Most small businesses, restaurants (even some upscale restaurants & bars), retail stores, etc. do not accept $100 bills. They cite "company or store policy" not to accept anything higher than a $20 bill note. Is this legally allowed? I guess you will be more interested in knowing why they refuse to accept it - is counterfeit such a huge issue that they cannot accept it?
Four reasons:
1. Small businesses don’t keep a lot of change on hand. If someone pays for a $10 thing with a $100 bill, it can wipe out all of the change in a cash register.
2. Larger bills are more likely to be counterfeit.
3. In the event of a theft, the thieves won’t get as much
4. Employees steal money from businesses, especially retail businesses, and they don’t want lots of cash lying around to tempt employees to steal..
As far as the legal concern of such policies, please review the statute below.
This statute [Coinage Act of 1965, specifically Section 31 U.S.C. 5103] 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. [www.treas.gov]
Here is comment by one of our readers:
Then why do they bother printing on each bill, "This note is legal tender for all debts public and private?" It should add "...except when it isn't."
Please note that the definition of legal tender only refers to debts, NOT TRANSACTIONS. In most stores where you buy things you have not yet inured a debt as the store is still in possession of the merchandise. A restaurant however is unable to refuse large bills because the act of eating a meal before paying creates a debt that can be covered by ANY form of legal tender. Basically the government cannot require two parties to exchange goods and services proactively, only reactivly regulate the matter that debts can be resolved.
1. Small businesses don’t keep a lot of change on hand. If someone pays for a $10 thing with a $100 bill, it can wipe out all of the change in a cash register.
2. Larger bills are more likely to be counterfeit.
3. In the event of a theft, the thieves won’t get as much
4. Employees steal money from businesses, especially retail businesses, and they don’t want lots of cash lying around to tempt employees to steal..
As far as the legal concern of such policies, please review the statute below.
This statute [Coinage Act of 1965, specifically Section 31 U.S.C. 5103] 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. [www.treas.gov]
Here is comment by one of our readers:
Then why do they bother printing on each bill, "This note is legal tender for all debts public and private?" It should add "...except when it isn't."
Please note that the definition of legal tender only refers to debts, NOT TRANSACTIONS. In most stores where you buy things you have not yet inured a debt as the store is still in possession of the merchandise. A restaurant however is unable to refuse large bills because the act of eating a meal before paying creates a debt that can be covered by ANY form of legal tender. Basically the government cannot require two parties to exchange goods and services proactively, only reactivly regulate the matter that debts can be resolved.
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