TUPELO • State Sen. Chad McMahan, a Republican lawmaker from Guntown, earlier this month wrote in a Facebook post that Mississippi businesses were in violation of the law if they would not accept cash from customers as a form of payment.
“Business owners, if you refused to take cash, the debt is paid in full,” McMahan wrote on July 8. “If you are a business owner and you refuse to take cash, you are breaking the law. Here is an example, if I stop by your store and I purchase $44 worth of fuel, and I try to pay you with a $100 bill and you refuse payment of cash, the debt is paid in full. There is nothing you can do to prosecute me because you have refused payment of Legal Tender, unless the business suspects counterfeit bills.”
McMahan’s post has now been shared over 380,000 times and has drawn over 25,000 comments. However, an independent fact checker has concluded the post is false and federal and state agencies have also rebuffed his statement.
The U.S. Department of Treasury seems to contradict McMahan’s Facebook post by saying on its website that there is “no Federal statute mandating that a private business, a person or an organization must accept currency or coins as 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,” the post on the website reads.
TJ Werre, a spokesperson for the Mississippi Attorney General’s Office, told the Daily Journal in a statement that he was aware of “no federal or state law mandating a Mississippi business accept cash.”
Furthermore, the independent, nonpartisan fact-checking website Snopes issued its own ruling saying that McMahan’s Facebook post was “false.” The website stated that “legal tender does not mean that all merchants must accept that form of payment for all transactions.”
“In short, when a debt has been incurred by one party to another, and the parties have agreed that cash is to be the medium of exchange, then legal tender must be accepted if it is proffered in satisfaction of that debt,” the article states. “However, otherwise the selling party may set the medium of exchange to be anything they choose.”
McMahan, who is not an attorney, told the Journal that he did not consult with the U.S. Department of Treasury or the Mississippi Attorney General’s Office before making the post, but he did consult with “legal counsel” before making the post, and he believes his interpretation of the federal law is on “good legal footing.”
“It’s an attack on our monetary system,” McMahan said of businesses that choose not to accept cash. “People have to have confidence that the money in their pocket is real money and that it can be exchanged for goods and services.”
McMahan, a second-term Republican legislator, said he posted the statement on Facebook after several of his constituents contacted him about local businesses that were choosing to either limit cash transactions or not accept cash payments.
He said that based on his interpretation of federal law defining what legal tender is, it is "implied law" that business must accept cash as a form of payment.
"If businesses are telling people that their money is not real money … you’re undermining our entire monetary system," McMahan said.
In his initial post, McMahan also encouraged Mississippians to contact him if businesses were not accepting cash and that the businesses who had such a policy would hear from him, the state attorney general’s office and the Mississippi Department of Revenue about the policy.
However, both the Mississippi Attorney General’s Office and the Mississippi Department of Revenue told the Daily Journal they were not making any calls to businesses over the issue of cash or legal tender.
Meg Bartlett, an associate commissioner with the Mississippi Department of Revenue, told the Journal that the department has “no jurisdiction” over business who won’t accept cash and that the agency has “nothing to do with that.”
Michelle Williams, the chief of staff for the Mississippi Attorney General’s Office, also told the Journal that the Attorney General’s Office had received no complaints from anyone regarding businesses not accepting cash.
“We’re not doing anything on this because we haven’t received any complaints,” Williams said.
McMahan acknowledged to the Journal that he “probably should have worded that a little differently” in the post but he did speak with the department of revenue and he has received “thousands” of complaints about businesses not accepting cash.
He also said he planned to introduce a bill in the Legislature that would require businesses in the state to accept cash as a form of payment unless they believe the cash is counterfeit, the business is an online-only operation or if a customer and a seller have a previous contract agreeing to a different medium of payment than cash.
He is currently the vice chairman of the Senate Businesses and Financial Institution Committee, and he would likely have to introduce the bill the next legislative session because of current bill deadlines adopted by the Legislature.