no bills larger than $20

[Two Sheds]

What exactly is the deal with legal tender? Some stores post signs saying that they will not accept bills larger than $20. Of course, counterfeiting is an issue, but fear of it does not give them the right to refuse larger bills in my mind. As far as I'm concerned, 50's, 100's (or even larger bills for that matter and even pennies) are legal tender for all debts, public and private, and the store's refusal to accept them is tantamount to their waiving their right to be paid for an item, i.e., you should be able to say thank you, pick the item up and walk out. What is the law in this case?

[bibliophage]

This has been discussed before. Even if they were required to take your $100 bill, they aren't required to give you any change.

In an earlier thread, yabob provided this quotation fromt the Treasury Department

Q. I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?

A.The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 102. This is now found in section 392 of Title 31 of the United States Code. The law says that: "All coins and currencies of the United States (including Federal Reserve notes and circulating notes of Federal Reserve banks and national banking associations) . . . shall be legal-tender for all debts, public and private, public charges, taxes, duties and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal law mandating that a person or organization must accept currency or coins as for payment for goods and/or services. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

http://boards.straightdope.com/sdmb/...threadid=48224
Cecil's column on coins as legal tender

[RainbowDragon]

If you look at US Currency it clearly states:
“This note is legal tender for all debts, public and private”

Technically you are not in debt until you actually make the purchase. Then of course you would owe the other party money and you could pay with any bill you sought fit.

But when you go to the counter at McDonalds you technically don’t have a debt because the contract has not been completed. McDonalds is under no obligation to take US Currency in any form.

I heard of a furniture store once that did not accept cash. The reason was they were robbed numerous times. They gladly accepted credit cards and checks for payment. If someone wanted to pay cash they were directed to a location to purchase a money order and they could deduct the money order fee from the amount owed. After instituting and posting this policy the robberies stopped.

[AHunter3]

IIRC, they have the right to choose not to do business with you, and are not obliged to do so. If, in contrast, you ordered dinner at the store's deli and ate it at the counter and then attempted to pay with a $50 and they didn't want to take it, that's different. They have already done business with you and must accept your $50 or forfeit their right to be compensated for the food they served you, because there now exists a DEBT (which is not the case when you walk up to the counter with items in hand and attempt to pay for them with your $50), and the bill says it is legal tender for all debts, public and private.

Be that as it may, I'm a little uncertain myself about the right to choose not to do business thingie. Seems to me that if the right were absolute, any business could refuse to sell to (to use the usual tired, worn example) blacks; and, if not absolute, that there exists an obligation to serve anyone who wishes to be a customer except under specified conditions (since if it only works the other way around, any business could STILL refuse to serve blacks and simply not cite a reason other than "I don't want to serve that person").

And with that in mind, I'm not sure why there aren't some protections for people who simply end up with no small bills on hand and no immediate opportunity to convert larger ones.

[tanstaafl]

Just to reply to a comment in the OP, stores do not have the "No bills > 20" policy because of fear of counterfeiting. (IIRC, the 20 is the most often counterfeited bill anyway.) They are more concerned with running out of change. Stores only have a certain amount of money on hand (when they get above some level the extra cash is stuck into a safe which usually only management has access to). If they had to make change for too many 50s or 100s, after a while they wouldn't have enough bills of 20 or less to make change for other customers. (All of their on-hand cash would be in the form of 50s and 100s.) By limiting customers to using 20s and below, the cash they are taking in is in pretty much the same mix as the change they are giving out which avoids the problem and prevents having to send someone on a panic run to the bank for more 5s or whatever.

[AWB]

Originally posted by tanstaafl
Just to reply to a comment in the OP, stores do not have the "No bills > 20" policy because of fear of counterfeiting. (IIRC, the 20 is the most often counterfeited bill anyway.) They are more concerned with running out of change.

I beg to differ. It is more of an anti-theft policy. Hopefully theives with half a mind will realize that $20 or less is not worth the risks in holding up a store.

Anytime they do get a $20, they'll drop it into the safe. And on the off-chance that they do need more small bills, their safe is also equipped with dispenser to supply 20 $1 bills for change, but only once every 3-5 minutes. This way, even a semi-educated thief will realize that sitting around 3 minutes for a measily $20 more is not worth it either.

In the pizza delivery biz, our nametags say that we do not leave the store with more than $20. This is also to deter theives, who hopefully read this on our coupons or other signage instead of whacking us on the head, then reading it on our namebadge.

Note that this doesn't say we won't accept $100. But it'd better be for an $85 order, or we'll be forced to say that we'll take the $100 and then return later with the change. Most people don't find that acceptable, so they try to pay with bills commensurate to their order.

So I guess what I'm saying is: if you want to mug a pizza guy, do it after he's delivered an order or orders, but before he gets back to the store. Disclaimer: I am not advocating the mugging of pizza delivery men. Note that in most (if not all) jurisdictions in the US, this is illegal. Also note that while most delivery businesses tell their agents not to resist in the event of a mugging, there are those that don't listen and are armed. Also, some are from close-knit ethnic groups that will form a posse and hunt down any @$$401e$ that attack one of their own.

[Spoons]

tanstaafl makes a good point. When I worked in retail, running out of small bills because you made change for a large demonination one was a problem, especially early in the day when your float was small to begin with.

There is another reason though, and one I was guilty of more than once: large denomination bills can be a headache for the cashier if store policy demands that large denomination bills be specially treated and the store gets busy.

I can only speak for where I worked, but I imagine it was typical. If there was a large influx of customers, all of whom want to get through the cash line as quickly as possible, the employee doing cash (me, typically) would take the large bill, make change, and then put the large bill in the cash drawer, instead of going into the back to the drop safe and putting the bill through the slot, as policy demanded. Staying out front on cash and checking customers through helped me avoid customers' snarls, but it meant that I was breaking policy.

Why take a large bill to the drop safe immediately? Well, if someone bent on robbing you knows that all he's going to get from the cash drawer is a handful of coins and a few $5, $10, and $20 bills, he might think twice about hitting you. But if he knows he might get that with a few $100 and $50 bills mixed in, he might think you're a good target indeed. Hence our "Put the $100s and $50s in the drop safe as soon as you get them" policy. That's what we had (and what I should have paid attention to), but by extension, you can see why others would have a "Nothing over $20" policy.

In my case, nothing happened to the store or our money, thankfully. I did hear about this from the manager a few times though. ("Spoons, when you get a hundred, a fifty, or $X in twenties, you gotta take it immediately to the drop safe!") It would have been much easier to institute a "nothing over $20" policy, but we were part of a chain, and head office wouldn't allow it.

[Sunspace]

taanstafl said:
By limiting customers to using 20s and below, the cash they are taking in is in pretty much the same mix as the change they are giving out which avoids the problem and prevents having to send someone on a panic run to the bank for more 5s or whatever.

All the more reason to use a standardized nationwide debit-card system.

[Markxxx]

I agree it is an anti theft measure. When I worked at smaller type hotels like Red Roof Inn our policy was nothing over $50.00 in the cash register. (After 9pm) Nothing over $100.00 between 6-9p

And NEVER more than $200.00 in the register period.

We HAD to drop the money as the computer tracked you. And it wasn't easy as (well back then a room was 13.99) so after one or two sales it was drop drop drop.

Besides the theives being discourage the hotel knew if worse came to worse they'd only lose MAX $200.

What would happen if someone came in with a $100 bill. We'd simply say we can take the $100.00 and put it all on the bill give them a receipt and we can refund the difference in the morining. I also quickly learn to tell people once I take your money NO REFUNDS as I can't get at the money (if they paid by $100 till the next day)

[tanstaafl]

I beg to differ. It is more of an anti-theft policy. Hopefully theives with half a mind will realize that $20 or less is not worth the risks in holding up a store.

No problem. I was talking from my experience which is with larger retail stores like K-Mart or Wal-Mart. That was the explanation we were given. We didn't even discuss being held up; the only crimes we were told to watch out for were shoplifting and snatch-and-grabs.

Admittedly I didn't think about the delivery driver case. I can see that for the pizza delivery example you gave that the risk of theft is much higher than simply not having enough change. (And you certainly wouldn't want to carry around enough change to break a 100; in some areas that would just be asking for trouble.)

Probably convenince stores have the policy for both reasons, both of which are valid.

[handy]

Stores can refuse cash of any type. There is no law saying they have to take it.

People don't conterfeit anything less than $20.00 usually, so it makes sense to not take anything from $20 & up.

[MsRobyn]

The reason I don't take bills over $20 ($50 if it's busy) is because I don't always have the change. Since I work the evening shift, getting more change isn't always feasible.

Robin