It also adds that U.S. coins and currencies are considered a “valid and legal offer to pay the debt when offered to a creditor.” New York City will also join other cities, forcing businesses to accept cash starting Nov. 19. Businesses that fail to comply can face fines of up to $1,000 for an initial violation and $1,500 for each subsequent violation. Partly false. Some states have passed laws requiring businesses to accept cash, but there is no federal law prohibiting stores from rejecting cash. The Treasury Department`s website also states that while all U.S. funds identified as “legal tender” constitute a valid legal offer to pay the debt, there is no federal law requiring private companies to accept cash or coins as payment. Some states limit the restrictions that companies can impose. For example, many states require seized private property to accept money from people trying to recover their vehicles. If your state has a law that requires you to accept cash payments, you must follow the rules. If you don`t follow your state or region`s cash acceptance rules, you can expect penalties and fees.
Mississippi State Representative Chad McMahan was so sure companies had to accept cash that, in a viral Facebook post in 2020, he falsely told voters that if their cash payments were denied, “the debt would be paid in full.” Having a record of the cash payments you`ve made is a good thing. Being able to document more expense transactions can increase your business expense deductions and reduce your net business income for tax purposes. These payments are business expenses and can be deducted on your business tax return, but only if you record them. Even small payments can be recorded with a small cash register system. “U.S. coins and currencies (including Federal Reserve notes and circulation notes of Federal Reserve banks and domestic banks) are legal tender for all debts, public charges, taxes, and duties,” the Board of Governors of the Federal Reserve said, citing 31 U.S.C. § 5103. which defines “legal tender”. The Federal Reserve Board of Governors states on its website that private companies are not required by law to accept cash payments. ( here ) You may have noticed that some small businesses in your area have posted signs saying they do not accept cash.
Or maybe you`re thinking of going cashless yourself. To avoid unknowingly accepting counterfeit banknotes, you should create a policy on the type of invoices your company accepts. For example, you only accept $1, $5, $10 and $20 bills. As a business owner, you must keep records of every transaction, including cash sales. When accepting paper invoices from customers, treat cash transactions like any other type of transaction. While there are some benefits for a small business to accept and pay in cash, these cash transactions need to be documented. In addition to the issues discussed above, selling a business for cash can be challenging because the value of customers and liabilities cannot be measured. Leading national chains that have stopped accepting cash in recent years — such as Amazon Go stores and fast, casual salad chain Sweetgreen — have changed their policies after being criticized for excluding shoppers who rely on cash. In recent years, left-wing leaders in cities like New York, Philadelphia and San Francisco, as well as in the state of New Jersey, have enacted similar laws to protect unbanked customers who rely on cash.
Massachusetts has required companies to accept cash since 1978. Professor Clayton Gillette of New York University School of Law explains that if a company informs a consumer that it does not accept cash and the consumer consumes or owns goods or services, then that consumer has accepted the terms that the company has offered him. It can be considered a contract – if a company offers a good or service at a price with conditions, and the consumer acts in accordance with the contract to obtain the benefit, the consumer effectively accepts the established conditions. By providing advance notice of the required method of payment (i.e. placing a sign on the front door or menu) when a customer requests a service or consumes a product, the customer also agrees to the payment term. Although only 5.4% of U.S. households do not have a bank account in 2019, according to the FDIC, this share fluctuates with the state of the economy. In 2011, shortly after the financial crisis and the Great Recession, the rate without a bank account reached 8.2%. There is no federal law requiring companies to take money, according to the U.S. Treasury Department and the Federal Reserve.
However, some states and cities require companies to accept cash.
