I need a little help understanding something.... Background story: Friends of mine went down into the US this summer for a trip. They ordered american dollars from their bank and went down packed with 50s and 100s. And ran into trouble the entire time because SO many places completely refused to accept anything higher than a 20. Citing counterfit reasons mainly.... Okay, so they were stuck a lot. The woman had to leave her driver's license at a gas station to drive to a bank and change the cash to smaller bills. Oh but wait, this ran into trouble too because the first bank refused to do it because she was not a member. She was almost in tears by the time she found someone to give her 20s. It was a bit of a mess and caused some stress. Okay so fine, they planned to go down again a couple months later but ran into trouble up HERE because they couldn't get enough 20 dollar bills from the Canadian banks without having to wait 2 weeks (bad planning you could say, but it's not like they were going to Zimbabwe and expecting their dollars to be in the coffers at our small city banks - they were driving an hour and a half south to Montana! Anyhow they finally get going and have some 20s, some 50s and some 100s and of course run into the same troubles yet again.
So I have been thinking about this - while many stores here and in the US have posted signs on the door letting patrons know that they do not accept 100 dollar bills - is that legal?
I am all for private business making their own rules without the govt hanging over their head. I understand that some dont like to accept 100s because they have too many big bills in the drawer and it can be a security risk, or their own shop wants those bills put into the safe, blah blah blah. But if a person has already used a service - filled up with gas, ate a restaurant meal, etc - but they only have a 50 or 100 dollar bill, how is it legal for the business to refuse legal tender? It's not a credit card, a money order, offer to wash dishes to pay off your food bill (lol), it's legal Canadian or American tender printed by order of the federal government, is it not?
So I looked it up and it seems many many people have been asking the same question over the past several years. I found a link to the US treasury dept website with an FAQ section that apparently 'explains' their rules (I have not yet found a Canadian link but I will look harder when I am more awake lol).... I say it 'apparently' explains because in my opinion, it adds confusion.
According to THIS LINK, 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."
That seems pretty straight forward, the US federal govt/treasury states that coins and currency are legal tender for ALL debts. But, it goes on in the explanation section to say "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."
So....the federal act states it is legal tender for ALL debts, but then whoever wrote the FAQ section says that private businesses can decide whether to accept currency/coins or not. I understand that the US has a different system than Canada, but the states and provinces do not print their own money, so surely the federal rules must supercede what the provinces/states come up with. Or private business, for that matter.
If you think it's okay for a business to refuse your cash and then threaten you with police action if you walk out that door without paying, then what are you going to do if someone starts printing up fake 20 dollar bills at the speed of light in order to circumvent the stores rules? They are having trouble spending their fake bills, just like we are having trouble spending our legal bills - so what if you walk into a restaurant in a few years and find out at the end that even your 20s are no longer accepted. Only coins, 5s or 10s? How fat is your wallet going to be on rent day when you have to fork out $500 in 10 dollar bills? Or when you cash your $2000 work cheque and get all 5s and 10s with a pocket-ripping bag of toonies to boot?
But all that aside- at what point do we draw the line? Private business is private business - but should they legally be allowed to refuse to accept legal federal tender? Even if your bill is $90, they do not want your $100 bill and give you 10 bucks change. That happened to my friends this summer and they had an argument with the restaurant owner because there was no sign on the door stating this. He said that it is common place to refuse those bills all over the US, and it is also his onus as the business owner to refuse their payment. They ended up putting it on their credit card, which they did not want to do but felt they had no choice without getting into trouble with police on foreign soil.
Is it ACTUALLY legal to refuse cash payment, even if fair warning is given in a little sticker adhered to the entrance? In the treasury dept pieces that I posted above, the explanation does not seem to fit the actual federal Act. It is someone's interpretation of the act, in my opinion. If someone took this issue to court, what would the outcome be? The act clearly states that US coins and currency are legal tender for ALL debts. It does not appear to have been changed to say 'but with all the counterfeiting going on, businesses can refuse to accept whatever bills have been faked a lot'.
Bear with me, I am just trying to understand this. I saw stupid comments in various 'answers' forums like 'businesses have the right to refuse service'. Yes, they do, but that is not what this is about. They already provided the service if the person filled up with gas or ate a meal. What they are refusing is legal federal tender and then threatening the customer if they do not come up with another payment - even accepting a credit card, which is not legal tender, instead. How can that be legal?
ps I used to work at a gas station here in town and we were told to try to get customers to pay with smaller bills because it messed us up if we ran out of small bills to use for change - but if they did not want to pay with a smaller bill, we had to accept it and do the best we could. It was up to us, as the service provider, to be prepared to give the customer their change. It was not up to the customer to make sure I had enough 20s in my drawer. I provided the service, the customer provided the payment. I had to make a customer wait until my coworker could make a run to the bank to buy us some more 10s and 20s one time. I had a customer leave me his driver's license (his idea) so he could run to the bank, etc. But then we installed an ATM so that helped people out. But we were never told, despite the sign on the door asking for people not to pay in large bills, to refuse payment. People talk about not wanting to work alone in a store at night with big bills in the till - but I didn't want to work alone at night with an enraged customer either, thank you very much lol. But those days are gone apparently.