There are a few restaurants in my area where cash payments are not accepted. They only accept electronic payments such as credit cards, local debit cards, etc. Is this legal?

On most currencies, it is written on the note something along the lines of "this note settles X dollars of debt". If a customer offers to purchase a product or settle the bill for a service they have consumed (e.g., food already is eaten, gas already pumped into the car) via cash, can the seller deny it?

On a related topic, must business entities accept cash for invoice settlements? I know that the party receiving the payment can charge a "reasonable fee" for processing the cash (e.g., thousands of coins). Can they, for example, demand the debt be settled by bank transfer only?

  • I don't know about the UK, but this is legal in the US. Cash is legal "for all debts" but it doesn't mean that cash must be accepted for all debts. – Ron Beyer Aug 24 '18 at 14:28
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    @RonBeyer: I'm pretty sure that's exactly what it means. Legal tender must be accepted in payment of a debt. You can make it harder to pay a debt with cash, but you must accept cash. Transactions often don't involve debt, though, and cash need not be accepted in those cases. (You can have a drink machine that only takes credit cards, for example.) – cHao Aug 24 '18 at 15:12
  • @chao law.stackexchange.com/questions/21975/… – Ron Beyer Aug 24 '18 at 17:47
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    @RonBeyer: Entirely consistent with what i said. You must accept cash in payment of a debt. But you need not accept it if the offerer is merely buying goods or services as opposed to paying off a debt. – cHao Aug 24 '18 at 18:02

The Bank of England actually makes this pretty clear with the following line:

Legal tender has a very narrow and technical meaning, which relates to settling debts. It means that if you are in debt to someone then you can’t be sued for non-payment if you offer full payment of your debts in legal tender.

Essentially, if you are in debt (frequent examples are a taxi ride or a meal at a sit-down restaurant) then you can use legal tender to pay off that debt. But that doesn't necessarily mean they have to accept it. It only means that they cannot sue you if they do refuse to accept it. But the refusal wouldn't itself alleviate the debt either. They could technically return to you at some point and say "ok, fine, we'll take the cash" and you'd still be obligated to provide it to pay off your debt.

It's also worth emphasizing that this only applies to situations where the payment is to alleviate a debt, for services that have already been provided before you are billed. It would not apply while buying groceries at the supermarket. Even restaurants where you pay for your food up-front and then receive it afterwards can refuse cash payment. In those situations the services are prepaid and you are not ever alleviating a debt.

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    You might add that in the UK the number of coins that are "legal tender" is limited. 100 one penny coins are not legal tender, they can be refused even for settling a debt. 1p and 2p up to 20p, 5p and 10p up to £5, 20-50p up to £10, pound coins unlimited are legal tender. – gnasher729 Aug 27 '18 at 23:17
  • And the classic debating point with some Scottish people who will assert that Scottish banknotes are 'legal tender' in England (they are not, even in Scotland, where I believe no banknotes are legal tender). – Neil Tarrant Sep 10 '20 at 9:48

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