Can businesses legally refuse to accept cash in New Zealand?
Does “legal tender” mean you can always pay with notes and coins?
The belief that cash is “legal tender” and can’t be refused by any business is very widespread. However, it’s simply not true in New Zealand. Businesses can choose to accept payment in whatever form they like.
The Reserve Bank of New Zealand (RBNZ) covers this topic in a paper. This is the crucial point:
The seller is under no positive legal duty to accept the payment that is tendered.”
As long as the payment policy is clear, there’s no specific law being broken. We saw a big surge in businesses only accepting card payments during the coronavirus pandemic. And it’s long been the case that airlines that let you book online require you to use a credit card or debit card to make that payment.
It’s true that most businesses will choose to take as many payment options as possible to maximise their potential customer base. But there’s no legal requirement for them to take cash.
In New Zealand, laws regarding currency apply nationwide, no matter where you live. That’s a different scenario from the US, where some cities and states do have laws that make it illegal to refuse to accept cash. On social media, I’ve seen people share US examples and suggest that this also applies in New Zealand or elsewhere. That’s not correct.
New Zealanders have increasingly embraced paying by card. In December 2022, retail spending on cards was $8.1 billion, according to Stats NZ, while 80% of the population made at least 1 electronic transaction using a card, according to RBNZ statistics.
That said, cash is still popular, with 50% of people in the same timeframe also using cash to make payments.