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Cafe's cash ban causes a stir

Adam Zuchetti
Adam Zuchetti
10 August 2017 1 minute readShare

A Melbourne cafe owner has banned the use of cash on his premises, which has raised questions about what constitutes legal tender and whether cash can legally be avoided in business.

The shift away from cash seems only natural, given the convenience of card payments. In 2016, the Reserve Bank of Australia (RBA) tracked the spending habits of 1,500 participants for a full week, and concluded that card payments accounted for 52 per cent of all transactions made, while cash made up just 37 per cent.

However, chef Matt Wilkinson, who owns and operates Melbourne Pope Joan, has taken matters further, publicly declaring that his cafe will effectively ban cash in response to a series of burglaries.

“I just don’t want to keep getting broken into,” Matt recently told The Sydney Morning Herald.

“Any regulars can set up an account if theyve got a problem … There will be a glass jar and youve got to have correct change and if you dont, nearest to it, because there will be no change.”

Consumers and business owners alike have raised the question of whether completely removing cash is even legal, since it forms legal tender in Australia.

Somewhat surprisingly, however, the RBA states that “refusal to accept payment in legal tender banknotes and coins is not unlawful.”

To avoid disputes on the matter, businesses that ban or frown upon the use of cash are urged to make this known prior to that transaction taking place.

Refusal to accept cash as a means of settling outstanding debts is also likely to cause problems in any legal proceedings against debtors.

Businesses that do accept cash, though, are legally entitled to refuse payment using an excessive amount of coins.

According to the RBA, coins are only considered legal tender where they do not exceed:

  • 10 times the face value of gold coins
  • $5 where combinations of silver coins are used
  • 20 centres where 1 and 2-cent coins are used

The latter is most significant, as despite being withdrawn from circulation, these coins still form legal tender.

Cafe's cash ban causes a stir
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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