Card only: Is it illegal for a business to refuse cash?

While cash is legal tender, businesses don’t have to accept cash in some circumstances.

Many people believe that because cash is “legal tender” that it is illegal for a business to refuse it.

But is that the case? In recent weeks there was a fresh round of controversy on social media over 'card-only' policies in place in some businesses. 

Paul Dolan, who runs The Barn in Glanmire, Co Cork, told the Irish Examiner last month that the ‘no-cash, card-only' policy in his gastro-pub policy has ensured lower prices for his customers.

So, can businesses refuse to take cash? 

While cash is legal tender, businesses don’t have to accept cash in some circumstances.

Individual transactions are governed by contract law in Ireland and terms of settling credit includes payment methods.

This means that at present, as long as a business notifies customers in advance that they only accept payment in certain specified methods, they can legally refuse cash.

In December last year, then finance minister Paschal Donohoe confirmed this in a written Dáil answer.

“If a business specifies payment must be in a form other than cash, the customer cannot subsequently claim a legal right to pay in cash, even if that cash is legal tender. Therefore, under certain circumstances, retail businesses or service providers can refuse to accept payment in cash.” 

The cost of cash 

Speaking to the Examiner, Mr Dolan said a post-Covid analysis put the cost of accepting cash at 16%, including higher insurance costs for having cash on the premises, security company charges for collecting and transporting their cash, banking fees for lodging and withdrawing it, extra staff costs associated with organising and reconciling tills, and the 2.5% industry standard ‘cash drawer shrinkage’ rate.

Paul Dolan of The Barn in Cork. Picture: Denis Minihane

Accepting cash would push the price of their all-day carvery lunch from €14.90 to €16.20 and the cost of their full Irish breakfast from €10.70 to €11.70, he said.

“We decided that the vast majority would prefer incredible value and pay by card,” he said.

“98% of card transactions are by debit card. We pay 0.19% on that transaction. There are no transaction charges for the customer to use a debit card in Ireland.

"To us, it’s a no-brainer. People are voting with their feet.”

Mr Dolan said the card-only policy had not drawn any complaints from those who dine with them.