The "Legal Tender" myth

[old man emu]

Those of us who have grown up before the age of the credit/debit card and other associated electronic payment methods often hold the belief that it is illegal to refuse to accept currency notes or coins (in reasonable amounts) to satisfy a debt. We rankle at having to use plastic for trivial purchases under, say $5 to $10. Surely, if the Government mints coins and prints currency notes (which bear the wording "Legal Tender"), then it must be illegal for a creditor to refuse them. But this is a myth.

 

A business can publish the terms and conditions for payment, and in those terms rule out the acceptance of coins and printed currency. The conditions would also have to include options for payment by non physical means. We have long seen signs that say that cheques are not accepted, and we accept that because we understand the concept of the rubber cheque. But since good ol' COVID19 many businesses have altered their terms and conditions of trade to allow them to refuse accepting physical items in payment.

 

Service Stations have these conditions displayed at the their front doors - a pretty silly location since the customer has already taken delivery of goods (petrol) before going to pay and before being able to see the sign. One soon learns, however. Today I went to the library to pick up a book on interlibrary loan. The fee was $2, but my coin was not accepted. But I did not want to use my debit card that was in my wallet. My financial institution allows a certain number of free "tap'n'go" transactions per month before it starts charging a fee. Likewise there is a limited number of free EFTPOS transactions allowed per month. You can see that over a period of a month, those limits are going to be passed if every single transaction has to be "on the plastic". Fortunately I was told I could pay later.

 

And then there is the cost of using the plastic. As part of its terms of trade, ALDI charges a fee for the use of cards. But if places will not accept coins and printed currency, who is going to carry large amounts of cash (remember a weekly grocery shop can be over $250) just for one shop. Businesses are permitted to charge a fee, equal to the processing cost, on electronic transactions. With, say conservatively, 10 million Australians making these small transactions every day, a fee of a dollar here, fifty cents there is a great little earner for the Banks, since the actual cost of maintaining the electronic databases for financial transactions probably sits close to a cent or two per transaction.

 

According to research by market analyst East & Partners, cash payments across Australian businesses could fall below 2 per cent by 2022, creating a virtually cashless society. The Commonwealth Bank of Australia, on the other hand, has taken a more conservative approach, predicting that Australia will be cashless by 2026. In light of recent events, this change may occur sooner than expected. 

 

I suggest that people exchange $188.65 in credit to obtain one of each printed note and  minted coin in uncirculated condition and put them aside as family heirlooms for the generations to come. Perhaps by 2030, or earlier, these things will no longer be produced.

[spacesailor]

It,s happened already with the barter system Trying to beat that 10% tax on everything !.

And Big business trying desperately shuffling paperwork around to minimisse showing a good prophet.

Keeps the shares down & more for the executives.

spacesailor

[red750]

I hardly ever carry cash. I've had 85c in coin in my pocket for over a month. If I need cash, eg the pizza shop charges $2 for using EFTOS, then I buy some groceries at Woolies and get the required cash out of the checkout. I pay my bills by Bpay and pay over the counter by tap'n'go.

 

Currency does carry a lot of unwanted stuff. I will always remember being a bank teller in the 60's. One business customer was a fish shop. When they banked their takings, it stunk to high heaven. If currency can carry fish odour, imagine what germs it can carry and spread.

[pmccarthy]

My mum always told me not to put coins in my mouth because the Chinamen put them somewhere else.

[Jerry_Atrick]

Just to correct you on one thing, OME, the vendor always has to accept physical legal tender... It's just the means he accepts the transfer from you to him can be stipulated. So, when you move money electronically from one account to the other. you are transferring ownerhip of physcial currently you own (or have right to use).

 

I can't think of the last time I used cash. maybea few coins for car parking not too long ago.. I have had the same £5 note in my wallet for about 6 months - even the moths have moved out... These days, swiping the card (or phone or watch) for a 35p transaction is not unusual. Almost eveyone in the local convenience store lets out a collective sigh when a biddie pulls out her purse and starts counting notes and coins.

 

Of course, payment companies don't charge the consumer and extra fee; and vendors are prohibited by law for charging a transaction fee. So the price you see is what you pay...

 

Although, swiping a card/phone/watch does have a drawback if one is out having a few drinks with mates.. Those few drinks can add up pretty quickly if all you do is swipe the card and don't see the cash exiting your wallet/account.. Suddenly, you've spent th dinner money without knowing it.

[old man emu]

1 hour ago, Jerry_Atrick said:

Just to correct you on one thing, OME, the vendor always has to accept physical legal tender. Of course, payment companies don't charge the consumer and extra fee; and vendors are prohibited by law for charging a transaction fee. So the price you see is what you pay...

That might be the case in the British Utopia, but out in the Antipodes the opposite is the rule.

 

1 hour ago, Jerry_Atrick said:

Almost eveyone in the local convenience store lets out a collective sigh when a biddie pulls out her purse and starts counting notes and coins.

Hmmm! Convenience shop checkout - the place where Karens congregate 

[Jerry_Atrick]

22 minutes ago, old man emu said:

That might be the case in the British Utopia, but out in the Antipodes the opposite is the rule.

Yes, but it is to enlighten you to take action against your financial oppressors... 😉

 

22 minutes ago, old man emu said:

Hmmm! Convenience shop checkout - the place where Karens congregate 

Hmmm.. another quaint ritual from the colonies, eh?

 

 

Edited November 30, 2020 by Jerry_Atrick

[Old Koreelah]

Yep, cash is dying out far faster than predicted, but we’d be crazy to rely totally on electronic transfers. I carried the same notes all thru COVID, until I needed them when the system was down.
Now that relations with the Middle Kingdom are frigid, expect more hacking events and Denial of Service outages.

 

[Yenn]

I was in WA years ago and needed something from a plumbing supply shop. The internet was down and I could not buy it. They did not even know the price they were asking and would not accept the notes I offered which was a fair price, probably more than they were asking.

[onetrack]

Yes, I've been in the same situation where the transaction system went down and they couldn't accept cash either, as they had no facilities for cash handling. This is often done to prevent petty theft, many pubs lose a lot to employee pilfering.

 

One of the things that annoys me is the charges laid on you by the likes of auction houses, who charge a 1% "handling fee" for taking cash!! That should surely be illegal, but they get away with it.

[Jerry_Atrick]

I can't understand why banks or vendors charge for electronic transactions - the cost is so much less for them than handling cash.. In the old (and current days), you pay a shop cash, they have to count it, manually reconcile to the till, take it all - often at great risk of being robbed - to the bank; or use secure transport like Armourguard - which is additional cost.Of secure transport companies get involved, that is obviously a cost and needs a further reconciliation. Then  it gets to the bank where someone has to count it and handle it/store it... ank branches only keep a certainamount of cash so they have to ship any excess (or if they are down, they have to have it shipped in). Then, of course, the damaged notes and coins have to be transported for destruction and replacements minted.

 

Compare this to leaving the curerncy in the vaults and having a record of ownership. Oddly, with the advent of bitcoin (well, blockchain technologies), it is even cheaper than it was to securely manage the electronic transfer of ownership. All you are doing is moving a few electrons around and using a bit of disk space. Yes, you need teams to manage and support the electronic systems, and individually, they are expensive. But as a collective cost, it is far cheaper than the old manual cash way.

 

The main problem, as above,  is when the tech fails or servicing some of the more remote regions. It can be addressed as the amount of information that can be stored on the cards these days is a lot.. For example, when I first came to the UK, my debit card had £100 printed on it.. It was the amount that the bank would guarantee to the vendor if I wrote a cheque or had to use the card for manual payment. That has since gone, however, a scard scanner can, without reference back to the banks' central systems work out how much your balance was last and how much you have since spent.. and what should be left.. You could also put a limit of offline transactions based on the cardholder's financial capacity, etc. The scanner can add to the transactions on the card (or fail the transaction because of the limit), store the transactions and when the connections come back up, the transactions are fired to the payment provider/bank.  There are different ways of handling it... Just needs to be thought through...

 

If I were a bank, I would be charging for handling cash and making electronic transactions free...

[spacesailor]

YES

IT.S GREAT for those in the know !.

BUT

Lesser mortals get robbed blind both by the banks and crooks. (If there's any distinction ).

Even the mortgagee  (bank ) put any extra money, that I wanted off my mortgage, into a NON-INTEREST ACCOUNT, without informing me.

spacesailor

[Jerry_Atrick]

I would say it is because Australia has weak regulators, and this was borne out by the Royal Commission.. where it was found the NAB drafted public responses by ASIC to complaints or issued consultations, or something similar... You wouldn't believe it. The UK had the Financial Serviuces Authority, which was directed by Labour Treasurer at the time, Gordon Brown, to use light-touch regulation - and that is one of the reasons why we had the financial crisis in 2007/2008 hurt so much here... Thankfully, the EU financial regulator, although went overboard with the conduct regulations, were not having a bar of this light touch stuff anymore. Unfortunately, in that light-touch era, the UK regulator lost of lot ofskilled and experienced regulatory staff who knew where to look.

 

If you tighten up the regulators so they are accountable for doing their job properly, mandate in banking law the necessity to treat the customer fairly and act in their best interests (which is law here since the crisis), and have the guts to clamp down on their unfair practices, as well as have an ombudsman/person with teeth, these practices will go away...

 

Because of the importance of credit records, I proposed a law change that an institution neglecting their duties of accurate notification to the credit agencies that has a detrimental impact on a consumer's credit record is to be automatically held to pay £5,000 compensation to that consumer and that value should index with a financial services profitabiilty index, not CPI or other price indexes... It was met with ferocious objections and never made it to a formal submission, but it would mean they would clean up their act...

Edited December 1, 2020 by Jerry_Atrick

[spacesailor]

BUT.

People without a driving licence can,t even access their credit score, due to having to put that licence number on the aplicantion form.

spacesailor

[onetrack]

Spacey, if you have access to a computer and an email address, you can access your credit score at several websites quite easily, without the need for a drivers licence number.

 

All that is needed is your date of birth, and two forms of ID, such as a copy of a birth certificate, a passport number, or a medicare card number.

 

Other acceptable forms of ID such as Veterans cards or other verifiable Govt-issued cards are likely to be acceptable, if you explain you don't hold a drivers licence.

 

https://www.finder.com.au/free-credit-report

Edited December 1, 2020 by onetrack

[spacesailor]

No Internet on my phone? !.

So finder didn,t work.

spacesailor

[onetrack]

You need to find an internet cafe, or a library with internet-connected computers.

[spacesailor]

AS for legal tender?  I received a one dollar coin, that said  it was a " donation " coin,

And it wasn,t donated to me, ( green paint on one side ).

spacesailor

[red750]

Let's reactivate this discussion. I received this today.

 

💰A cashless society means no cash. Zero.

 

💴 It doesn’t mean mostly cashless and you can still use a ‘wee bit of cash here & there’.

 

💵 Cashless means fully digital, fully traceable, fully controlled. 

 

🤔 I think those who support a cashless society aren’t fully aware of what they are asking for.

 

😳⚠️ A cashless society means:

 

* No more tuck-away cash for those preparing to leave domestic violence.

 

* No more purchases off marketplace unless you want to risk bank transfer fraud.

 

No more garage sales.

 

* No more cash donations to hungry homeless you pass.

 

* No more cash slipped into the hands of a child from their grandparent.

 

* No more money in birthday cards.

 

* No more piggy banks or tooth fairy for your child.

 

* No more selling bits & pieces from your home that you no longer want/need for a bit of cash in return.

 

* Less choices of where you purchase based on affordability.

 

*What a cashless society does guarantee:

 

* Banks have full control of every single cent you own.

 

* Every transaction you make is recorded.

 

* All your movements & actions are traceable.

 

* Access to your money can be blocked at the click of a button when/if banks need ‘clarification’ from you which could take weeks, a hundred questions answered & five hundred passwords.

 

* If your transactions are deemed in any way questionable, by those who create the questions, your money will be frozen, ‘for your own good’.

 

I’m sharing this because it maybe we all need to take off our blinkers.

 

❌ Forget about cash being dirty. Cash has been around for a very, very long time & it gives you control over how you trade with the world. It gives you independence.

 

✅ If you are a customer, pay with cash. ✅ If you are a shop owner, remove those ridiculous signs that ask people to pay by card.

 

💰 Cash is a legal tender, it is our right to pay with cash.

 

😳 Banks are making it increasingly difficult to lodge cash & that has nothing to do with a virus.

 

🛑 Please stop believing everything you hear on the TV.

 

❌ Almost every single topic in today’s world is tainted with corruption & hidden agendas.

 

❌ Politics & greed is what is wrong with the world; not those who are trying to alert you to the reality.

 

✅ 💰💵👍🏻 Please pay with cash & please say no to a cashless society while you still have a choice.  

[spacesailor]

Similar to the Republic vote ! .

While a Democracy can vote to become a Republic. 

A Republic will Never allow a vote , to become  Democracy. 

spacesailor

 

[facthunter]

I think you would be referring to a "theocracy" like IRAN.  Kingdoms are the opposite of Republics. A non democratic system is also an Autocracy.   Nev

[spacesailor]

England  didn't do well as a Republic AND had to resort to violence,  to become the Democracy as we know it .

France became a Republic,  and can't get away from it's Violence. 

Including Vietnam.  The French colony. 

spacesailor

 

[old man emu]

2 hours ago, red750 said:

Access to your money can be blocked at the click of a button

Not only through the "protective" actions of the financial institutions. For some reason, my current debit card (no credit cards for this little black singed duck) won't do the tap'n'go thing. Which is a blessing in disguise because I only get 5 free ones a month before I pay for ever further use. Makes you wonder how much the Gnomes of Zurich are raking in from Millennials who don't seem to know how to insert it. 

[octave]

I am pretty sure we have flogged this subject to death before.

 

1 hour ago, red750 said:

I think those who support a cashless society aren’t fully aware of what they are asking for.

 

 

I am someone who operates cashless nearly all the time.  People seem to think that therefore I am somehow advocating for everyone to go cashless. In fact, I don't particularly care what others do.  It is none of my business.   I operate cashless because it is cheaper and easier.

 

 

1 hour ago, red750 said:

No more garage sales.

 

This one is easy to dispel.   A few months ago my 90-year-old mother who lives interstate ended up in the hospital and from there opted to go into aged care. It was up to me and my wife to put her house on the market. The house sold quickly and we had to dash over and empty her house over a 3 week period.   This meant selling most of her possessions.  My mother lived on an estate that was exclusively for older people.  Over the next 3 weeks, we had an ongoing garage sale.  Initially, we thought that most buyers being older folks would insist on paying with cash.   This in fact only happened twice. we were quite surprised that these older folks were quite with it when it comes to technology.  Before we started selling things we went to the bank to get a selection of denominations. This meant trying to predict how many $5 notes we would need, whether would we need coins, and what denominations.  In fact, this ended up being totally unnecessary.    Most people opted to do bank transfers the money going straight into my mother's account and a few used Paypal.   People who were just passing by were not limited by how much money they happened to have in their pockets.  I would suggest that this is how most garage sales operate these days.   

 

 

 

2 hours ago, red750 said:

Banks have full control of every single cent you own.

 

Not even sure what this means in practice. Aged pension also goes through a bank. 

 

 

2 hours ago, red750 said:

No more cash slipped into the hands of a child from their grandparent.

 

I would suggest that in these modern times, kids are like;y to have bank accounts and are likely to be more financially literate than in days gone by.   As a child, my grandmother would give me 20 cents a week of spending money.  This did not stay in my pocket long. perhaps if it had gone into a bank account I might have learned to save up for something rather than blowing it straight away

 

2 hours ago, red750 said:

No more money in birthday cards.

 

Do people still send birthday cards? 

 

2 hours ago, red750 said:

No more selling bits & pieces from your home that you no longer want/need for a bit of cash in return.

 

 

Why?  No different from selling my mother's possessions.   In our house, we kind of have a voluntary simplicity philosophy. This means we don't tend to keep things that we no longer need, we would rather someone use these items rather than them taking up our space.   I sold a few things this week and I was not impeded by lack of cash either on my part (change) or on the buyer's part. No one in recent times has offered me cash.

2 hours ago, red750 said:

Less choices of where you purchase based on affordability.

 

I have not found this to be true.   We bought a new range hood last week from Appliances Online.   Delivered to the door (free) delivery.  I don't believe I have had limited choices due to not paying with cash.

 

2 hours ago, red750 said:

Every transaction you make is recorded.

 

Maybe.   I am not sure what the downside of this is really.  I would be more than happy to share my Woolworths shopping list from my delivery this morning. 

 

2 hours ago, red750 said:

All your movements & actions are traceable.

Yep. I always carry my mobile phone.  

 

 

2 hours ago, red750 said:

Access to your money can be blocked at the click of a button when/if banks need ‘clarification’ from you which could take weeks, a hundred questions answered & five hundred passwords.

 

 

I guess this is true.   Most people are not paid in cash therefore at some stage you have to deal with a bank.  If you are worried that a bank will block your account then surely this could be also done by the bank blocking your cash withdrawals or ATM withdrawals.   Sometimes there is a good reason to block someone's bank access, proceeds of crime, drugs, or terrorism.

 

2 hours ago, red750 said:

 Forget about cash being dirty.

 

Yeah, I am not worried about that.

 

2 hours ago, red750 said:

It gives you independence.

 

Yes and no.   If my mother had adopted modern methods she probably could have stayed in her own home longer.  As a 90-year-old getting a taxi to the bank became too much.

2 hours ago, red750 said:

If you are a customer, pay with cash. ✅ If you are a shop owner, remove those ridiculous signs that ask people to pay by card.

 

💰 Cash is a legal tender, it is our right to pay with cash.

 

I have given this example before and nobody ever comments on it.   I worked at a music studio that was situated in an industrial area. My wife managed the studio for the owner (he managed our other branch)   The students were expected to pay for a whole term's worth of lessons upfront on the first week. At the time this would have been $350 per student. you can see that as we had over 1200 students that on any given day there could be a lot of money in the cash draw in an area that was not very busy at night.   We never had to have a policy because hardly anyone wanted to pay by cash.   Often the kids would come up by themselves the parents having paid by direct deposit or over the phone.  Even though the business took in a lot of money in a day it did not require a safe or a nervous walk to the night deposit safe at the bank. it also did not require much counting of cash and tallying up at the end of the evening.    I can see why many sole traders do not like having to deal with cash.  I remember when we lived near Canberra and the attendant at our local petrol station was stabbed to death in a robbery gone wrong.   

 

 

2 hours ago, red750 said:

Please stop believing everything you hear on the TV.

And on Facebook!

 

2 hours ago, red750 said:

Please pay with cash & please say no to a cashless society while you still have a choice.  

I  estimate that more than 90% of my purchases are online.  I am not sure how I could achieve this with cash.  Apart from that as I get older I do not want to lose the ability to function in the modern world. When I walk along city streets I do not envy the queue at the ATM or people waiting for the bank to open.  When I do shop in person I do not have to predict how much money I am going to spend or worry about being mugged. If someone asks for my wallet they can have it, but it will not do them any good.

 

 

2 hours ago, red750 said:

No more cash donations to hungry homeless you pass.

 

Oops nearly missed this one.   This is easy to dispel.   At my local Woolworths there are usually one or two homeless (I assume) people.    Firstly if they were not getting any "donations": they probably would not bother being there.  What I see and I have done this myself is that instead of giving cash which could be spent on anything people tend to give food or a coffee or fruit etc. I believe this is better than giving money.  I have even given someone a Woolworths voucher.  There is a man there a couple of days a week who sells the Big Issue and I noticed he has the capability of accepting digital payments and this is what most people do. 

 

I reallly don't care what people choose to do and I accept that there are pros and cons however I think some of these points are exaggerated or actually untrue.   Dealing only in cash does not for the average person cut out of the bank.   If the system goes down my digital methods of payments may be affected but those who draw out money will also be affected.  I would argue that almost no one operates purely on cash. if you buy a car you don't go into the showroom with 20k in your pocket. if you are a pensioner your income still goes through a bank 

[red750]

On 20/08/2023 at 5:21 PM, octave said:

I operate cashless because it is cheaper and easier.

Not for long. Once cash is dead, they have you over a barrel and can charge what they like. What right does the bank have to tell me what I can and can't buy with MY money.