Can A Restaurant Refuse Cash Payment?

In this day and age, many businesses have gone cashless and only allow electronic forms of payment.

It’s not only a trend among retailers and corporations, but it’s also gaining attraction with restaurants.

Some establishments are of the opinion that it’s faster and more convenient for customers to pay with credit or debit cards, but can a restaurant refuse cash payment?

Is Cash Legal Tender?

There is no federal law that requires private businesses to accept cash as payment.

However, according to the Federal Reserve, “This is because the U.S. Treasury does not have a legal tender requirement. Private businesses are free to develop their policies on whether or not to accept cash unless there is a state law that says otherwise.”

In other words, the federal law has left the discretion of accepting cash payment entirely to the private businesses.

At the same time, the U.S. Department of the Treasury states that “United States money as identified above is 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 payment for goods or services.”

This means that a business can legally refuse cash payment for the services or goods it provides.

So, while it is perfectly legal for a business, including a restaurant, to refuse cash payment, this does not mean they are free from every legal restriction.

The Restrictions of Accepting Cash Payments

Even though it is legal for a business to refuse cash payment, that does not mean that they can discriminate against a customer.

Title II of the Civil Rights Act of 1964 prohibits businesses from discriminating against customers based on race, color, religion, and national origin.

In addition to the Civil Rights Act, some states have passed their own laws and regulations that restrict a business’s ability to refuse cash payment.

For example, in Massachusetts, no retailer is allowed to refuse cash payment for goods unless the sale is made online, or the payment is made through a gift card.

In New Jersey, businesses are prohibited from displaying signs that deny cash payment.

Why Restaurants Refuse Cash Payments

Many restaurants have begun refusing cash payments as a means of reducing cash handling and thefts.

By reducing the amount of cash on hand, they can eliminate the risk of employees mishandling cash and stealing from the till.

Furthermore, cashless payments are quicker and more convenient for customers, which is often the case with fast-food restaurants and cafes.

There are also many restaurants and businesses that actually don’t accept card payments.

FAQs

Summary

Restaurants and other private businesses have the right to refuse cash payment.

However, they must be mindful of the legal restrictions in place, and not discriminate against customers based on protected factors such as race or religion.

Customers should also be aware of the payment policy of the restaurant they are dining or ordering from and have alternative payment options available to them.