Is it legal for a shop to only accept cash as payment?

Every week we will break down, debunk and demystify your rights as a shopper in Australia. This week we are looking at retailers who specify what type of payment they want and whether that's legal.

We all know life is getting more expensive than ever before, and how important it is to stretch every dollar you make.

That's why each week we'll answer a question surrounding what shoppers are – and aren't – entitled to when dealing with retailers and manufacturers.

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No cash, no sale?

A few days ago I was waiting for the bus when I decided I should grab a bottle of water to take with me to work. There was a convenience store down the road from the bus stop, so I scrambled inside and grabbed a bottle. When I went to pay, the shop had a sign on the register that said "CASH ONLY". I only had my cards on me. Is it legal for shops to do this even though almost everyone uses card?

The short answer is yes, it is legal.

According to the Reserve Bank of Australia, the provider of the goods or services is "at liberty to set the commercial terms upon which payment will take place before the 'contract' for supply of the goods or services is entered into".

In simple language, as long as it is made clear before a product has been purchased or a service has started, it is legal for a business to dictate how it would like to be paid – as long as the other party agrees, of course.

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This is why it was legal for some businesses to accept only cash during the height of COVID-19, and why it's legal for little vending machines to say they'll only accept gold coins.

They are laying out the terms of the sale before you enter into it.

Now, given it is 2022 and many people use digital payment methods, it's likely to heavily restrict your business if you stipulate that you'll only accept cash.

A lot of people are also wondering about tax.

Yes, the Australian Tax Office is highly – let's say extremely – aware that some businesses use cash transactions to avoid meeting their tax obligations.

This is referred to as the "black economy", a whole sector of money changing hands without any tax paid on it at all.

Again it's legal to operate a cash only business, as long as you keep thorough records and pay the correct amount of tax.

The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.

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