More and more US Businesses refuse to accept cash

Try to spend C-notes outside of the US... no one wants them. They are hard enough to spend here. Companies want you using their own currency (gift card). Seems there is a shift from the Cash is King days to No Cash accepted.

http://www.isitlegalto.com/new-york-law-legal-forum/3209-illegal-not-accept-cash.html

"Recently, when we came across a restaurant in Manhattan’s Greenwich Village that had adopted a credit-card only policy, we thought it might make for an interesting little non-law related piece for the WSJ.

But of course, as it turns out, there’s a legal angle (isn’t there always)?

Let’s get to that in a minute. For now, the story. Tucked at the end of one of the shortest streets in Manhattan lies a well-regarded restaurant called Commerce, which opened early last year. On Wednesday, the restaurant adopted a new policy: it would no longer accept cash. That’s right: it’s credit and debit-cards only at Commerce, which dishes out $13 cocktails and $23 plates of spaghetti carbonara, among other fare, to its mostly well-heeled clientele.

So what’s the deal? The restaurant’s co-owner, Tony Zazula, said the convenience and security afforded by going cashless are well worth the added cost of the transaction fees imposed by card-issuing banks. Gone is the age-old restaurateur’s fear of getting robbed, either by outsiders or his own employees. “No more armored trucks,” he says.

Fair enough. But is this whole project legal? On first blush, there’s the whiff of something being illegal about it — aren’t greenbacks “legal tender” for “all debts, public and private?”

We asked Zazula about that, and he referred us to this page on the Department of Treasury’s Web site.

The applicable statute governing legal tender is Section 31 U.S.C. 5103, which states, simply: “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.”

Okay. That doesn’t sound like it works in Zazula’s favor. But Treasury explains:

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. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

Nevertheless, a reader named Justin McLachlan sent us this alternate perspective, which we considered provocative enough to put up here. Writes McLachlan:

Treasury’s interpretation is right — they’re talking about the concept known as an “offer to treat” or “offer to bargain” and generally, transactions where the obligation to pay arises and goods or services are received simultaneously. A store can forbid, say, bank notes over $50 because the person shopping there is made aware of the store’s terms before any debt is occurred. Say I want to buy a candy bar at a gas station, but I’ve only got a $100 bill. The store refuses to take it and since I’ve not yet incurred a debt with them (I haven’t eaten the candy bar), they don’t have to take my $100 and I don’t owe them any money. We simply walk away.

But in a restaurant, you usually pay after you’ve eaten the food. You’ve incurred a debt, and you’re allowed to pay for it later. It’s not always clear how much the final bill will be or what payment forms will be accepted and without putting it in writing, it’s difficult to say I knew that they wouldn’t take cash or that they don’t take Discover, etc (did I fully understand the terms of the offer?). A restaurant that allows someone to incur a debt (eat their food) and pay later becomes a creditor and would be required to accept legal tender to satisfy that debt, unless there was some offer to treat or bargain in the mix, say they explicitly told their customers — in a very noticeable way — that they would only accept credit for payment and you still decide to eat their food or they make you pay up front before you even get it.

We’re not sure if Justin’s right, but we liked how he expressed his point. In any event, the other night at Commerce, at least during the hour or so we were there, the staff members all made it very clear to patrons prior to their ordering that they weren’t accepting cash, thus, in our view, circumventing Justin’s issue."

 

I wonder what his plan is when the internet is down or phone service, how will he process cc's? Sure he can use a mechanical swiper but there's no authorization (approval) to pay from the cc company.

I'm sure he has this figured out but shit happens.

 

Then he will take the sign down and gladly relieve you of your cash.

 

There is a manual credit card machine where you slid the card in a box and the shaft at the top copies the info on a paper. Customer then signs this paper.

when the power/internet comes back on, you manually enter the info to the system.

 

We had to do this at the store about a month ago. Out store also takes gold and silver as payment forms as. We have the files to scrap off enough to covers the cost plus tax. What ever happened to king dollar? Larry K. where ever you are you were right.

Akuma

 

Restaurants are also one of the businesses that most frequently falsely charge people's credit cards....

 

why would you want to pay with cash. paying with credit is 2% cheaper.

 

I don't care if you pay by card, but always tip in cash, especially if you are a big tipper like me. (Waitress has to declare it on the card and can declare less with cash.)

Yea for the underground!

 

-Last years Ny Post article.


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Cash is king at local restaurants and bars struggling with a tight economy and small profit margins.

To avoid paying credit-card fees and -- shhh -- maybe fudge income numbers for the tax collector -- some merchants are treating credit cards as if they aren't worth the recycled plastic they're made of. In those places, cold cash is the only way to buy a hot meal.

Those in the know say the trend is growing.

"I think there are obvious advantages, both legal and illegal, with the cash-only approach," said Nick Fauchald, editor in chief of the popular foodie Web site Tasting Table.


Ben Parker
PAY WHAT? Diners try to scrounge up the bills to cover the tab at the cash-only Bar Pitti in the West Village.
Veteran restaurant consultant Michael Whiteman said: "It definitely feels like it's more of an accepted practice now. You notice it more and more. When times get tough, restaurateurs look to cut costs."

One Brooklyn cash-only restaurant owner estimated that 5 percent of his gross sales had been going to the card companies.

"The fees the card companies charge hurt the smaller venue," the owner said. "But it's a gamble. You are going to annoy some customers."

One aggravated customer is Christine Hanna, 26, of Brooklyn Heights.

She went to Grimaldi's pizzeria in Brooklyn with pals on Saturday and discovered the legendary pizzeria -- briefly shuttered in 2008 for owing back taxes -- was cash only. An ATM outside charged a $4.50 fee, which she refused to pay.

"This is ridiculous," Hanna fumed. "The cash-only thing is just really annoying sometimes."

Some cash-only venues plant ATMs in a corner. Staffers point flustered customers in its direction, and the restaurant or bar profits from the transaction fees.

While straight cash offers financial benefits, there are potential pitfalls.

The Internal Revenue Service homes in on cash-only businesses.

"I think it's pretty well-established that the IRS is particularly interested in cash-only businesses, including restaurants," said Manhattan tax attorney Allan Pearlman.

A Williamsburg restaurant owner said, "It's a trade-off between what you save and who you lose in terms of customers."

That means people like Hanna.

"I've actually gotten up and left places that are cash-only," she said, still smarting from her confrontation with the price-gouging cash machine.



Read more: http://www.nypost.com/p/news/local/plastic_now_off_the_menu_MysBpYobRgR3wD1fvCv0WO#ixzz1YAUd1zVT

 

Universities in my country did extensive research and they found 2/3 of all restaurants/bars would have to close the next day if they couldnt pay their staff/supliers off the books anymore.

Labour costs here are at Scandinavia levels but still...