All that is wrong with the world…

September 2, 2011

Why merchants don’t have to accept legal tender

Filed under: Issues...the world...etc.. — Tags: , , , — allthatiswrong @ 9:51 am

I find it frustrating just how common the belief is that merchants have an obligation to accept legal tender in any denomination for any payment; regardless of if it is 500 pennies, a wrinkled $1 bill or a crisp $20 bill. This is simply incorrect. Merchants don’t have to accept anything they don’t want to. What legal tender actually means is that it can be used to pay for things and that it must be accepted for all private debts and public charges. If I just want to buy something, the merchant has no obligation to accept. Or in other words, the merchant has no obligation to enter into a contract if he does not like the terms, which includes the currency denominations for payments. The exception to this is when a merchant has not clearly specified their payment policies. In that case if money is owed, they do have an obligation to accept legal tender, at least as I understand things.

I was disheartened to see Liz Lemon’s character on 30 Rock take this stance and further spread this myth. It isn’t hard to understand. There is no law requiring that any individual or private organization accept denominations they don’t want to, or even requiring them to accept legal tender in the first place. Legal tender is the assumed default method of payment but there is no requirement that it be the method of payment. This goes for most western countries. I don’t really know why people thinking legal tender means anyone has to accept it in any denomination comes from. A lack of education, or just some idiotic reasoning without thinking things through?

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