Personal Finance 
48
comments

No Law Requires Acceptance of US Currency

Email  Print Print  

CoinsTake any bill out of your wallet, notice the little “Federal Reserve Note” written in the ribbon at the top of the bill? You may have heard that it’s considered legal tender and that you are required to accept it as payment.

As it turns out, while the Coinage Act of 1965 states that “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,” there is no such law that requires anyone to accept them. Section 31 U.S.C. 5103 of the act only states that the coins and currency are considered legal tender, but a business has the option must accept it as payment.

So the next time you want to “get back” at a business by paying in pennies, they are legally allowed to tell you to pound sand.

(Photo: r-z)

{ 48 comments, please add your thoughts now! }

Related Posts


RSS Subscribe Like this article? Get all the latest articles sent to your email for free every day. Enter your email address and click "Subscribe." Your email will only be used for this daily subscription and you can unsubscribe anytime.

48 Responses to “No Law Requires Acceptance of US Currency”

  1. Split Cents says:

    True story, but I’m more surprised at the number of businesses who will nonetheless tolerate such penny protests. In general, businesses can refuse to do businesses with you for any nondiscriminatory reason–even for discriminatory reasons in some cases!

    The legal history behind Fed Reserve Notes has more to do with establishing a stable currency (in a time where there were hundreds of currencies with varying rates of exchange) than forcing companies to accept any particular consideration as part of exchange.

  2. Scott says:

    Most of the businesses getting “attacked” by pennies are utility, credit card, and other revolving credit or “credit” companies. Accepting and processing a boatload of pennies is still cheaper than pursuing someone with a lawsuit for not paying at all.

    • MICHELE says:

      But they are not required to accept the payment. And I can’t say how many times someone tried to slip a roll of quarters laced with nickels or slugs. Is it worth the late charges?

    • cubiclegeoff says:

      I would think that if someone at least attempted the payment and the lender didn’t accept and said you still didn’t pay, you’d be better off in a court situation. It’d depend on the situation probably though.

    • cdiver says:

      Let them pay however they are willing to pay, to stay out of courts and collections.

  3. I had been collecting pennies, nickels and dimes in a large cooler water jug for a year. I just would dump my spare change in it each night. I decided to go down to Walmart and use this machine that counts your change. It was really cool as I dumped this huge jug of change in and it just kept counting. The only catch is you have to pay them a fee for doing this. I did not really care because for me to count and roll all these would have been a pain in the rear. It worked out great and it printed me a voucher for $277 by the time it was done cranking through all this change. So if you are someone wanting to take all your pennies and change down to pay for a large item, just go by Walmart and use there automatic change processor.

    • MasterAllan says:

      I have to ask why not take the coins to your local bank and deposit in the checking account? They should offer the same service to count the change for free with a counting machine and not charge a fee.

    • fairydust says:

      Many of those same machines (Coinstar being a popular one) will waive the fee if you put the money from your counted change into a certificate, like to amazon.com or starbucks. Since amazon sells everything and then some, I usually turn my change in for a gc to amazon, and then Christmas gifts are all taken care of :)

    • Dakota says:

      Just to let you know for future reference, at PNC they have coin counters and you may use them for free, no charge or percentage taken out.

  4. MICHELE says:

    I work for a city government (Clerk of Court). We actually have an ordinance on the books that limits the amount of change we are allowed to accept. 26 coins in any denomination. I get a lot of bartenders/servers who pay me in single bills, which can also be a pain in the rear.

    • Chris says:

      Yeah and if I was the person that was pissed enough to do this I would also sue you in Fed. Court. and report your county to the tresurey department..

    • Brad says:

      Then stop paying your bartenders/servers in single bills. If you don’t like it, why would they?

  5. Shocking :) )) I did already know this though.

  6. OK, it has been many years since my business law classes … but why would the § 3-603 of the Uniform Commercial Code not apply?

    § 3-603(b) states:
    “If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument and the tender is refused, there is discharge, to the extent of the amount of the tender, of the obligation of an indorser or accommodation party having a right of recourse with respect to the obligation to which the tender relates.”

    This would seem to say that the amount of the tender is discharged if there is a tender and refusal. Although this may only apply to situations where there is an instrument in place.

    In fact, the Treasury page you link to says “… for payment for goods and/or services.” It’s possible that creditors are bound to take your pennies (since they are payment toward a debt, and not payment for good and services, in spite of the fact that the debt resulted from purchase of good and services) while Wal-Mart, Applebees, etc are not bound to take them as mere payments. It’s always been my understanding the lenders must accept payments, but vendors need not.

    • Split Cents says:

      There are any number of reasons why UCC 3-603 isn’t generally on point here, but a quick answer: the section speaks of the obligation to pay an “instrument,” which in Article 3 speak narrowly means “negotiable instruments.” UCC 3-104(b). The most common negotiable instrument for consumers: a check!

      Also, keep in mind that “tender” can have multiple meanings–here, I believe it is not being used as a noun (i.e. tender as $$) but as a verb (e.g. to tender payment = to deliver payment as ordered by an instrument).

      The analogy on point would be: if someone indorsed a check over to you, which you took to a bank to cash, but the bank tries to pay you entirely in pennies, and you tell them to shove it! Then, the legal obligation of the person who “indorsed” (signed the check over to you) the check would be discharged.

      Commercial law can be tricky!!

      • Tender is being used as both a noun and verb in § 3-603(b).

        Looking at the definition of 3-104(b) … Per the definition, many other things fit the description of a negotiable instrument. A mortgage, for example.

        I’m not seeing how your information says that § 3-603(b) isn’t on point. You’re correct that the check writer (and bank) would have no further obligation if you refused the pennies, but the same would be the cash when any debtor tenders payment to satisfy obligation of an instrument.

        • Mm. For some reason I was thinking that loans are negotiable instruments. That’s why 3-104(b) doesn’t apply – unless we’re taking about commercial paper.

          Wow, it has been a loooong time since those classes.

        • Split Cents says:

          Yea, I agree my comment wasn’t the most clear answer. 3-603(b) is occasionally incorrectly cited for the proposition that creditors can’t refuse payment, and if they do this excuses the obligor.

          This is wrong. Normal contract law rules apply. Here, you’d read 3-603(a) NOT 3-603(b). Under standard contract law, creditors don’t necessarily have to accept any form of tender–an extension of the theme that you can’t make unduly burdensome payments with pennies, etc.

          3-603(b) applies in the sort of narrow circumstances I described in my prior comment–to discharge the obligation of an *indorser* or accommodation party. If you are paying off your car loan, home loan, etc (or paying for breakfast at Denny’s etc), 3-603(b) is not where you should look.

          • Bender says:

            Got a case cite for “Under standard contract law, creditors don’t necessarily have to accept any form of tender–an extension of the theme that you can’t make unduly burdensome payments with pennies, etc.”

          • Split Cents says:

            @Bender: there could be any number of cases (or none) depending on your specific facts, state, etc. Ultimately, though, its unnecessary to reach the conclusion.

            Generally, if you have no legal duty to do something, then not doing it is not unlawful (double negative, I know!). In other words, you don’t need a case or statute to specify that your actions are lawful… Its sufficient to ensure that no law says your actions are unlawful. That seems to be the point of the post: no law (case, statute, or otherwise) generally requires creditors to take any particular form of payment.

            My post within this thread is in that same vein: the UCC section cited doesn’t require creditors to accept any particular form of payment, standard contract law applies. Likewise, standard contract law doesn’t require any particular form of payment in most cases.

  7. Don C says:

    I have staged a penny protest, but have taken advantage of the fact that the self check out machines at the grocery store, Home Depot, Walmart, etc. accept change as payment. I grab a fist full of change everytime I head out to one of these stores. I then pay the balance by credit card. Beats counting loose change and rolling them to bring them to the bank. Plus it’s like getting a small discount on those purchases because a smaller amount shows up on the credit card statement.

    I do get a chuckle, when I have to return the item, and I get back some odd amount, say $1.64, in cash and then a credit to my charge card for the difference.

    • cubiclegeoff says:

      I would think after a while it hurts you more than them since it takes a lot of time to put in the coins and they probably don’t care if their lines are that long or dealing with the coins since a machine ends up dealing with them.

  8. I remember an article once about a man who paid a speeding ticket in another town by sending in a box of unrolled pennies for the amount of the fine. I do not recall what the end result was.

    I remember going into grocery stores as a kid in our small town and having a pocket full of pennies and the clerk cringing when I pulled them out. Other than that I have never experienced any issues and never really really thought about it. I would think any store would be happy just to make the sale.

  9. moljacks says:

    This is a really interesting law. As to the discussion about paying in pennies, that seems irritating for all parties. I would rather just shop elsewhere.

  10. MikeZ says:

    There was an interesting YouTube video a while back showing a guy paying an impound lot (where his car had been towed) in pennies. For some reason or other he thought the towing company was slimy and staged a penny protest.

    In a situation like that where your car is towed and being held by a company until you pay the debt. I’m not so sure pennies could be refused. The owner of the car certainly didn’t sign any contract with the tower. I’m not sure how the impound lot could justify keeping the owners car by not accepting payment.

    Certainly I’d agree that any retail purchase doesn’t need to accept pennies.

  11. eric says:

    You learn something new every day! I don’t do penny protests but I have an awful habit of forgetting to grab my change…I just hate carrying around coins.

  12. Blackowl says:

    Maby the caption should be changes to read “This might be leagle tender for all debts public and privet”.

  13. Akil says:

    This is the actual law regarding your statement. Laws made Pursuant to:
    United States of America Congressional Acts

    Public Law 42 Stat 122-113 73rd Congress HJR 192

    Nullifies Obligee power to require a particular type or coin or currency in the discharge of debts

    HJR-192, Public Law 73-10 and Title 31 USC 5118 prohibits Banks/creditors from demanding any specific specie of payment. All Banks must process lawful United States currency. Failure to do so is “interference with commerce”, a felony under the RICO ACT, 18 USC 1951.

  14. Anonymous says:

    Revised Post to 10/17/2020

    This is the actual law regarding your statement. Laws made Pursuant to:
    United States of America Congressional Acts
    Nullifies Obligee power to require a particular type or coin or currency in the discharge of debts

    HJR-192, Public Law 73-10 and Title 31 USC 5118 prohibits Banks/creditors from demanding any specific specie of payment. All Banks must process lawful United States currency. Failure to do so is “interference with commerce”, a felony under the RICO ACT, 18 USC 1951.

    HJR-192, Public Law 73-10 and Title 31 USC 5118 prohibits Banks/creditors from demanding any specific specie of payment. All Banks must process lawful United States currency. Failure to do so is “interference with commerce”, a felony under the RICO ACT, 18 USC 1951.

    Guaranty Trust Company vs. Henwood, 307 U.S. 247 (1939

  15. Bob Roper says:

    See UCC 3-603(b).

    (b) If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument and the tender is refused, there is discharge, to the extent of the amount of the tender, of the obligation of an indorser or accommodation party having a right of recourse with respect to the obligation to which the tender relates.

    As to HJR 192:

    Also, HJR 192 was repealed on Sept. 13, 1982. You can find evidence of
    this by looking up a schedule of laws repealed for this date at the
    law library. If you don’t know how to find it, ask the people working
    there. Even though it was repealed, it was “replaced” by other laws.

    Do a U.S. Code search and look up Title 31 Sec. 5118. But more importantly look up Title 31 Sec 3123 then Title 18 Sec. 8 then Title
    31 Sec. 3111. 31 Sec. 3123 explains that the U.S. is pledged to pay obligations of the U.S. 18 sec. 8 defines what obligations are. 31 sec
    3111 explains how to do it.

    Google like this: 31 USC 5118

    • Akil says:

      HJR 192 is just a resolution and not the actual law which is Public Law 73-10. You must overstand that the United States Corporation is in perpetual bankruptcy since that time of 1933 and the United States Codes are not law just prima facie. The Office of Law Revision Counsel was established in 1974.The Office of the Law Revision Counsel of the U.S. House of Representatives prepares and publishes the United States Code pursuant to section 285b of title 2 of the Code. The Code is a consolidation and codification by subject matter of the general and permanent laws of the United States. Title 2 has never been enacted into positive law therefore the entire code of U.S. laws are unlawful.Besides the only uniform law within the united states of america are the Constitution and the Uniform Commercial Code.

  16. john la berge says:

    correct me if i am wrong but the terms under which a contract’s terms may be framed generaly includes a mechanism for transfer of good and due consideration. the c=term consideration is to my knowledge considered as legal tender of the country in which the contract is enabled. the terms of settlelemt for the transaction may unless otherwise specified in the terms of the aggreement not specify the form and extent of the format used to satisfy the terms of the contract’s fiduciary terms.

  17. Ton Lea says:

    Just wanted to let yall know, that my husbands cousin tried to pay a hospital in exact change with 3 very large water bottles full of change(not just pennies), they refused and the out come was, since the refused payment of the bill, that the bill got wrote off. They did not owe it since payment was refused. Not sure if it went to court or not, will ask him when he gets home.

  18. cheezedawg says:

    This is half right. The Coinage act makes a distinction between paying a debt and paying for a good or service. A private entity cannot reject pennies to satisfy a debt, but it can reject them in exchange for goods or services.

    Indeed, the ability to pay any debt public or private with legal tender is fundamental to a fiat currency.

  19. Scott says:

    Correct me if I am wrong, but isnt the definition of legal tender “Legally valid currency that may be offered in payment of a debt and that a creditor must accept.” or “: money that is legally valid for the payment of debts and that must be accepted for that purpose when offered” Not sure where you people al think you can refuse legal tender.

    Checks, money order debit cards are all promisary notes promising a third party will pay. Because those are not legal tender business may refuse those payments.

  20. rob says:

    What about using pennies to pay a public entity, like the MTA of NY. Metropolitan transit authority has greatly increased the penalty charge for buying tickets on the train. If I offer to pay in pennies, do they have to accept my offer of payment? And if I’ve read the above comments correctly, they refuse to take the pennies, then I don’t have to pay?

    • Garrison says:

      If it’s for an “existing debt” they have to take it or it’ll discharge the debt either way, but for a purchase for goods or services, no, that can be negotiated/bargained for.

  21. Ben says:

    Not sure if anyone is still reading this post, but what if (this is a really stupid hypothetical):
    I purchase something from a store, pay my bill, grab my stuff off the counter and they print out my receipt with my change. Then when they hand me the change I inform them that I only accept unrolled pennies. As I am now a creditor do they have to satisfy their debt according to my currency wishes?

    • Garrison says:

      No, they owe you, it’s a debt/liability to them and per UCC 3-603, 604, you should take it because if you don’t, either way, the debt is discharged by operation of law.

  22. Joefish says:

    I just came back from a victorville ca. wallmart.My 11 yr. old daughter wanted to buy her little dogs some treats with a 3/4 torn five dollar bill. wanda, the cashier rudely says, I cant accept this!I reply. “Hey miss”, leagally you have to. She replys, “no i dont”!but i will this time! Whoever is right,it really doesn’t matter.Its that shi–y sevice we all expect from a corperate store! However curiosity still gets the best of me.so what is the real legality of this situation.If anybody can shed some light on this situation, and tell me what they know. I would be very appreciative of other peoples comments on this subject.

    • Garrison says:

      see “cheezedawg” 4/20/2011 above… A purchase for Goods or Services can be refused because they can be negotiated/bargained for. You can’t “FORCE” someone into a contractual arrangement/agreement with you that would be “Extortion”

  23. haveheart says:

    Here my 2 cents. (Pun intended) once when getting hamburgers at a DQ we were approched by a homeless person asking for food. Of course we gave him enough money to eat what we ourselves were about to have. But a few minutes later he tried to give us the mony back saying they would not allow him to buy a meal. We were astonished. Then angry. We marched right back to the window ordered the mean and then in full view handed it over to the homeless man. Now let’s look, at the homeless shall we? Do you think all homeless are drugies theaves hookers murders dare I include “zombies?” How much are you paid an hour? Are you a highly skilled person of a known profession, hold a college degree? Are you middle class? Upper middle class or lower middle class. How much money do you right now have in savings? Is it enought to keep your roof over your head utilities paid creditors at bay, ins. Gas for your car medications and of course the unexspected ER trip or whatever, is there enough in your savings to take care of all these bills for 6 months if your job was gone over night? Well let’s give you credit and say it was but guess what? 6 months has past and their is just too many people wanting what few jobs there is. Your kids are hungry. Turn to family? Ok ti tock tic tock tic tock family can’t affored to feed your family anymore and now its been 9 months so finely in desperation you pan handle. Wow, big day you managed to get four dollars in change and you head to wallmart all the while figuring out how much you can get that 4 dollars to buy, but when you reach the cashier, she says sorry sir we can’t take change but theirs a machine over there you can pay to use. True story. NOW THE GUY HAS 9.2 CENTS LESS. Sad I know. But you know what’s even sadder? Is how many fools reading this right now are thinking it can’t happen to them. Ya there is a Santa tooth fairy easter bunny and cheap land in florida id like to sell you. If the United States treasury has stamped it as legal tender it should HAVE to be accepted. Oh and the bum on the street corner holding the hungry sign? It says in the bibleb that people have entertained angels thinking they were beggers never knowing it was an Angel. Just “food” for thought.

  24. Garrison says:

    Well, I guess the author here has never read UCC 3-603 or 3-604 where it basically states that if a tender is “Refused” then the debt is discharged whether the recipient accepts it or not and that is via “operation of law”. The ONLY way the discharge can be charged back is if there is evidence of a dishonor per UCC 3-505, and they have 30 days to produce one, UCC 3-415.

  25. Blake says:

    This message is about paying a debt (not a good or service but a debt) with coins: I owed my methadone clinic two dollars. they alowed me to “charge” two dollars and pay it back the next time I came to dose. I am able to charge up to 12$ at any time, but I must pay it back before I can dose again. I realize its within the businesses right to deny me if i try to pay for a service or good with coins, but since I owed them 2 dollars, since I was indebted to them for two dollars, was it wrong for them to not allow me to pay my debt with 8 quarters? Keep in mind, this facility only accepts dollars not change nor credit nor debit.

    Please help me understand if this is legal.


Please Leave a Reply
Bargaineering Comment Policy


Previous Article: «
Next Article: »
Advertising Disclosure: Bargaineering may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website.
About | Contact Me | Privacy Policy/Your California Privacy Rights | Terms of Use | Press
Copyright © 2014 by www.Bargaineering.com. All rights reserved.