your money is full of lies!

You know that part that says "this note is legal tender for all debts, public and private"?

The pertinent portion of law is the Coinage Act of 1965, specifically 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."

This statute means that 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. 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. 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.

It's shocking, really; if that part isn't true, how are we to believe the "in god we trust" part?


28 Responses:

  1. dossy says:

    "In God we trust ... all others pay cash."

  2. _nicolai_ says:

    I'm not quite seeing your problem. The law is that one cannot refuse the money as payment of a debt, meaning one cannot shaft the debtor by making up reasons to refuse their repayment of the debt. That seems pretty clear to me, annoying though it might be to have one's cash declined.
    So if one wants to pay cash to an unwilling recipient, one should ensure one structures the payment as a debt (eg, by buying the goods or service on credit, then paying off that debt in cash), etc.
    What happens when one buys, say, a movie ticket for $20+tax and offers them a $20 bill and a $100 bill, I'm not sure, since the $100 is for the tax.... I suspect such a contrived situation would be slapped down by an annoyed judge.

    • stolzenberg says:

      They would give you your twenty back, plus the change for the hundred. It's the same thing as giving change.

      What I don't understand is why someone would pay twenty dollars for a fucking movie ticket.

    • violentbloom says:

      Except of course my at&t contract strictly states that cash is not accepted for payment.
      So they can in fact refuse it as payment. Or at least they are.

  3. mcfnord says:

    recently i found these crazy links about the dollar:

      Most people associate the noun "dollar" with the Federal Reserve Note ("FRN") "dollar bill," engraved with the portrait of President George Washington. This association is mistaken.
  4. In Australia, not only are businesses and individuals not obligated to accept large amounts of coins as payment, it's technically not legal tender if the amount of coin offered is more than what you receive in a single roll of coins. For example, is someone tried to pay for a $2.50 item all in 5c pieces, that would not be legal tender, because a roll of 5c pieces is $2 worth of them.

    Of course, businesses can choose to accept it - after all, why go to the bank if you can get it from the person on the other side of the counter? They're well within their rights to refuse it though.

    • gwillen says:

      Uhm. I like the idea, but (after reading the side) the specific implementation is basically criminal. I'm not talking about legal tender laws, I don't give a shit about those... but taking $14 or so worth of silver, stamping "20" on it, and trying to spend it without explanation of the insane value discount, is ethically nondefensible.

  5. amarshwren says:

    I assume JWZ's interest in this matter was sparked by Apple's recent announcement they would no longer accept cash for iPhone purchases at their retail stores. I'm glad he looked this up, I had similar questions. I mean, who would refuse *cash* and take a 2~3% hit on the credit card transaction?

    • bdu says:

      I was in an apple store on Wednesday handing my MBP over to the "genius" for service... there was a line out the back of the store full of people there waiting to pay cash for an iPhone. I'm not sure why, but I think there's an interesting story behind all this somewhere.

    • westyx says:

      Happened when I went to pay the deposit for my car.

      The business prefers cc because having large amounts of cash around is bad securitywise, and it's harder to stop the employees from stealing it, or so I was told.

      • amarshwren says:

        Yeah, but that's what cashier's checks, etc. are for. Not that I intended to buy an iPhone with cash (I need the miles) but... it does make me think twice now.

    • aris1234 says:

      I'll bet it is so they can track you down if you hack the phone and use it on a different network. I'll also bet there is a EULA which says you can't do that. Apple make $$$ from AT&T and using the phone on a different network isn't good for business.

  6. wikkit42 says:

    When will "half price drinks for paying in gold" night be?

  7. fnivramd says:

    But, I don't see any lies?

    This is the usual formulation of a fiat currency. The notes are valuable because the government says you can pay debts with them. The government has men with guns, so it gets to decide how to pay its debts, and it has decided to use these otherwise worthless bank notes.

    Statutes don't have the force of physical laws, they can only really be enforced by a court. If you go to court and say "Gerald wouldn't pay his debt to me, give me a court order so I can send in the bailiffs" and Gerald offers convincing evidence that he tried to pay you with a wad of singles he'd been collecting in a jar then although he's being a pain in the arse, the court will throw out your case against him because those notes are legal tender. Whereas if he'd tried to pay with bottles of vodka, or mint condition Superman comics, the court will find in your favour because they are not legal tender. Because they know the court will enforce these rules, most people will just accept cash, and that's how you can use it as money.

    Most people don't pay a lot of debts in an ordinary day, they largely pay for things up front. A notable example where you do have a debt would be at the end of restaurant meals (in a real restaurant, not a McDonalds) and you'll notice that there's already an etiquette for paying in restaurants, including tipping, so if you want to be an arsehole you might as well not leave a tip, rather than paying with a huge pile of singles.

    When you try to get on a bus, it's up to the guy driving whether you're allowed on. Trying to pay for a $2 trip with a $100 bill is obnoxious, so you don't get to ride. Trying to bring an entire drum kit onto the bus is obnoxious too, as is constantly shouting, "I'll kill you all" at the other passengers. Since you have no debt owed to the bus driver the instruction on the bank notes is irrelevant. In Central London and many other busy cities you can't pay for a bus ride on a bus anyway, you must already have a ticket or smart card to board the bus.

    Basically this stuff works like ROAR. You most likely write that on your tickets, even though people paid good money for them. But you don't really turn away people just because you're bored or you don't like the T-shirt they're wearing. Doing that would be bad for business. So in practice anyone with a ticket who reasonably expects to get into the club will get in. Only underage kids, fighting drunks and other bad elements get refused.

    ... and anyway I thought the problem was that your President /does/ trust in God?

    • vsync says:

      In Central London and many other busy cities you can't pay for a bus ride on a bus anyway, you must already have a ticket or smart card to board the bus.

      David Brent offers a compelling counterpoint.

      Also, I was in London some months ago and paid for a bus ride with cash.

      • semiclever says:

        You can always pay for bus rides with cash; you can't always pay on the bus. Some routes require either a pre-purchased paper ticket or an oyster card (stored value card). The ticket machines that allow you to pay cash only accept exact change in coins.

  8. wfaulk says:

    It says that it's legal to use it for private debts, not that it must be used for private debts. It's legal to own a shotgun, too, but you're not required to do so.

  9. Oh, and whatever you do, don't trust him!

  10. Uh, yeah, this is news?

    There exist stores that accept only credit card payments because it's risky to trust employees to handle cash drawers.

    Nobody's making you shop there.

    Your tender is perfectly legal. It's equally legal for them to refuse certain modes of payment.

    • jwz says:

      Yeah, it's news to me*. I always believed those shops to be breaking the law.

      * So blow me.

      • The part of that Treasury FAQ that interests me is "and some governmental agencies", which the answer doesn't even pretend to address.

        If that's a State Gov'tal Agency, then they're fine (they didn't issue the coin or note, they've no legal reason to accept it beyond prevailing convenience: all freedoms not reserved by the federal government are left to the states, then by them to the people), but if it's a Federal Gov'tal Agency, I do think they're breaking the law.

        Conveniently ignored in the Treasury's response, isn't it.

        (For shits and grins: show up in DC--remember that sending currency via USPS is against their stated policies--and attempt to pay the IRS in nothing but coin. Probably better left as a thought experiment...)

      • Also, if they didn't tell you in advance and you consumed, physically, their goods, and then you have nothing but cash to pay, they're in a hard spot. Either they can take the cash or they can let you walk without payment. This is why there are cash-only restaurants but no credit-only restaurants.

  11. judgefudge says:

    You know that part that says "this note is legal tender for all debts, public and private"?

    Operative term: all debts, public and private. As stated above.

    Goods and services don't count as debts. On the other hand, were you to finance the good or service, then cash and coins would have to be accepted.