There once was a time when cash was the undisputed king. Merchants preferred cash payments over credit, and there were often incentives for paying with paper. I recall receiving lower gas prices when paying with cash, for example. It is increasingly common to see “no cash accepted” signs at establishments as the world moves toward a cashless society. At the Federal level, there are no laws protecting consumers who wish to pay in cash. The Federal Reserve stated on its website:
There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise.
“Section 31 U.S.C. 5103, entitled “Legal tender,” states: “United States coins and currency [including Federal Reserve notes and circulating notes of Federal Reserve Banks and national banks] are legal tender for all debts, public charges, taxes, and dues.” This statute means that all U.S. money as identified above is a valid and legal offer of payment for debts when tendered to a creditor.”
Yet, the Federal Reserve also recognizes that as of 2021, 4.5% of US households were “unbanked.” This means that 5.9 million households are unable to pay by card. This is the lowest unbanked rate since the Fed began keeping track in 2009. The most common reason for not having an account, reported by 21.7% of unbanked households, is that they do not meet minimum balance requirements. The second most reported reason (13.2%) is that people simply do not trust banks, while the third most cited reason (8.4%) was the desire for privacy.
If merchants refuse to accept cash, these people cannot participate in consumerism. Their legal tender is simply not accepted. Unbanked households are more likely to contain persons with lower levels of education, lower incomes, disabilities, single mothers, and minorities. As the Fed reported:
“Differences in unbanked rates between Black and White households and between Hispanic and White households in 2021 were present at every income level. For example, among households with income between $30,000 and $50,000, 8.0 percent of Black households and 8.4 percent of Hispanic households were unbanked, compared with 1.7 percent of White households.”
If cash is legal tender, then it should be accepted everywhere. Numerous merchants not only refuse cash but they charge an additional fee for using credit. Tennessee, Arizona, Delaware, District of Columbia, Idaho, Maine, Massachusetts, Michigan, Mississippi, New York, North Dakota, Oklahoma and Pennsylvania, New Jersey, Rhode, Colorado, and Connecticut have laws at the state level protecting cash payments. Some cities such as Washington D.C., Berkley, Chicago, New York City, Philadelphia, and San Francisco also have laws in place. However, I can assure you that many retailers in these areas still do not accept cash.
Washington wants to move us toward a cashless society to tax everyone, even those with the least to give, on every transaction we make.