# Legal tender and businesses refusing large bills
**URL:** https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070
**Category:** Factual Questions
**Created:** [July 26, 2003, 12:39pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070 "2003-07-26T12:39:13Z")
**Posts on this page:** 20
**Page:** 1
### Author:  [@dougie\_monty](https://boards.straightdope.com/u/dougie_monty)
#### Post date: [July 26, 2003, 12:39pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/1 "2003-07-26T12:39:13Z")
Although all U. S. currency is printed with the message “This note is legal tender for all debts, public and private,” I will see, from time to time, a sign in a store announcing that the store will not accept bills larger than (usually) $20.00. Is this legal, in view of the statement printed on currency?
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### Author:  [@Scarlett67](https://boards.straightdope.com/u/Scarlett67)
#### Post date: [July 26, 2003, 12:47pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/2 "2003-07-26T12:47:11Z")
Everyone repeat after me: “A purchase is not a debt.” This is why businesses can refuse payment in big bills, or all pennies, or what have you.
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### Author:  [@olefin](https://boards.straightdope.com/u/olefin)
#### Post date: [July 26, 2003, 1:53pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/3 "2003-07-26T13:53:14Z")
> [@](#):
>
> \*Originally posted by Scarlett67 \*
> \*\*Everyone repeat after me: “A purchase is not a debt.” This is why businesses can refuse payment in big bills, or all pennies, or what have you. \*\*
\*Dictionary:
debt [det] (plural debts)
noun
1. something that is owed: an amount of money, a service, or an item of property that is owed to somebody \*
**When you desire to buy an item, you owe a debt to the owner.
You can pay cash or credit.** :rolleyes:
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### Author:  [@Tusculan](https://boards.straightdope.com/u/Tusculan)
#### Post date: [July 26, 2003, 2:10pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/4 "2003-07-26T14:10:01Z")
That’s not relevant to this case, **olefin**. You only incur the debt _after_ you have conducted the purchase. If the owner refuses to sell it to you, there is no debt.
If I get **Scarlett67** ’s intention right, (s)he means that the seller has the right to put up conditions on the sale. By putting up a plate, the seller says that he will only sell it to you on the condition that you agree to pay your debt in a manner other than with large denominations.
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### Author:  [@Tusculan](https://boards.straightdope.com/u/Tusculan)
#### Post date: [July 26, 2003, 2:12pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/5 "2003-07-26T14:12:23Z")
By ‘plate’, I meant ‘message’ as described in the OP.
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### Author:  [@Scarlett67](https://boards.straightdope.com/u/Scarlett67)
#### Post date: [July 26, 2003, 4:15pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/6 "2003-07-26T16:15:53Z")
**Tusculan** is correct, except (again) in the use of the word “debt” in the last sentence to apply to a purchase.
A mortgage is a debt.
A phone bill is a debt.
Bringing a CD to the cashier and offering to purchase it does not create a debt. It is an offer to buy. The merchant may accept or reject the offer, and may do so based on what sort of money the prospective buyer is offering; for example, the merchant may accept or reject certain types of credit cards, or may be willing to take some other object in trade, or as mentioned earlier may reject payment with a large bill or a check or a sock full of pennies. If the merchant does not accept the offered payment, the transaction simply does not take place.
Perhaps the legal types will show up soon and point us to some sort of documentation. I don’t have time to do the research right now, but I have read about this in several other places.
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### Author:  [@Riboflavin](https://boards.straightdope.com/u/Riboflavin)
#### Post date: [July 26, 2003, 4:36pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/7 "2003-07-26T16:36:51Z")
Just do a search on GQ for ‘legal tender’, this has been covered many times before. All that the phrase means is that if you offer US money in order to pay off a debt, the lender has to either accept it or lose their ability to claim that you haven’t tried to pay off the debt. Businesses and individuals can still refuse to accept high bills or huge sacks of pennies for sales.
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### Author:  [@olefin](https://boards.straightdope.com/u/olefin)
#### Post date: [July 26, 2003, 9:15pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/8 "2003-07-26T21:15:30Z")
> [@](#):
>
> \*Originally posted by Tusculan \*
> \*\*That’s not relevant to this case, **olefin**. You only incur the debt _after_ you have conducted the purchase. If the owner refuses to sell it to you, there is no debt.
> \*\*
Disagree… it is relevant to this case!
True, that is what I said, it is a debt as soon as you decide to purchase. It is a debt until you pay for it… either in cash or credit… you do agree credit is a debt?
“This note is legal tender for all debts,”
True, if the owner refuses to sell, there is no debt. :rolleyes:
Stores refuse to take large bills due to robberies… that is their choice and that is to help protect their employees and funds.
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### Author:  [@Tusculan](https://boards.straightdope.com/u/Tusculan)
#### Post date: [July 26, 2003, 9:30pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/9 "2003-07-26T21:30:47Z")
Surely I’m missing something here.
You say: “When you desire to buy an item, you owe a debt to the owner.” Then you say “if the owner refuses to sell, there is no debt”.
I say: there is only a debt if you ‘decide’ to purchase (actually, as says **scarlett** , after offering to buy) _and_ the owner agrees to sell.
In so far we are in complete agreement. But the thing is, if you leave out the latter part (as you first did), you miss the essence of the discussion here. It is simply not true that you incur a debt as soon as you decide to purchase. You only do, once you _act_ on it and this is accepted by the owner. And only in that situation would the question of the OP have any relevance.
You may thing this is sheer pedantry. The problem is that we are talking about a legal issue here, and law is concerned with such pedantry.
Actually your last post looks as if you are roughly saying the same as me and the other posters, but in that case it would have helped if you would have added a little bit of explanation to your first post.
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### Author:  [@Scarlett67](https://boards.straightdope.com/u/Scarlett67)
#### Post date: [July 26, 2003, 9:32pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/10 "2003-07-26T21:32:22Z")
> [@](#):
>
> \*Originally posted by olefin \*
> \*\*True, that is what I said, it is a debt as soon as you decide to purchase. It is a debt until you pay for it. \*\*
**olefin,** may I suggest that you stop rolling your eyes at us and pay attention?
Are you saying that you believe that once a customer picks up an object in a store, he is legally obligated to pay for it? What if he changes his mind and puts it back? What if he gets up to the counter and finds out he forgot his wallet? Can he be arrested for theft or fraud if he doesn’t pay? No, of course not.
Here’s another explanation: A debt is an obligation to pay **that was previously agreed to by both parties.** If the merchant does not accept the form of payment offered, then no such agreement has occurred, and the customer is free to leave the item in the store and exit.
This is very different from a loan or a credit-card balance. Those are debts. Both the merchant (in these cases, a bank) and the customer have entered into an agreement that the customer will pay X amount for some service, product, or cash amount that has already changed hands. The customer is obligated to pay; if he doesn’t, the merchant can take legal action. Can you see the difference?
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### Author:  [@mangeorge](https://boards.straightdope.com/u/mangeorge)
#### Post date: [July 26, 2003, 9:43pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/11 "2003-07-26T21:43:50Z")
A clerk in Mc D’s can hand you your food, decline the $100 bill, _and_ take the cheeseburger back. Sign or no sign. I saw it on _Cops_.
No, really.
Peace,
mangeorge
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### Author:  [@mangeorge](https://boards.straightdope.com/u/mangeorge)
#### Post date: [July 26, 2003, 9:47pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/12 "2003-07-26T21:47:10Z")
By the way, some fast food places are going to CC and debit only, at night. Or do I hear.
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### Author:  [@barbitu8](https://boards.straightdope.com/u/barbitu8)
#### Post date: [July 26, 2003, 9:58pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/13 "2003-07-26T21:58:52Z")
> [@](#):
>
> \*Originally posted by mangeorge \*
> \*\*A clerk in Mc D’s can hand you your food, decline the $100 bill, _and_ take the cheeseburger back. Sign or no sign. I saw it on _Cops_.
> No, really.
> Peace,
> mangeorge \*\*
I have my doubts about that. When you are given or shown a menu at a restaurant (even a fast food restaurant), the menu is an offer to sell you any of the items listed in it. When you order an item you have accepted the offer to sell the item in the menu, and a contract is then completed. Which brings up another issue. Suppose the item is not available? The restaurant has offered you an item but cannot fulfill the contract if you accept it. This often happens. Noone gets too upset about it, but legally isn’t the restaurant in breach of contract? (Of course, what are your damages? Zilch.)
But even if the items are not an offer to sell you any of them, but merely preliminary negotiations, when you order it, an offer is then made, and if the restaurant’s employee says OK, the offer is accepted and the contract completed. It cannot then decline the $100 bill since that was not part of the conditions of the contract, unless it posted a sign indicating it would not accept any bill larger than $20.
But I believe the menu is the offer and your order is the acceptance. Of course, again, you should be notified upfront that the restaurant won’t accept certain denominations of currency. You must be made aware of this condition before you order.
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### Author:  [@mangeorge](https://boards.straightdope.com/u/mangeorge)
#### Post date: [July 26, 2003, 10:00pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/14 "2003-07-26T22:00:23Z")
😃 Or _so_ I hear. Sorry for the correction, but the original almost makes sense.
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### Author:  [@Scarlett67](https://boards.straightdope.com/u/Scarlett67)
#### Post date: [July 26, 2003, 10:00pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/15 "2003-07-26T22:00:28Z")
> [@](#):
>
> \*Originally posted by Tusculan \*
> **I say: there is only a debt if you ‘decide’ to purchase (actually, as says scarlett, after offering to buy) _and_ the owner agrees to sell.**
**Tuscalan,** you’re doing pretty well, but I’d like to refine this thought.
Actually, there is never a debt involved with a simple store purchase. Look at the process: I come up to the counter with my widget, money in hand. Merchant says, “That’ll be 20 simoleans.” I hand over my simoleans, take my widget, and leave the store.
At no time am I legally obligated to pay the merchant anything. Before I’ve paid for the item, I always have the option of deciding I don’t want the widget and leaving it there, and the merchant always has the option of saying, “Sorry, I can’t change a 100-simolean bill,” and refusing to sell. After I’ve paid for the item, the transaction is over, and there is still no debt involved.
Now (and I fear that this may confuse the issue, and if I’m wrong here the legal types are welcome to correct me) if I tell the merchant, “Well, I only have 10 simoleans on me, but I can bring you the rest next week,” and the merchant says, “OK,” and we write up an agreement for me to pay him 10 simoleans by next Friday, and I take my widget and go on my merry way, that would be a debt. I now legally owe the merchant 10 simoleans. If I don’t pay by next Friday, I’ve reneged on the debt, and the merchant can come after me.
From [Snopes](http://www.snopes.com/business/money/pennies.asp) (bolding mine):
> [@](#):
>
> Title 31 (Money and Finance), Subtitle IV (Money), Chapter 51 (Coins and Currency), Subchapter I (Monetary System), Section 5103 (Legal Tender) of the United States Code 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. Foreign gold or silver coins are not legal tender for debts.
>
> What this statute means, in the words of the United States Treasury, is that “[A]ll United States money . . . is 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.”
>
> That’s it. All this means is that the Federal Reserve System must honor U.S. currency and coins, not necessarily anyone else. U.S. currency and coins can be used for making payments, but a debtor does not have to pay in legal tender, nor does a creditor have to accept legal tender. If a shoemaker wants to sell his products for 8000 jelly beans per pair, he’s entitled to do so; the buyer cannot demand that he accept the equivalent value in legal tender instead. However, legal tender is the default method of payment assumed in contractual agreements involving payments for goods or services unless otherwise specified. So, for example, if an automobile dealer signs a contract agreeing to sell you a car for $8,000, but when you begin making monthly payments he rejects them and insists he wants to be paid in gold instead, **you can go to court and have your debt discharged on the grounds that valid payment was offered and refused.**
The Snopes page also contains links to the US Treasury Dept.'s definition of legal tender and FAQ page. The FAQ notes that “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 statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services** ” (again, bolding mine). I would interpret this to mean that if I offer the merchant a 100-simolean bill to pay my debt, he may still refuse to change it and ask for a smaller bill. “Legal tender” means it is a valid offer of payment, but the creditor doesn’t HAVE to accept it.
The solution is simple: Go to the bank and get change. 🙂
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### Author:  [@mangeorge](https://boards.straightdope.com/u/mangeorge)
#### Post date: [July 26, 2003, 10:10pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/16 "2003-07-26T22:10:00Z")
Actually, **barbitu8** , it was a chicken place. Like Popeye’s, iirc.
The contract isn’t complete until you have the food, _and_ the store has the money. Works both ways, too. You can order a meal and just walk away.
This has all been argued before, hasn’t it?
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### Author:  [@chula](https://boards.straightdope.com/u/chula)
#### Post date: [July 26, 2003, 10:19pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/17 "2003-07-26T22:19:55Z")
> [@](#):
>
> \*Originally posted by barbitu8 \*
> **But I believe the menu is the offer and your order is the acceptance.**
No, that’s wrong. A menu is simply not an offer - it’s more like an advertisement. Even if it constituted a contract, the customer’s only remedy would be to refuse to pay.
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### Author:  [@Polycarp](https://boards.straightdope.com/u/Polycarp)
#### Post date: [July 26, 2003, 11:11pm UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/18 "2003-07-26T23:11:41Z")
> [@](#):
>
> \*Originally posted by olefin \*
> \*\*Disagree… it is relevant to this case!
>
> True, that is what I said, it is a debt as soon as you decide to purchase. It is a debt until you pay for it… either in cash or credit… you do agree credit is a debt?
> “This note is legal tender for all debts,”
>
> True, if the owner refuses to sell, there is no debt. :rolleyes:
>
> Stores refuse to take large bills due to robberies… that is their choice and that is to help protect their employees and funds. \*\*
Wrong. A debt is money owed as a result of a valid contract. A contract exists when there is a meeting of minds as to the terms of said contract. A sales transaction, once undertaken, is a contract – you’ve agreed to pay the storekeeper a $20 bill for your $19.78 in groceries and 22 cents in change, and he’s accepted your $20. At that point it is a contract.
The fact that you want to buy a gallon of milk and he’s charging $20 a gallon and you refuse to pay that much for milk, does not constitute a contract. You’re offering $3 and he’s saying it’s $20 – there’s no meeting of minds. If he offers merchandise at $1.95 and you agree to pay $1.95 for it, there’s a meeting of minds.
If he offers merchandise for sale and you agree to pay that price for it, but don’t have enough cash, and he doesn’t take checks or credit/debit cards – no meeting of minds. He wants cash for his merchandise; you don’t have the cash, even though you’re willing to pay in a means he declines to accept.
No debt is incurred until or unless he agrees to defer payment for the merchandise, or commits a good or service irreparably on your order (e.g., changes the oil in your car, cuts a steak to your specifications). He has the right to specify the terms on which he will accept payment for his merchandise offered for sale.
Now, if I went into a store that refused large bills, bought $22.94 in gas, picked out $70 in merchandise, and then handed him a $100 bill for my $97.84 (with sales tax) in purchases, I suspect strongly that his refusal to accept that $100 bill would be a violation of the legal tender act. But he is under no obligation under it to retain enough change to break a $100 bill for a $5 purchase. (Imagine the situation prior to their retirement if it were a storekeeper’s obligation to break a $10,000 bill – also legal tender – if a customer proferred it in payment.)
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### Author:  [@chula](https://boards.straightdope.com/u/chula)
#### Post date: [July 27, 2003, 12:10am UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/19 "2003-07-27T00:10:53Z")
**Polycarp** , you started off strong but then got to this:
> [@](#):
>
> **Now, if I went into a store that refused large bills, bought $22.94 in gas, picked out $70 in merchandise, and then handed him a $100 bill for my $97.84 (with sales tax) in purchases, I suspect strongly that his refusal to accept that $100 bill would be a violation of the legal tender act.**
Why? The store has complete freedom to decide what he is willing to accept (as long as it’s not illegal). He can tell you he’ll only sell it to you if you strip down to your underwear and hop on a pogo stick while singing La Cucaracha if he wants.
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### Author:  [@mangeorge](https://boards.straightdope.com/u/mangeorge)
#### Post date: [July 27, 2003, 12:16am UTC](https://boards.straightdope.com/t/legal-tender-and-businesses-refusing-large-bills/191070/20 "2003-07-27T00:16:51Z")
Do these signs refuse to accept bills over $20, or to make change over $20?
I really don’t recall. I can’t see a merchant refusing two 20’s for a $39 purchase.
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