- Federal law does not require that private businesses, individuals, or organizations accept cash as payment for goods and services. Private businesses can decide whether or not to accept cash, unless a state law prohibits them from doing so (Source).
- Only New Jersey, Rhode Island, Connecticut and Massachusetts have passed legislation requiring businesses to accept cash. Businesses are also prohibited from accepting cashless payments in New York, San Francisco, Philadelphia, and New York (Source).
- The American Banker has a list of current State by State legislation efforts to keep track on this legislation.
Cash is still an integral part of society, especially in the United States. Despite this, there are places where cash has gradually been phased out and is no longer accepted as a form of payment.
This allows for safer transactions between buyers and sellers and makes it harder to use illegal methods to pay for goods.
While many people feel this is a step in the wrong direction, others feel that it helps improve society for all.
The main reason why some businesses refuse to accept cash is because of safety concerns. Both buyers and sellers are at risk during these exchanges due to robbery, theft, and overall inconvenience.
Having a paper trail for each transaction may deter criminals from going after stores and the people who shop in them, as it could lead to evidence later down the road.
Businesses also benefit from this change because cash is hard to trace when it comes time for taxes, while credit cards usually have a paper trail with every transaction.
Some areas of society are attempting to make cash obsolete entirely, which has led to mixed reactions from the public.
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Sweden: A Cashless Society
It has been making strides to become a cashless society, and many businesses in major cities no longer accept the physical currency. This shift is mainly attributed to convenience, as people generally prefer swiping their cards or using mobile payments over carrying around paper money.
Others complain about this practice because it reduces financial privacy and forces consumers to spend more, as they won’t see a running total of their bank account if they use cash.
Mesopotamia: First Currency
People have been using the currency for at least 5,000 years, with the first documented currency being created here.
Since then, money has never been more critical than it is now and has become incredibly ingrained into society.
United States
Here, cash is still widely accepted in society and businesses. Money has been slowly phased out for safer transactions and stress-free taxation because of buyer and seller’s risks during these exchanges.
Despite people preferring credit cards over cash, there are still many places where it’s selected as a form of payment.
Cash is often used when someone is buying something illegal, even though it is one of society’s most popular forms of payment.
This makes cash a complicated way to keep track of finances because there is little transparency about spending their money.
States That Have Cash Limitations
Other states such as Alabama, California, and Illinois have cash limitations on the transactions made with cash.
In California, any transaction done with money over $900 must be reported to the authorities.
In Alabama, cash limits exist for transactions between $600 and $3,000; anything more than that must be done with a check or money order.
Meanwhile, transactions over $3,000 in Illinois require checks or money orders, and no shop can accept cash worth more than $150.
Cash is making a comeback. More and more restaurants have decided to start accepting money again in the past few years, including Domino’s Pizza. Even Subway has begun allowing people to use cash.
Cash still makes up most of the money used in America today because it is handy for small transactions, but that doesn’t mean it is without its problems.
It’s only valuable when it is in large denominations. Individuals are at a disadvantage when they use money because they cannot easily track their spending habits.
States where using cash is mandatory
The five states where using cash is mandatory are Louisiana, Tennessee, South Carolina, New Hampshire, and Massachusetts. Stores that accept credit cards must also get some money in these five states.
It is difficult for businesses to refuse cash in these states, so they must take it. Legislators have not created any laws that require stores to only accept cash, but they do not want business owners to discriminate against customers by refusing to take their money.
Stores may prefer other payment methods, such as credit cards or checks, but they cannot refuse cash in these five states.
Tennessee
Two U.S. legislators support legislation that would require brick-and-mortar stores to accept cash, as more businesses shift towards card-only or touchless payment (Source).
There is currently no law that requires businesses to accept cash payments. However, S.4145/H.R. 2650 would change this. The Senators Bob Mendez (D–NJ) and Donald Payne Jr., (D–NJ10) support this proposal. This is to ensure that those who don’t have the cash will not be excluded by requiring cash.
Businesses would face a $2,500 initial fine for refusing to cash, and $5,000 each subsequent violation under the bills.
Representatives from Tennessee, John Rose and Mark Green, Charles Fleischmann, support the House bill.
In Summary
More businesses have been accepting digital forms of payment, such as Apple Pay and PayPal, in recent years.
These new forms of payment are more popular because they offer excellent fraud protection, but cash is still prevalent. If you’re interested in more ‘legalism’ around cash, check out our recent article on how much cash you can fly with.
My name’s Tony and I own several New Jersey businesses, specifically in North Bergen. Small stuff. A few local markets, a bowling alley, things like that. I started this blog to help you learn how to manage cash- like I have dealing with primarily cash businesses.
