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Can Your Business Refuse to Accept Pennies?

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By George Khoury, Esq. on September 29, 2016 4:04 PM

If your business conducts cash transactions, you've probably had to wait for countless customers to count out exact change to the very last penny. You may have even had plenty of customers pay an entire bill in loose change. While this can be annoying, most business owners would agree that getting paid in cash, coin, credit, or check, is still getting paid, and is still a good thing. There are, however, rare circumstances, like this attention-seeking grown man-child, where allowing a customer or debtor to pay in coinage just seems horribly inefficient.

Fortunately for private businesses, there is no federal law that mandates what type of currency a private business must accept. And according to one source, there are no states that have a blanket requirement that businesses must accept cash or coin. Just like a business can refuse to accept big bills, they can refuse coinage as well.

But Aren't Coins "Legal Tender"?

While coins are in fact legal tender, thanks to the Coinage Act of 1965, the Federal Reserve specifically explains on their website that a private business is free to develop their own policies on what forms of payment to accept unless state law mandates otherwise. The federal codes explain that dollars have to be accepted as legal tender, but never actually mandates which forms of dollars must be accepted.

An example of where state law requires acceptance of cash comes from California's landlord tenant laws. If a landlord refuses a tenant's payment of rent in cash, then a tenant basically gets excused from having to pay rent that month.

What Can You Do If a Customer Hands You a Bucket of Pennies?

If getting paid in buckets of pennies is a real concern, then consider posting a sign that says the business does not accept more than a certain dollar amount in coins per transaction (just like that "no bills over $20" sign on the register). While you may want to make that sale, you should recognize that accepting buckets of pennies could end up costing you more than you're making on the sale. Most banks charge hefty processing fees if the coins are not rolled, and paying an employee to roll the coins, even if using an automatic machine, is still a lengthy, and thus costly, process.

By being polite to your customer, and then explaining that you are unable to accept the unrolled coins in their 5 gallon bucket unless they are willing to pay the additional bank processing fees, you may be able to both save the sale and the customer experience. No customer expects that paying a bill with pennies will be a pleasant, un-embarrassing experience. If this is a regular issue your business faces, you can try to get an automatic sorting machine like a Coinstar machine, or notify your customers where the nearest sorting machine is located.

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