Laws and US Banks

Here are a couple of things I always assumed to be true. Are they?

1. If I have a torn dollar bill, as long as I have more than half of the bill, the bank MUST replace it for me. Once again, I have more than 1/2 of the remaining bill.

2. If I bring in obsolete legal tender into a bank, they MUST honor that money. Examples are Eisenhauer dollars, Franklin halves, etc. I know that in most cases, they would be CRAZY not to do it, but I'm talking about the law - are they REQUIRED to do it.

So the question is: Are there such laws or are these just "common sense" or "common practice" things that have been handed down through the years?.

Thanks

 

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I know for a fact if you send 51% of a bill to the bureau of engraving and printing, federal reserve or whoever handles that, and get your money for it. I don't know if you could get it from a bank though.

I assume the coin thing would have to be true. I don't think they can refuse U.S. currency, unless it's from the C.S.A. or colonial coins. I may be wrong, but I think they would get in trouble for refusing U.S. currency, new or old.

 

Yes, they cannot turn down any US currency as long as its legal tender - which all of it, with a few exceptions is.

the exceptions being the currency that is illegal - i.e. the 74 aluminum cent, 100,000 dollar bill, etc.

 

1. thats the bep, a bank might do it for you, but I wouldn't count on it 2. Besides the trade dollar no legal u.s. currency has ever been demonitized so you can spend it, banks, stores, they have to take it. Odds are though you'll get the teller thats too stupid to realize we haven't been using washington quarters or the such time immemorial.

 

On second thought, I don't think a bank would replace the torn dollar for you, since most probably don't have the right gizmo to accurately measure it to make sure it's at least 51% intact. I've never actually tried it, so I can't say for sure, but I really don't think my particular bank would have that.

 

Followup

This is a followup on the "Do you have to accept a $100 bill from a customer".

I'm guessing there will be replies saying that "no, you do not have to accept the $100 bill".

Well, what happens when they stop taking the $20? I dunno. Because if they can refuse a $100, they can refuse a $20. I know there are counterfeit problems with the $100, but there are also a lot of counterfeit $20s.

Where does it stop. No one is really bothered by the signs: "We don't accept $100 bills" because it doesn't apply to most of us. What if they suddenly said "We don't accept $20 bills".

Funny thing. Our dryer is on the fritz (that is NOT funny). but I had to go to the local laundromat. Well, I had been searching through dime rolls for the past several weeks and brought a ton o' dimes to pay for the drying expenses.

Well, I get there and the d***ed machines only take quarters. LUCKILY, there was an attendant and she was able to convert my "useless" dimes into quarters. *WHEW*

I know that is a silly example, but it is a case in point.

IS THERE A LAW?

 

The problem with $100's isn't counterfeiting, it's making change. Thats why small stores and such refuse them, because it drains their reserve of smaller denominations when they have to make change. Walmart's not going to refuse them because they have plenty of registers with lots of change, but your local mom&pop grocer will, because running out of small bills means running to the bank to get more and probably losing customers and business in the process.
Guy~

 

Per the US Department of the Treasury:

Question I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?

Answer The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

 

I think that it is a law to accept all currency IF you owe them a debt. This a very controversial debate though. If they don't accept the $100 and i already filled up, I'd probably walk out and drive away with my free gas. Another example, if your at a bar and get a drink and the guy says thats $2 and you hand him a two dollar bill and he says we don't accept these. If I take a drink of it, I can't imagine he is going to take it back and give it to someone else. RIGHT?

Another side note, on another forum i belong to, the web master said that it is against most credit card companies rules to put a sign up that says minimum charge on a credit card is $5. He said that the CC company can sue that store for having that sign, but it would be too much of a hassle to do so. The stores just do that to cover the charge that the CC company charges them to complete the transaction. Does this make sense, i think i was rambling a little.

 

But what if all you had is cash? I'm only 17 and don't have a bank card, credit card, or even checks. How can they refuse cash if that's ALL I have?

 

You are not REQUIRED to do business at any store nor is any store REQUIRED to do business with you. having said that, it would be stupid for most stores NOT to accept cash.

 

It's also cheaper for a business to accept cash. Credit/debit card companies charge a fee (usually a percentage of the sale) for the use of card. So if you pay for $10 worth of gas with cash, the store owner gets the whole $10, while if you pay with a card and the fee is 5%, the store owner gets $9.50. Which is why my local mom-and-pop gas station (I live in a town of less than 800) has a minimum on card usage of $10, and charges a 50 cents fee on all card charges.

 

While cash is cheaper, I'm sure most gas stations would prefer to go all credit. Can rob cash from a gas station if they don't have any?

 

On a lighter note, Walmart self checkouts accept all current issues of paper currency including $100 bills and (get ready for this) $2 bills. I haven't tried half dollars on the self checkout yet.

 

Having worked on the retail end for a long time I can tell you that a bank does NOT have to accept half a dollar bill (note).
Reason is simple, serial numbers are on both "halves" of the note and match (unless you have one hell of an error).
If they had to take it people could tear notes in half all day and double their money.

I have had people try this with me in the past.

As for coin, yes I do believe they have to take it. However, they can charge a premium as many banks do these days. Shipping costs come into play.

My bank does not charge but if I want to cash in a bunch of change I call ahead so they are ready. They really appreciate that.

 

Larger denomination notes for transactions

Businesses can and do refuse $100 bills all of the time. It's their decision and a lot depends on where you live.

If you're in a town of 600 people it might not make sense. If you are in an urban area where crime is much higher it ONLY makes sense (although not as much now with the higher gas prices). The reasoning behind this is to keep the till as low as possible. Less money in the till, less chance of robbery and hence less chance of someone that is getting paid minimum wage getting their head blown off for a hundred bucks. Believe me, IT DOES HAPPEN.

As for the, "well all I have is $100 so I'll get my gas for free angle" think again. NO BUSINESS is going to give product away. I always took that $100 even though it was posted as not acceptable. NOW it's in my possession.
This means you WAIT until I have enough change to complete the transaction.
Had a guy pull that on me once for $5 worth of gas. He got his change. 95 singles and I counted them twice. It was near closing time and that was all I had in my till. Made checkout a lot easier with the 100 though!

Bottom line is this. People can complain about what a retailer should take all day but retailers have to consider employee safety. Many retailers do not want more than $100 TOTAL in the drawer at any given time.

Bonnie and Clyde could roll in for some gas at any time. People get murdered for a hundred bucks.