It’s not illegal for shops to refuse cash

11 August 2023
What was claimed

It is illegal not to accept cash as it is legal tender.

Our verdict

It is perfectly lawful for shops and businesses to not accept cash, even though coins and notes are legal tender in England and Wales (only coins are legal tender in Scotland and Northern Ireland).

A post on Facebook has claimed: “I would say it would be illegal not to accept cash as it is still legal tender, denoted by the promise on UK bank notes.”

This is false—it’s not illegal for shops or businesses to refuse to accept cash. They can also refuse to accept card payments. And while cash is ‘legal tender’, this has a narrow definition that doesn’t mean businesses must accept it.

According to the Bank of England, shop owners can choose what kind of payment they take. 

In a response to a petition asking to make it unlawful for shops to refuse cash payments, the government responded that it: “does not plan to mandate cash acceptance”.

It went on to say: “While the government recognises the ability to transact in cash remains important to millions of people across the UK, particularly those in vulnerable groups, it remains the choice of individual businesses as to whether to accept or decline any form of payment, including cash or card.”

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The Bank of England says: “Legal tender has a narrow technical meaning which has no use in everyday life. It means that if you offer to fully pay off a debt to someone in legal tender, they can’t sue you for failing to repay.”

And the Royal Mint says that cash being legal tender doesn’t mean “any ordinary transaction has to take place in legal tender”.

In England and Wales, Bank of England notes and Royal Mint coins are legal tender. In Scotland and Northern Ireland, only coins are. But for small coins there are certain limitations—for example, 1p and 2p coins are only legal tender up to an amount of 20p.

But this doesn’t affect normal, day-to-day payments in shops. For example, other payment methods like cheques, contactless and debit cards are not legal tender. 

The current Bank of England banknotes in circulation do not mention being legal tender on them. They do say: “I promise to pay the bearer on demand the sum of [x] pounds”. This isn’t what makes them legal tender though, as the Facebook post seems to imply. 

The Currency and Bank Notes Act 1954 means Bank of England bank notes are legal tender in England and Wales and the Coinage Act 1971 means Royal Mint coins are throughout the UK (subject to the limitations mentioned above).

We’ve written before about how it is lawful for shops not to accept cash payments and we’ve checked other false claims about the status of cash, including that Nando’s is no longer accepting it, Sweden is abolishing it, and that the World Health Organisation advised people to use contactless instead to stop Covid-19 spreading. 

Image courtesy of Colin Watts

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