The first thing out the way before you consider whether you can accept coins at your place of business is to figure out whether you have a choice in the matter. Mini detour, Can you not accept coins at your place of business?
When you even consider not accepting coins, the first retort you encounter is the “Legal Tender” argument. This being that the American Dollar and Cent are the country’s legal tender and MUST be accepted anywhere it is tended. But is this true, or is it always true? Let’s consider the definition of legal tender. According to Investopedia: Legal tender is anything recognized by law as a means to settle a public or private debt or meet a financial obligation, including tax payments, contracts, and legal fines or damages.
The keywords here are “debt” and “financial obligation.” In every situation where a debt is owed, or there is some financial obligation, that debt and obligation can be settled using the country’s legal tender. An example of such a case would be when rent is owed, the tenant is indebted to the landlord and is financially obligated to pay rent, and if the landlord refuses to accept cash (the legal tender of the country where his apartment for rent is located), the tenant can be excused from paying rent that month.
So, are you in the landlord’s shoes as a business owner? Not quite. As long as you run a private practice, there’s no obligation on what type of legal tender you may or may not collect. As long as you accept banknotes, all is fine in the eyes of the law. You can notify that you no longer collect coins at your enterprise, and you will not be the first to do so.
A local credit union in Maine has put out a notice that it would stop accepting coins from September 1, 2023. It explained that this development is part of the company’s initiative to focus more on processing digital transactions. No one can fault the enterprise or your company for considering the elimination of coins as a payment method. Research shows that using coins as a means of payment slows down any queue by an average of 2.5 seconds per person. It might not be a lot viewed singly, but the time quickly racks up when you consider places like malls with a lot of foot traffic and how it can make many people into unsatisfied customers.
If you are thinking about turning to the banks, I’d have to regrettably inform you that they are in the same bind as you. Most of them, being private entities, are not obligated to take loose change from you and give you cash. So before you see the bank as a solution, you need to ask yourself these questions:
- Do banks accept coins? The answer is yes, they do. But they are not obligated to, especially if you do not count or sort the coins properly.
- Do banks accept rolled coins? It is still up to the bank to accept or reject it. But they are more likely to with a roll of coins.
If you are going to take your chances with the bank, you should know how to roll coins and how much is a roll of pennies. Having this information handy and being a customer of the bank sure makes it easier for your business to transact with the bank.
Suppose that’s not enough to convince you; a few moral arguments could sway you as a business owner. Being party to rejecting coins at your place of business could be one of the dominos that topple, affecting several people in the society. If other businesses take a similar stance, it desensitizes people against using coins. It can give several governments the impetus to abolish the use of coins altogether, with several countries already doing so. Some examples include Australia stopping the production of new one and two-cent coins in the '90s and Canada and the Bahamas stopping production of the one-cent coin in 2012 and 2020, respectively.
One place the effect would be immediately felt is charity, with a sizable chunk of donations being made in pennies. It does not get any more apparent than the YouGov study in 2018 that shows over 300 million pounds donated to charity in loose change. This, coupled with the number of homeless people relying on change dropped in their tins and jars all over the country to survive daily. It hits much closer to home when you realize that removing coins from circulation means every payment and bill would be rounded up to the next dollar. It might not seem much, but in these economic times, every cent counts.
While it might look like only problems at first glance and that all the reasons not to continue accepting coins are sentimental and tug at heartstrings, there is a silver lining. All other businesses would see the same problems as you do and would consider rejecting coins, but you can stand out from the crowd and show that you are a business for the people, and how you can do this without affecting your bottom line is in two ways.
The first would require investing in a quality coin counter and sorter. It can serve as a new income source because you can charge people to use it. The service charge can also reflect how much it would cost to hire and train your staff to handle coins differently from cash. The result is a win for your business and your customers.
So, should you accept coins? The ball is in your court. It might be more hassle than you bargained for, but it gives you a golden opportunity to position your business in the hearts of your customers.
Key Takeaway: The decision to accept or reject coins in a business involves legal, operational, and ethical dimensions. While phasing out coins can streamline operations, it may have broader societal impacts. Businesses need to weigh these factors carefully to align their policies with their values and strategic goals.