In the last few days we have seen QLD politician Bob Katter raise his concerns about the trend to a cashless society. While his concerns are valid I am more interested in the way he went about raising the issue and in ensuring that merchants understand their rights in relation to his comments.
The Incident
There is a detailed article here but the interaction went as follows:
Katter fired up after his crisp $50 note was rejected in payment for an order of fish, rice and vegetables on Tuesday.
“[The cashier] said, ‘we don’t accept cash’ and I said ‘well too bad for you, you have to, it’s legal tender and it’s illegal for you not to take cash’,” the 78-year-old independent MP told Sky News Australia on Wednesday.
“The manager came down … and he said ‘yeah it is the law, we do have to accept cash’.”
Let’s take a look at some of Mr Katter’s comments and see if they are actually correct.
Merchant Rights and Consumer Expectation
Is cash legal tender? Yes, cash is legal tender and must be accepted as the payment for a debt in Australia however as per the RBA’s own website, not accepting cash is not however illegal.
Can a merchant not accept cash? Yes, merchants are absolutely able to determine what forms of payment they accept including if they accept cash or not.
Again, from the RBA’s website: “If a provider of goods or services specifies other means of payment prior to the contract, then there is usually no obligation for legal tender to be accepted as payment.”
There are already plenty of examples of merchants that do not accept cash and many Australians interact with them successfully every day. How long has it been since you paid cash for a road toll? Have you tried to pay your eTag with cash? Have you ever tried to pay cash to Netflix for your monthly subscription?
So for the argument that cash is legal tender and therefore it must be accepted that’s incorrect as long as a merchant makes it clear to potential customers that cash won’t be accepted before the time of making their purchase.
So Bob Katter made an interesting point but shouldn’t have claimed that because he had cash the merchant legally had to accept it.
Regarding if moving to a cashless society is a good thing or not, well that is for another discussion.
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