It is legal for a retailer/store or other business to refuse $50 & $100 bills or other legal tender, e.g. pennies?

Question

I'm trying to find out about businesses refusing $50 & $100 bills. Aren't they required by law to accept all legal tender? I had one person say it could be that it's not all legal (i.e. a concern for counterfeit currency) – in that case shouldn't it be the stores responsibility to purchase one of those scanning machines?

Answer 1

I looked this up on Wikipedia, and was hoping the answer would be "no - stores cannot refuse legal tender", but unfortunately, it's not the case! If the retailer wants to go to the lengths of refusing certain denominations to protect themselves from counterfeit currency, they are fully within their rights to do so. The "Legal Tender" page on Wikipedia says this about Canadian bills:

[...] Retailers in Canada may refuse bank notes without breaking the law. According to legal guidelines, the method of payment has to be mutually agreed upon by the parties involved with the transactions. For example, convenience stores may refuse $100 bank notes if they feel that would put them at risk of being counterfeit victims [...]

What is interesting about what I found out, is that legal tender cannot be refused if it is in repayment of an existing debt (i.e. not a store transaction for which there existed no previous debt). So you could offload your $100 bills when repaying your Sears credit card account (or pay in pennies if you wanted to!) and they couldn't refuse you!

Answer 2

The U.S. Treasury said the same thing on the lawfulness of retailers refusing legal tender at point of sale - retailers are allowed to refuse any denomination of U.S. currency:

[...]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. [...]

Answer 3

Yes, U.S. currency of any denomination is "legal tender FOR ALL DEBTS, public and private." But when you go into a store you (normally) don't owe them anything. In that case, it's more like a barter transaction: Your currency for their soda. Meaning that they can refuse to take "your currency."

Open an account at the store, and run up a debt. Then you can pay in any denomination.

Answer 4

Legal tender is by law any denominations of money printed by the Bank of Canada. There is an exclusion to this in that it must also be acceptable to both parties of the transaction. See the following link from the Bank of Canada on Legal Tender and look at the answer to the question of What is "legal tender"?

The reason retailers may refuse the "legal tender" is in the case of counterfeit prevention. The stores that purchase the scanning machines are trying to be accommodating by deferring the decision to refuse the "legal tender" after verifying it (checking if it is acceptable).