Can a business legally go cashless?

HENDERSON, Ky. (WEHT) – “We do not accept cash.” That is a sign consumers see often.

America is moving toward a cashless society, but there are still a lot of people who use dollar bills and coins. However, those people are finding an increasing number of businesses, government offices and other locations that are requiring plastic for a purchase, but can those places legally refuse cash as a payment?

Can a business refuse to accept cash?

According to Jacob P. Byl, JD, PhD, who is Assistant Professor of Economics at Western Kentucky University (WKU), there is no federal law requiring retailers to accept cash, so—at least under federal law—private businesses can choose whether to accept cash for goods and services.

Why is it legal?

Dr. Byl says the note on U.S. currency says it’s legal tender for all debts, public and private, but there is no Act or US Treasury regulation that requires private businesses to accept cash in exchange for a good or service.

Conclusion

According to Dr. Byl, some states, like New Jersey and Massachusetts, and municipalities, like New York City, have passed laws requiring retailers to accept cash. There has been a movement to expand that list, with bills introduced in states like Kentucky and Tennessee that would require retailers to accept cash. A lot of the motivation for those bills has been an equity concern that lower-income, unbanked households are unable to access goods and services because they don’t have the bank accounts and cards needed for a cashless society. But others just prefer the tangible, old-school feel of using bills and coins.

Dr. Byl says a lot of the pushback against these bills is from the business community, which wants to have flexibility about how to accept payment at their parking garage, concession stand or convenience store. Some want to avoid the time, hassle and risk that come with cash, even if it means paying a service fee to card companies.

In conclusion, most of the time, it’s legal to go cashless and refuse to accept physical cash. However, the rules might vary depending on where someone goes in the country.

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