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What are the rules on paying with cash?
One in seven Which? members have struggled to pay with cash at a business or
retailer
During the pandemic it wasn’t an unusual sight to see coffee shops and restaurants displaying ‘card only’ signs, but it seems that cash is still being shunned.
Our survey of 1,124 Which? members in April found that one in seven people had struggled to pay with cash at a business or retailer in the past 12 months. Half of those who responded also said that they’ve noticed a rise in the number of businesses and retailers not accepting cash since 2020.
Here, Which? explains if businesses are required to accept cash by law, and what’s being done to protect cash acceptance and access in the UK.
Do businesses have to accept cash?
Ultimately it's down to the business what specific payment methods they accept – and there's no legal obligation to accept cash.
But not everyone is aware of this. In fact, only three in 10 of those we surveyed correctly answered that there was no legal obligation when we asked them. Three in 10 said that they didn’t know and another three in 10 said that businesses legally have to accept cash.
Some confusion can stem from the fact that cash is often described as ‘legal tender’, however this doesn’t mean it’s your legal right to use it in a shop.
In fact, the Bank of England says that legal tender has a ‘narrow technical meaning’, which has no use in everyday life. It means that if you offer to fully pay off a debt to someone in legal tender, they can’t sue you for failing to repay.
However, with millions of people still reliant on or prefer to use cash, it makes sense for businesses to make every effort to accept it.
Do people still use cash?
While eight in 10 of our survey respondents told us that contactless cards were their preferred method of payment, millions across the UK, especially those who are in vulnerable groups, still rely on cash.
According to the latest figures from the Post Office, business and personal cash deposits totalled £2.48bn in May – a 10% month-on-month increase.
Personal cash withdrawals totalled £817m last month.
- Find out more: is your local bank branch closing?
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Listen nowWhat's being done to protect cash?
Which? has been campaigning to protect cash for the millions that rely on it for more than five years.
Here are some of the cash solutions that have been announced or put in place since our campaign began:
Which? Cash Friendly Pledge
Protecting access to cash is only useful if there remains somewhere to spend it.
This is why we launched our Which? Cash Friendly Pledge in 2020. It encouraged businesses to sign up to promise that they would accept cash as a payment method for consumers who want to keep using it.
Some of the major participating retailers included Aldi, Asda, Co-op, LloydsPharmacy, John Lewis and Waitrose.
- Find out more: Which? Cash Friendly Pledge
Cash legislation
The forthcoming Financial Services and Markets Bill will ensure that people can continue to conveniently withdraw and deposit cash – and a new amendment, called for by Which?, will ensure that people can do so for free.
This will be monitored and enforced by the Financial Conduct Authority (FCA). With its new powers, the FCA could stop banks and building societies from closing cash access services if there was no suitable alternative within a reasonable distance.
- Find out more: Which? wins campaign to protect free access to cash
Reviews by Link to commission new cash services
Last December, the Cash Action Group (CAG) announced that any community facing the closure of a core cash service, such as a bank branch or cash machine, will trigger an independent review by Link.
Link will determine whether a new solution should be provided and will have the power to commission services, such as a shared banking hub or better Post Office services, to meet the cash needs of the community as a whole – not just the customers of one bank or building society.
