31 U.S.C. § 5103 makes U.S. coins and currency legal tender for debts, public charges, taxes, and dues. It does not create a general federal command that every private business accept cash for goods or services. The Federal Reserve explicitly distinguishes those propositions. [1][2]
What legal tender establishes
The statute identifies U.S. coins and currency, including Federal Reserve notes, as legal tender. The Federal Reserve describes this as a valid and legal offer of payment for debts when tendered to a creditor. The short provision does not prescribe every merchant’s checkout method, every contract’s payment terms, or every agency’s collection procedure. [1][2]
A sign announcing a card-only policy before a purchase raises a different question from a creditor refusing payment on an existing obligation. Determine whether there is already a debt, how the obligation arose, and which payment conditions apply before treating the phrase “legal tender” as a complete answer.
Why a cashless shop may be allowed
The Federal Reserve says no federal statute generally requires a private business, person, or organization to accept currency or coins for goods and services. Businesses may establish cash policies unless an applicable state law says otherwise. State or local cash-acceptance rules therefore need their own analysis. [2]
For example, a customer who sees a card-only notice before ordering should not assume § 5103 alone forces the shop to complete the transaction for cash. Conversely, the absence of a federal requirement does not establish that the same policy complies with a particular city’s cash-acceptance ordinance.
What to check in a payment dispute
- Identify whether the transaction is a proposed purchase or an existing obligation.
- Save the contract, bill, advertised payment policy, and any refusal.
- Check the law governing that particular seller, service, or public payment.
- Ask for the accepted payment methods and any available alternative in writing.
Do not assume a refused cash offer automatically erases a debt, prevents late charges, or ends a court case. Those consequences depend on rules beyond this statute. When a deadline matters, preserve proof of timely efforts to pay while identifying a valid payment route.
Authenticity is a separate issue
Legal-tender status concerns valid U.S. money. A dispute about whether a bill is counterfeit raises different criminal and factual questions from whether a store accepts cash at all. Likewise, a merchant’s concern about large bills is not answered merely by quoting the denomination printed on the note.
Use § 5103 for the proposition it actually establishes, then examine the applicable transaction and payment rules. That produces a more useful answer than assuming either that all cash refusals are unlawful or that every refusal is permitted.
Related questions
See passing counterfeit currency under Section 472 and making counterfeit currency under Section 471.
Primary sources
- 31 U.S.C. § 5103 — Office of Law Revision Counsel
- Federal Reserve: May a Business Refuse Cash as Payment?
Sources checked: October 31, 2026.