Cash Acceptance - KISS Problems Goodbye!

Posted on: 09/08/2020

Frankly, there is too much discussion in the UK - and around Europe - surrounding the precise meaning of the term "Legal Tender".

Until recently, the vast majority of UK public believed that the £ had to be accepted for purchases in shops, bars and restaurants. 

Then, long before the current pandemic, a few retailers and bars started to refuse cash.

This refusal attracted a significant amount of media attention. When journalists started to dig into the subject, the most thorough amongst them found a page on the Bank of England website where it is made clear that the £ is "Legal Tender" only in terms of its use to pay off debts.

Put simply, if a creditor is owed £100 and their debtor offers to settle the debt by means of £100 in cash, the creditor has either to accept the offer or forfeit the right to pursue the debtor for payment.

This, of course, is not something only of interest in the UK. Indeed, a case is currently making its way through the European Courts where arguments focus on whether cash must be accepted as settlement of ANY debt, including payment of taxes. hospital bills and the like.

However,  the legal "nicety" here is that when a customer visits a shop and approaches the counter or check-out to make a purchase, no debt exists. The retailer can therefore, in advance of any purchase being made, legitimately make clear that they do not accept cash.

This, of course, opens up a can of worms in terms of the complexity of discussions that ensue. For example, if a customer picks up a can of Coca Cola in a shop, takes a hearty swig from the can and then offers cash as payment at the check-out, is the retailer legally entitled to refuse the cash and demand another payment method is used?

My answer?


Frankly, I am bored with all these arguments. More important than my boredom. however, is that there is no need to get into an argument about the definition of "Legal Tender" to defend the publics right to use cash.

In the United States, several States have passed laws compelling businesses to accept cash for in-person payments without making a fuss over the definition of "Legal Tender."

Equally, a Federal Payment Choice Act is now making its way through the approval processes in Washington but doesn't  get bogged down in detail as regards definitions of "Legal Tender". The whole Bill is a mere five pages.

So what do we need to see in the UK?

I must say I favour the KISS Principle ie Keep It Simple, Stupid!

In my view, the UK Treasury should simply authorise the Bank of England to publicise on their website and in national media the UK banknotes and coins  which MUST be accepted by ALL businesses for in-person payments.

Any member of the public would then be able to refer a retailer trying to refuse cash to the website.

If businesses continue to refuse cash, it may be necessary for legislation to be passed which includes significant financial penalties connected with the refusal of cash.

The fact is that we ALL - the public AND businesses - know what cash is. It doesn't require any fancy legal definition of :"Legal Tender" - or anything else!

SO LETS GET ON WITH IT - the Treasury and Bank of England can sort this out NOW, in 2020, ensuring the public continue to have cash on the UK's Payment Choice Menu.




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