also used in your answer. Again: you're repeating a question that already exists just to have your answer on it as well. — Nij, Dec 31 '16 at 04:58
Cmments elsewhere demonstrate that this concern has already been raised and resolved. Further, the second answer deals exclusively with USA, and the third attempts to do so, too. — Nij, Dec 31 '16 at 05:02
That message means exactly what it says—cash is legal tender. Doesn't mean a business must accept it. ;) — user428517, Jan 02 '17 at 22:21

score 73 · Accepted Answer · answered Dec 30 '16 at 17:34

73

The Federal Reserve website notes that creditors must accept cash for debts on services already rendered, but that businesses may refuse cash for services not yet rendered unless prohibited by local law.

The Treasury website includes examples of businesses limiting what cash they will accept:

For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

answered Dec 30 '16 at 17:34

NL - Apologize to Monica

32,709
19
85
144

18

On this topic, it would be interesting to know whether there's established precedent for cases where the goods to be purchased have already been handled by the customer in a way that makes them difficult or impossible not to buy: for instance, gas already pumped, food already eaten, etc. Do these generally fall under debt for services already rendered? – R.. GitHub STOP HELPING ICE Dec 30 '16 at 20:48
3

@R.. Assuming you had permission to eat the food or pump the gas before paying, then it seems they would have to accept any type of cash for payment. If you didn't have permission (think eating in a grocery store versus a restaurant), then you could probably still pay for it with a big bill, but maybe you could get in trouble for destruction of property or something like that? Also, I wonder if they are obligated to make change, especially on the spot? – Kat Dec 30 '16 at 23:37
7

@R.. They just need to make it known they don't accept cash PRIOR to the transaction taking place. "Neither 31 U.S.C. Sec. 5103 nor any other federal law requires that a private business, organization or person accept cash in exchange for goods or services." ~http://www.expertlaw.com/library/consumer-protection/it-legal-refuse-cash-payment – BobbyScon Dec 30 '16 at 23:59
3

@R.. All the gas pumps I use will not allow you to pump anything until some form of payment has been verified. The stations do accept cash, but you must go inside and pay before pumping. Otherwise, you need to provide your debit/credit/whatever card at the pump before pumping. You have a point about food, though. – jpmc26 Dec 31 '16 at 10:21
In a restaurant you don't purchase food that you've already eaten - that wouldn't make sense since eaten food isn't saleable. You purchase food in advance, becoming indebted to the restaurant in the process, eat it, get the bill and settle your debt by paying. – bdsl Jan 02 '17 at 11:53
@jpmc26 I think they're becoming less common now, but I have seen the occasional gas pump that will let you pump first, then go inside and pay with cash or card. That kind of pump is a drive-off risk, though, which I'm sure is why they aren't common. – senschen Jan 02 '17 at 12:00
I wasn't thinking of a restaurant in asking the question, but rather situations like a grocery or convenience store where customers, knowing they have the funds to make payment and that the goods are for sale, will often open and begin consuming them before finishing checking out. Situations where goods have been damaged unintentionally by knocking them over, spilling something on them, etc. (possibly while they're already in a cart for purchase) seem related too. – R.. GitHub STOP HELPING ICE Jan 02 '17 at 23:22
Regarding gas pumps, decades ago it used to be that you could pump and pay cash without pre-paying. I don't know anywhere that lets you do that anymore, so perhaps the gas pump case is of purely historical interest. – R.. GitHub STOP HELPING ICE Jan 02 '17 at 23:25
@R.. I once was driving home from a casino and came upon a toll which was 30 cents. I had 11 cents in change, and a hundred dollar bill. I first offered the $100 bill and she asked if I had anything else so I said I had 11 cents, and she choose to take the 11 cents and let me through instead of taking the legal tender. (And there were no other cars waiting...) – TTT Feb 14 '17 at 00:35
@R.. I can tell you a place where you can fill up with petrol first and then pay in cash. It’s the United Kingdom. Most (though not all) petrol stations will let you do just that, though of course they have CCTV to catch defaulters. – Mike Scott Sep 28 '19 at 18:30

score 19 · Answer 2 · answered Dec 30 '16 at 17:34

19

You have to take legal tender to settle a debt. If your business model doesn't involve the customer incurring a debt that is then settled, you don't have to take cash. For example, in a restaurant where you pay after eating, you can insist on paying cash, because you're settling a debt. But in McDonald's they can refuse your cash at the counter, because you've not received your food yet and so no debt has been incurred.

answered Dec 30 '16 at 17:34

Mike Scott

23,450
2
65
77

10

What are your sources? – tar Dec 30 '16 at 19:04
15

Just to be nit picky: A restaurant can refuse cash if they establish before the order is placed that cash is not an accepted form of payment. For instance in that annoyingly small print that's used on menus like where CCs aren't accepted but nobody tells you ahead of time and you have to run down the street to find an ATM while your date sits alone... – BobbyScon Dec 30 '16 at 19:30
Your argument is plausible in light of statements elsewhere here about cash being legal for settling already-incurred debts, but it would be good to see reputable sources of legal information confirming this (e.g., court cases where a merchant was actually forced to accept the cash). – BrenBarn Dec 30 '16 at 22:42
@tar I'm not exactly sure how you write a citation for text that is on currency. Is the author the government or the federal reserce? Do I cite the serial number of the bill? What year to use? Does cash have an ISBN number? – Harper - Reinstate Monica Dec 30 '16 at 22:57
1

@BobbyScon are you sure about that? Refusing credit cards is different than refusing cash. I doubt they could force you to pay with another method. – Kat Dec 30 '16 at 23:39
@Kat - as long as they make it known before you receive your goods or services, they do not need to accept cash. – BobbyScon Dec 30 '16 at 23:40
@BobbyScon have a source to back that up? I really doubt they could get you arrested for walking out in a bill if you offer to pay in cash and they refuse. – Kat Dec 30 '16 at 23:43
2

@Kat - Find a source to prove me wrong and I'll be happy to recant. This link states that private business are free to do as the please, essentially. https://www.treasury.gov/resource-center/faqs/Currency/Pages/legal-tender.aspx – BobbyScon Dec 30 '16 at 23:48
@Kat - Do a google search for restaurants that don't accept cash. There are quite a few such as TRU Deli & Wine in Chapel Hill, North Carolina. – BobbyScon Dec 30 '16 at 23:50
2

@BobbyScon no, that says it applies to debts, not for goods and services that haven't been sold yet. A meal that's been eaten is a debt, and so the bit about being legal tender for all debts, public or private should apply. – Kat Dec 30 '16 at 23:50
Let us continue this discussion in chat. – BobbyScon Dec 30 '16 at 23:53
1

@BobbyScon just because restaurants have policies doesn't make them legal. Has anyone ever gotten into legal trouble for eating there and refusing to pay with something besides cash after the fact? I doubt it. – Kat Dec 30 '16 at 23:53
2

I just bought gas at a costco. The pump would not activate until I swiped my card, and I filled up. Only when I was leaving did I notice a sign, "For your safety, we do not accept cash." Yet, inside the store, they do. I can only imagine a Dave Ramsey fan's look of surprise to find that not only isn't cash king at that gas station, but it's not even welcome. – JTP - Apologise to Monica Dec 31 '16 at 03:46
2

@Kat "just because restaurants have policies doesn't make them legal" - Exactly. Most credit card processors prohibit requiring a minimum charge, and many jurisdictions prohibit charging an additional fee for the use of a credit card, but businesses routinely violate these rules. – Kevin Krumwiede Dec 31 '16 at 04:48

score 13 · Answer 3 · answered Dec 31 '16 at 06:27

They don't have to take cash if they reasonably told you in advance they don't take cash, because they made fair effort to prevent you from incurring a debt.

They don't have to take cash if the transaction hasn't yet happened (not a debt) or if it can be easily undone at no cost to either party - such as a newspaper subscription they can just stop delivering.

Both of these reasons are limited by the rules against discrimination, see below.

They don't have to take cash if it's impracticable. For instance a transit bus when fares first went to $1.00, it took years to fund new fareboxes able to take paper money. You don't have to take a mortgage payment in pennies. Liquor stores don't have to take $100 bills. (it requires them to keep too much change in the till, which makes them a robbery target).

Trouble arises when it appears there's an ulterior motive for the rule. Suppose a Landlord Jim requires rent to be paid with EFT. Rent-controlled Marcie tells the judge "It's a scheme to oust me, he knows I'm unbanked". Jim counters "No. I got mugged last month because criminals know when I collect cash rents." It will turn on whether Jim can show good-faith effort to work with his unbanked tenants to find other ways to pay. If Jim does a particularly bad job of this, he could find himself paying Marcie's legal bills!

Even worse if the ulterior motive is discrimination. Chet the plumber hates Muslims. Alice the feed supplier hates the Amish. So they decide to take credit cards only, knowing those people's religions don't allow them. Their goose is cooked once they can't show any other reasonable reason to refuse cash.

score 5 · Answer 4 · answered Dec 30 '16 at 20:35

5

Apartment complexes have had a long history of not accepting cash for payment of rent. This eliminates the problem of robbery and strongly reduces the risks of embezzlement.

THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE

Article 1, Section 10 of the US Constitution states:

No State shall ... make any Thing but gold and silver Coin a Tender in Payment of Debts

Previous editions of banknotes stated that the notes were redeemable in gold or in lawful money. The Mint Act of 1792 set gold and silver as legal currency (and that one did not have to accept "base metal coins" for more than $10 which is why coin rolls only go up to $10). The Coinage Act of 1873 dropped silver and made gold the legal standard for currency. In 1933, the "redeemable in gold" was changed by federal statute and the legend you mention was added. Prior to 1933, someone could demand that you pay them in gold and not with a bank note. Legislation in 1933 ended that. This clause in the Constitution leads some political groups to wish to return to a gold standard. I recommend reading the book Greenback as it describes how our currency got the way it did and why that clause appears on currency.

answered Dec 30 '16 at 20:35

Tangurena

1,224
10
11

Regarding apartment complexes, they may not like it but they have to accept cash in the end. Just keep copies of your letters stating that you are willing to pay in cash and their responses (e.g., refusal and policy statements on why they don't accept cash) and the case will be thrown out when they try to evict you. – DepressedDaniel Dec 30 '16 at 21:22
4

Key word in the Constitution: "no State". California can't make California Florins a legal tender, but it puts no such restriction on the federal government. – Mark Dec 30 '16 at 21:53
4

There was a state court judge that ruled on this. A criminal defendant argued that a judge cannot require that the state pay the fine in anything except gold or silver. The judge agreed and required the defendant to buy $20 gold coins from the Mint. The Mint was selling them for $1500 per coin at the time. He effectively multiplied his fine by 75 times its original amount. You can get gold coins from the US government, but to spend them at $20 per coin, the statutory price of an ounce of gold, would be insane. Nobody really wants to push that point. – Dave Harris Dec 30 '16 at 23:12
4

@user25459 That sounds too much like a chain letter story. Is that actually true? – user2752467 Dec 31 '16 at 00:45
@DepressedDaniel I don't believe this is supported by federal law. Assuming that the rental agreement laid out the acceptable methods of payment, the tenant would be bound by those terms. State laws may vary on this topic. – Rich Seviora Dec 31 '16 at 01:07
@RichardSeviora If the contract specified payment by cheque, then technically speaking the tenant would be in breach of contract. However, it's only a minor breach since the tenant is willing to pay the owed sum in cash. The only effect of the contractual clause would be that the landlord could get some damages if he could show that he incurred additional business expenses to process tenant's payment in cash versus cheque. Since there really aren't any quantifiable expenses related to accepting cash payments, the no-cash clause doesn't buy the landlord any enforceable advantages. – DepressedDaniel Dec 31 '16 at 01:16
@justinlardinois its been too many years. It was a pre-internet article, so it was probably news. I only noticed due to the nature of my employment and it stuck. I wouldnt even have clue how to hunt its veracity at this point. – Dave Harris Dec 31 '16 at 01:31
@DepressedDaniel I imagine that may not hold true for all states and/or cities. As an example, Ontario (province of Canada) is quite specific that the method of payment must be rendered in the manner agreed to by both parties. Process document here Therefore, a tenant could conceivably be evicted for failing to pay the rent in the amount and manner arranged. But it's not likely to get there. – Rich Seviora Dec 31 '16 at 01:35
I suppose the operators may nominate a bank account as the place for you to pay if they personally do not want to handle cash. However if they send a debt collector, s/he must accept cash – Jasen Dec 31 '16 at 02:33

score 2 · Answer 5 · edited Dec 31 '16 at 00:59

A business can refuse cash (paper currency) payment pretty much in all cases provided it's a reasonable policy and/or notified during/in advance of contracting. Details in this link.

"all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, 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."

Even if the payment is being made to settle a debt or other obligation, the creditor may refuse payment if their rationale is reasonable (as determined by the courts).

In what cases can a business refuse to take cash?

5 Answers5