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VERIFY: Are businesses allowed to go cashless? It depends where you live

Amid this pandemic, some businesses have decided to stop accepting cash. The Verify team looked into the legality of this move.

WASHINGTON — Question:

Are businesses allowed to ban cash?


It depends on where the business is located. Federally, there is no law prohibiting a business from going cashless. However, laws have been passed in many states and cities, which mandate that businesses accept cash. 


The Federal Reserve

Massachusetts Legislature Website

Maura Healey, Massachusetts Attorney General 

Dr. Linda Nabha, Infectious Disease Doctor

Centers For Disease Control and Prevention


Amid this pandemic, a long-standing debate is being renewed yet again. Some businesses have started to "go cashless," to limit the amount of virus transmission. Dr. Linda Nabha, an infectious disease doctor, said that this type of transmission is "highly unlikely," but possible. 

"The most likely mode of transmission is person to person," she said. "We know the virus can live on surfaces, including cash. However, the chance that an individual will get COVID-19 from a surface like cash is unlikely, but possible." 

Some on social media have let their objections to cashless businesses be known. The Verify team looked into the legality of businesses turning down cash. 

On their website, the Federal Reserve referenced Section 31 of U.S.C. 5103, entitled "Legal Tender":

"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."

The Federal Reserve wrote the following analysis of this section: 

"This statute means that all 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. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law which says otherwise."

This statement from the Federal Reserve indicates that there is no federal policy, prohibiting businesses from banning cash at their establishments. However, states and cities have taken action against 'cashless businesses.'

States such as Massachusetts, New Jersey and Connecticut have passed laws prohibiting businesses from banning cash. Similar policies have been passed in Philadelphia, San Francisco and New York City. 

Amid the pandemic, Massachusetts Attorney General Maura Healey took to Twitter to remind businesses about the policy.

"It's illegal to refuse cash in Massachusetts," she wrote. "Businesses should take thoughtful measures to keep their employees and consumers safe, but let's keep our economy open to everyone." 

In D.C., Councilman David Grosso has recently proposed a bill that would prohibit businesses from banning cash. The council held a hearing on this bill in February before the pandemic hit. 

On the Federal level, bills stopping businesses from prohibiting cash have also been introduced in both the House and the Senate. At this point, neither bill has been approved by their chamber.  

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