Discussion » Questions » Legal » In the jurisdiction where you live, is it legal for businesses like barbershops, nail salons and carwashes to operate on a cash-only basis?
Reverend Muhammadovsky

In the jurisdiction where you live, is it legal for businesses like barbershops, nail salons and carwashes to operate on a cash-only basis?

I went to have my hair cut today. I got my credit card out to pay, whereupon the barber told me they only took cash. No explanation was given.

The transaction was more than £5, which some businesses set as the lower limit for card payments. Had the barber told me that the card reader was broken, I might have believed him, but even this would have been a poor excuse, because with 4 or 5 people working there you'd expect them to have more than one card machine. If this had been eight or nine months ago, I would have been surprised, but with people increasingly using contactless payments even for small transactions since the start of the pandemic, a business refusing to take cards is an anachronism, and it makes me wonder whether there's something else going on.

Do you think this could be a sign that the business is a money-laundering operation?

Posted - October 31, 2020
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Responses


  • 5808
    They lose money on card transactions
      October 31, 2020 7:52 AM MDT
    5

  • 8214
    Not necessarily; a small business can't afford the credit card charges sometimes. 
      October 31, 2020 10:11 AM MDT
    5

  • 10635
    Cash only is the prefered way here. 
    Businesses must pay the card company (Visa, MasterCharge, etc.) to accept credit cards - every time a card is used.  Small businesses pass this fee onto the customers, while many larger businesses waive the fee (add it into the cost of operating).  Note - this fee is why most gasoline stations charge more for credit than cash.   Instead of going through the hassle of collecting the card fee, paying each card company, and all of the paperwork involved, many small businesses simply don't accept credit cards.
      October 31, 2020 10:12 AM MDT
    5

  • 44603
    Some small businesses here have a minimum for credit/debit card use. Large ones can't do that as they would lose many customers. I did business with a pool supply store that wouldn't take cash, though. This post was edited by Element 99 at January 10, 2021 10:53 PM MST
      October 31, 2020 10:19 AM MDT
    4

  • It is, but it's common practice to post a sign that says "CASH ONLY" on the front of the business. 
      October 31, 2020 1:13 PM MDT
    4

  • 34251
    There is no law requiring a business to accept cards/checks/etc here.  

    It is just a sign the at it is a small business and they do not want to  pay the fee associated with accepting cards.  Normally, they are charged a fee per transaction, a fee per daily deposit, a percentage of the sale, and there are minimums charged regardless of sale amount. 

    I used to have to have a dial up credit card machine (required a landline), this was the only reason I had a landline.  So I was paying the credit card fees and the cost of a phone monthly.  

    It is possible now to get a much better rate with no additional fees. But you have to do you homework and find them.  

    I use a company that works with an app on my phone (an old one), and gives me a basic flat rate of 2.25% with no extra fees. This post was edited by my2cents at January 11, 2021 8:25 AM MST
      October 31, 2020 2:01 PM MDT
    3

  • 17592
    I've heard business owners say they had to pay five or six percent to the credit card company.  I always responded to stop doing it.  Personally I like cash if in person and certified funds if mailed. 
      October 31, 2020 10:42 PM MDT
    3

  • 34251
    Yes if going the traditional credit card processor route can easily pay 5-6% once they tack all their fees on. This post was edited by my2cents at January 11, 2021 8:25 AM MST
      November 1, 2020 4:00 AM MST
    3

  • 16763
    The reverse is more common in these days of COVID - cash is dirty. Many businesses prefer contactless, tap and go rather than PIN required for small transactions.
    Small businesses sometimes operate on a cash-only basis due to bank fees, but this is becoming rare.
      November 1, 2020 12:13 AM MDT
    4

  • 34251
    Not me...I take cash and am happy to do it. I am small businsss. I swipe/insert the card  myself after checking ID. So card or cash I am still touching it. And cash has no fees. 
      November 1, 2020 4:02 AM MST
    1

  • 16763
    I think you misread me. Small businesses sometimes operate on a cash-only basis because of the fees associated with credit and EFTPOS transactions, but with fewer and fewer customers carrying cash, most are now bowing to the pressure.
    Cash will never go away entirely, second-hand purchases rely on it (nobody expects to find a card reader at a yard sale) as do any businesses which sell to children (school canteens, candy stores etc) as kids aren't permitted credit cards and few even have ATM cards.
      November 1, 2020 5:43 AM MST
    3