Is It Illegal For Tennessee Businesses To Refuse Cash?

It seems like throughout your day, you're bound to encounter at least one business that requires the use of a card and no cash. A lot of people just sigh and pull out their card, some leave, and some make the argument that the business has to take the cash because it's legal tender. It turns out, that's not the case.

NO CASH - CARD ONLY

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The conversion to only cashless transactions began a few years ago but was accelerated by the Center for Disease Control and Prevention releasing guidelines to prevent the spread of COVID-19 that suggested cashless payments were safer, with no contact card payments being the safest.

Immediately, stuff spread around Facebook, about how the businesses legally have to take cash, or they're in violation of US Treasury law.

"IF THEY REFUSE UR CASH THAN (sic) THE DEBT IS CLEARED AND TAKE UR ITEMS AND LEAVE STORES REFUSING U.S. LEGAL TENDER CAN NOT PERSICUIT (sic) A PERSON IF THEY REFUSED TO TAKE CASH!" a user posted to Facebook on July 21. " U.S. TREASURY LAW STATES IT IS UNLAWFUL TO REFUSE LEGAL TENDER ANY BUSINESS CAN ALSO BE REPORTED FOR REFUSING CASH AND REPRIMANDED!"

However, it's not quite what you think.

No Federal Statute Requires Cash

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The Federal Reserve's website indicates that there is no requirement for a business to accept cash or coins as a form of payment for goods and/or services.

"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," the Board of Governors of the Federal Reserve System says, citing 31 U.S.C. § 5103 which defines "legal tender."

It goes on to say all private businesses "are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise."

That's why some stores also have the option to not accept bills larger than $20 or $50.

"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," the Treasury's site says.

So, private businesses have the option to only take some or no cash.

States and Cities Requiring Cash Acceptance

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Some states do have local requirements that prohibit businesses from banning cash.

When New York City joined the list, they set up some fines for any business that won't take cash for purchases. Businesses that don't comply could face fines up to $1,000 for a first violation and $1,500 for any violation after that.

Some laws do have exceptions. In New Jersey, parking facilities are exempted from the rule, as are car rental businesses - as long as they accept cashier's checks or certified checks.

"No retail establishment offering goods and services for sale shall discriminate against a cash buyer by requiring the use of credit by a buyer in order to purchase such goods and services. All such retail establishments must accept legal tender when offered as payment by the buyer," reads the Massachusetts Legislature website.

The complete list of states that prohibit businesses banning cash or have a bill being reviewed include: