Cash declined: are stores allowed to refuse cash payments?

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Cash payments seem undesirable since Corona.

Even bakers, butchers and pharmacies want their customers to pay by card.

Consumers who prefer coins and bills are faced with the question of whether stores can refuse to accept them.

The answer is a resounding “yes, but”.

And then what?

It seems that cash payments are on the decline in Germany.

Last year, 60 percent of citizens paid for everyday goods in cash, according to a survey by the Bundesbank.

Compared to the previous survey in 2017, however, this was a decrease of 15 percent.

The volume of sales paid in cash also fell from around 50 percent to around a third.

At the checkout counters, customers mainly paid bills of up to 20 euros in notes and coins.

According to the survey, card payments dominated for amounts above this.

Their share grew to a third, the share of sales to almost 50 percent.

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Mobile phones as a replacement for the wallet are still relatively rare, as the Bundesbank and the industry association Bitkom found.

Nevertheless, Corona is accelerating the trend away from paying with cash.

Euro is legal tender

However, in Germany, coins and notes denominated in euros are the only legal tender.

An acceptance obligation is derived from this.

Johannes Beermann, member of the board of directors responsible for cash at the Deutsche Bundesbank in Frankfurt, explains: “Everyone is required to accept payments with euro banknotes or coins as the proper fulfillment of a liability.” Basically at least.

There are exceptions, however.

The first is derived from the Coin Act (Section 3, Paragraph 1, Clause 2).

Accordingly, neither a shop nor a pub is obliged to accept more than 50 coins or to allow purchases over a total amount of 200 euros to be paid in cents and euro pieces.

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The second exception is much more relevant for everyday life and results from the freedom of contract between retailer and customer.

It is therefore up to them to agree other payment options with each other (Section 14 (1) sentence 2 of the Bundesbank Act).

According to Beermann, this ranges from excluding certain banknote denominations to specifying a certain type of payment.

Customers must be informed if cash is declined

In principle, a shop or restaurant can completely exclude the acceptance of cash.

If businesses use such rules, they have to make them aware of them.

"The customer must be informed of the payment conditions before the purchase is made," emphasizes Ulrich Binnebößel from the HDE trade association.

This is usually indicated by signs in the checkout area.

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Customers don't have to accept that.

"I have always successfully ignored signs that refuse cash payments with a friendly smile," says Hartmut Walz, professor of business administration at the Ludwigshafen University of Applied Sciences and an advocate of cash.

His advice to anyone who doesn't want to pull out a card: “Vote with your feet and leave the shop or pub.

We don't have to contract with providers who reject our cash. "

In fact, there is hardly a shop that will refuse to accept banknotes and coins.

The pressure of competition in stationary retail is far too high.

"No retailer will really be able to afford to forego accepting cash in the long term," says HDE man Binnebößel, describing the situation.

Like Walz, Binnebößel also points out the possibility of going to another store if one of them does not want the cash.

In addition, the alternative giro card remains.

According to the HDE, there are around 100 million of them.

So theoretically every citizen has more than one of these money cards.

If you don't have any and don't do anything with cash, you can have goods put back.

Do authorities have to accept cash?

It is controversial whether public institutions may refuse to pay in cash.

The Federal Administrative Court will soon make a landmark decision on this.

He is the case of two Hessians who want to pay their radio license fees in cash and went to the European Court of Justice (ECJ) to do so.

The corona crisis is driving the money revolution

The corona crisis triggers a small revolution in Germany.

Since the beginning of the epidemic, cash has been dispensed with more and more for reasons of hygiene.

Paying by card or even by mobile phone is experiencing a boom in the land of cash lovers.

Source: WORLD

He said that public administrations, such as the tax office and fines, have to accept coins and notes, but the EU states can restrict this (judgments of January 26, 2021, cases C-422/19 and C423 / 19).

The Federal Administrative Court now has to clarify details for Germany.

Cash is a store of value

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Even if consumers increasingly pay for their purchases, from pharmacies to supermarkets and petrol stations, by card, from the Bundesbank's point of view, cash continues to fulfill an important function: the iron reserve for bad times.

"It is used extensively as a store of value," states Johannes Beermann.

This fits in with the fact that the value of the notes issued by the Bundesbank in 2020 was ten billion euros higher than in the previous year.

The banknotes in circulation (net), comparable to demand, rose by 70 billion euros, 21 billion of which in the first lockdown month of March 2020 alone.

Cash friend Walz praises its “robustness”: On the one hand, stashing cash helps against negative interest rates.

On the other hand, in contrast to digital payment methods, consumers remain liquid even in the event of system failures as a result of hacker attacks, power outages or currency crises.

But there were also situations in which Walz reluctantly picked up the card.

In the library of his university, of all places, he had to pay a fine of two euros for a book that was returned too late.

Customers are increasingly using their cash cards to make payments.

The corona pandemic has intensified this trend

Source: dpa-tmn