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Unfair Sales Practices and Consumer Fraud

Questions & Answers

Question: Can a company refuse payment with cash? A new policy became effective stating they will only accept money orders, and credit/debit. i was advise if i take cash they will tell me to get a money order.


It is technically illegal to refuse legal tender (cash) for services already rendered, though it is not illegal to refuse it for services not yet rendered. Therefore, a business that accepts only checks or credit must post a notice indicating this, so that the customer is aware of the fact prior to making payment. According to the "Legal Tender Statute" (section 5103 of title 31 of the U.S. Code), "United States coins and currency (including Federal Reserve notes and circulating notes of Federal Reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues." This means that all U.S. money, as identified above, when tendered to a creditor legally satisfies a debt to the extent of the amount (face value) tendered.

However, no federal law requires that a person or an organization must accept currency or coins as payment for goods or services not yet provided. For example, a bus line may not allow payment of fares in pennies or dollar bills. Some movie theaters, convenience stores and gas stations as a matter of policy may refuse to accept large bills, such as above $20, and as long as there is a notice posted and a sale for goods or services has not already been completed, these businesses have not violated the legal tender law.

If the company has posted a notice about the new policy of only accepting money orders and credit/debit, they have fulfilled the requirement, and they are not required to accept cash for purchases. One advantage to the consumer in using a form of payment other than cash is that there will be a record of the payment made. For more information you can visit the Federal Reserve online.

February 26, 2007