Money Monday: Is it legal for businesses to stop accepting cash?

As credit and debit cards, along with tap-to-pay systems, have become increasingly popular, some businesses have stopped accepting cash altogether. But is this legal? Our money expert, Paul Hood, explains.

Despite the phrase "this note is legal tender for all debts, public and private" printed on U.S. bills, it does not mean businesses are required to accept cash. Hood explains that while cash is considered legal tender, private companies have the right to refuse it. "Businesses that accept cash, they have more risk of it getting stolen, lost, getting robbed," he said.

Some concerns not accepting cash may disproportionately affect lower-income individuals, who tend to use cash more often. Hood points out that a bill currently making its way through the legislature would require retail stores—though not service businesses—to accept cash for purchases of $500 or less. However, no law has been passed in Oklahoma yet. A previous bill, which would have required cash acceptance for purchases up to $2,000, was not approved.

For those who prefer cash over credit cards, Hood suggests two options: using a debit card, which withdraws directly from a bank account, or using the “envelope method” for budgeting, or just don't shop at those businesses. "Businesses, when you restrict how you get payment, you potentially restrict the clients or the customers that you're going to have. So, [people] can use their buying power to convince a business to accept cash," he said.

While businesses are not required to accept cash, customers can still choose where they shop accordingly.