Many people believe that any United States currency is legal tender for all debts. As we have moved headlong into a cashless economy, many businesses and some governmental agencies have adopted policies declaring that they will no longer accept cash as a payment. They will only accept checks, money orders or credit cards. Other businesses that still accept cash have put denominational limits on customers saying they will only accept currency notes or coins in denominations between $.10 and $20.00. Isn’t this illegal? The answer is, in fractional government doublespeak, yes and no. The pertinent portion of law that applies to this subject is the Coinage Act of 1965. It regulates and codifies all U.S. law on the subject of circulating coinage. Section 31 U.S.C. 5103, entitled “Legal tender,” which states:
“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…” At first reading this statute suggests that all types of United States money are a valid and legal tender of payment for debts whether public or private. There is no law, however, that requires a private business, person, or organization to accept currency or coins as payment for goods and services. 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.