No federal law requires businesses to accept cash payments

According to the Federal Reserve, private companies are not legally required to accept cash. They are free to develop their own policies, unless state law provides otherwise.

More and more companies are going cashless, i.e. no longer accept cash as a means of payment. Instead, customers shopping from these companies must use credit or debit cards, or some form of mobile payment like Apple Pay, to make purchases.

Some people on social media claim the cash ban is illegal. Many of the social media posts highlight a statement that appears on all U.S. fiat currencies stating, “This note is legal tender for all debt, public and private.” Social media users argue that purchases are debt, which is why businesses are legally required to accept their cash — or legal tender — as payment.

VERIFY viewer Tim says he came across a cashless takeaway during a recent trip to a local stadium and emailed our team to ask if it violated federal law.

THE QUESTION

Does federal law require businesses to accept cash?

THE SOURCES

THE ANSWER

That's wrong.

No, there is no federal law requiring businesses to accept cash. According to the Federal Reserve, private companies are “free to develop their own cash acceptance policies, except where a state law provides otherwise.”

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WHAT WE FOUND

According to the Federal Reserve, there is no federal law requiring a private company to accept cash as payment for goods or services. However, the US Treasury Department and the Federal Reserve both say that private companies are “free to develop their own cash acceptance policies, unless there is a state law dictating otherwise.”

Legal tender is defined in Title 31 of the United States Code. The law states that U.S. coin and currency is “legal tender for all debt, levies, taxes, and duties.” However, this means the cash is worth the amount it represents – it doesn’t mean a private company has to accept the cash.

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The Treasury Department says there’s a long history of companies restricting cash, such as For example, a bus route that may prohibit paying fares in change or dollar bills.

“Additionally, movie theaters, convenience stores and gas stations may refuse to accept large denomination currencies (usually $20 bills or more) for political reasons,” the Treasury Department said.

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Although there is no federal law requiring businesses to accept cash, recent attempts have been made to change this. The Payment Choice Act would require businesses with a nationwide physical store to take cash for transactions less than $2,000. The bill was folded into a defense bill and passed in the House of Representatives earlier this year, but it’s still awaiting action in the Senate.

Some cities and states, such as Washington, DC, San Francisco, and Colorado, also have laws requiring local shops with a store front to take cash, with some exceptions.

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Alley Einstein

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