Louisiana bans CASH for secondhand goods transactions

[Bigmikelakers]

Law Bans Cash for Second Hand Transactions - Acadiana's News Leader

Cold hard cash. It's good everywhere you go, right? You can use it to pay for anything.

But that's not the case here in Louisiana now. It's a law that was passed during this year's busy legislative session.

House bill 195 basically says those who buy and sell second hand goods cannot use cash to make those transactions, and it flew so far under the radar most businesses don't even know about it.

"We're gonna lose a lot of business," says Danny Guidry, who owns the Pioneer Trading Post in Lafayette. He deals in buying and selling unique second hand items.

"We don't want this cash transaction to be taken away from us. It's an everyday transaction," Guidry explains.

Guidry says, "I think everyone in this business once they find out about it. They're will definitely be a lot of uproar."

The law states those who buy or sell second hand goods are prohibited from using cash. State representative Rickey Hardy co-authored the bill.

Hardy says, "they give a check or a cashiers money order, or electronic one of those three mechanisms is used."

Hardy says the bill is targeted at criminals who steal anything from copper to televisions, and sell them for a quick buck. Having a paper trail will make it easier for law enforcement.

"It's a mechanism to be used so the police department has something to go on and have a lead," explains Hardy.

Guidry feels his store shouldn't have to change it's ways of doing business, because he may possibly buy or sell stolen goods. Something he says has happened once in his eight years.

"We are being targeted for something we shouldn't be."

Besides non-profit resellers like Goodwill, and garage sales, the language of the bill encompasses stores like the Pioneer Trading Post and flea markets.

Lawyer Thad Ackel Jr. feels the passage of this bill begins a slippery slope for economic freedom in the state.

"The government is placing a significant restriction on individuals transacting in their own private property," says Ackel.

Pawn shops have been forced to keep records of their clients for years. However under this bill they are still allowed to deal in cash.

---------------------------------------------------------------------------------------------------------------------------

This has to be unconstitutional. Last time I checked, every dollar bill printed by the Federal Govt includes the phrase, "Legal Tender for all debts, public and private." Sounds like something my state of California would come up with not Louisiana

[NE2]

This has to be unconstitutional. Last time I checked, every dollar bill printed by the Federal Govt includes the phrase, "Legal Tender for all debts, public and private."

A typical purchase is not a debt.

But it's an interesting question what happens at a ramp toll when you exit a toll road. You've already driven the road, so you're in debt, so you should be able to pay in cash no matter what.

[Bigmikelakers]

A typical purchase is not a debt.

Debt- An obligation owed by one party (the debtor) to a second party

Some people may interpret it differently but the "obligation" would mean that your obligated to pay the other party to fulfill the debt.

I was always under the impression that when one goes to buy something for a dollar for example, that they owe a debt to the store. Then once you pay the dollar, you fufill the debt thus are able to take the item home with you. Thats my impression. Its late so I'm not using my brain to its potential. I could totally be wrong though.  

[english si]

It's only a debt when you have already used the thing - a toll to enter a road wouldn't be a debt, but one to leave it would be. To buy something off of someone isn't a debt, but an exchange.

As loathed as I am to quote it, wikipedia (on it's page on British banknotes) says:

The concept of "legal tender" is a narrow technical definition that refers to the settlement of debt, and it has little practical meaning in everyday transactions such as buying goods in shops (but does apply, for example, to the settling of a restaurant bill, where the food has been eaten prior to demand for payment and so a debt exists). Essentially, any two parties can agree to any item of value as a medium for exchange when making a purchase (in that sense, all money is ultimately an extended form of barter). If a debt exists that is legally enforceable and the debtor party offers to pay with some item that is not "legal tender," the creditor may refuse such payment and declare that the debtor is in default of payment; if the debtor offers payment in legal tender, the creditor is required to accept it or else the creditor is in breach of contract. Thus, if in England party A owes party B 1,000 pounds sterling and offers to pay in Northern Ireland banknotes, party B may refuse and sue party A for nonpayments; if party A provides Bank of England notes, party B must acknowledge the debt as legally paid even if party B would prefer some other form of payment.

Banknotes do not have to be classed as legal tender to be acceptable for trade; millions of retail transactions are carried out in the UK using cheques, or debit or credit cards, none of which is a payment using legal tender. Equally, traders may choose to accept payment in foreign currency, such as euro or US dollar. Acceptability as a means of payment is essentially a matter for agreement between the parties involved.

Given you guys have a ton of legal heritage from us, you'd have a similar, narrow, definition of legal tender, as being something that someone _must_ accept as payment of a debt.

So if you go into a store, go to the cashier, give them the item you want to take and hand over a dollar, they can refuse to take it as there was no debt - you don't yet own the item, and so owe no money. If you go to a restaurant, eat some food and then pay in cash (providing they are dollars), they have to accept it, but can refuse to take a credit card, a check, some eggs, or something else (but equally can agree to settle said debt in any other way). But if you go to a McDonalds or similar, order and then pay to get the food they have made for you, I believe it's still an exchange, so they can demand credit card payment, or that you wipe down a couple of tables, refusing cash payment (not that they will).

[codyg1985]

This is going to do a lot more harm than good. I can understand why the law was passed, but you still have to catch the thief.

[english si]

Indeed, it seems a silly law done out of good intentions. Which is how most silly laws come about.

[Brandon]

I see a legal challenge to this law, and I see that challenge winning.  You cannot, as a state, ban the use of US currency for any transaction.

[1995hoo]

I think you guys are misunderstanding the meaning of "tender." All it means is that it's legal to "tender," i.e., to OFFER, cash for payment for anything. The seller is not required to ACCEPT it. I recall a furniture store in the DC area named Scan that had a strict "no cash" policy for at least 25 years.

But I've never heard of a state purporting to ban cash for an entire class of transactions, period. That's peculiar.

[english si]

1995hoo: see above "The concept of "legal tender" is a narrow technical definition that refers to the settlement of debt, and it has little practical meaning in everyday transactions such as buying goods in shops"

Legal tender is the only thing a debtor can offer to pay a debt with that the lender is legally obliged to accept..

I don't think anyone is misunderstanding tender, but there's a lot of misunderstanding of 'debt', ie where legal tender applies. Someone who is selling has every right to name their price, and can refuse payment of any type, so is irrelevant when it comes to legal tender.

By your definition, bananas are legal tender, as it's not illegal to offer them as payment for something.

[realjd]

My bank can't refuse cash to pay my mortgage. I owe them money. A restaurant can't refuse cash to settle the bill because at the end of the meal, I owe them money. A store or a fast food restaurant can refuse cash because payment is up front, in exchange for a good or service. There is no debt involved in a transaction like that.

There was a legal challenge about airlines having credit card only policies for inflight purchases. The airlines won.

[Mr_Northside]

Though this doesn't seem to be a customer vs. proprietor battle of what type of payment is accepted.  Both sides want (in some situations) to use cash, but the government is telling them that's not acceptable.

Based on the above posted definitions of debt, what would stop the merchant from saying "I'll give it to you on credit, but you have to pay that debt before you leave the premises with [thing being bought].  It's a debt that lasts no more than a minute, but wouldn't the merchant then be "required" to accept cash?

[nexus73]

There's already plenty of laws on the books that deal with stolen property.  Louisiana, a state that votes GOP in Presidential elections and trends conservative, heads down the Big Intrusive Government road.  Us freedom-loving Constitution-respecting Americans are getting run over from both directions!  Who you gonna call, Ghostbusters?  LOL!

Rick   

[Bigmikelakers]

The whole point of passing this law is a poor attempt to collect more tax revenue without raising taxes. Cash is untraceable. If you use a credit/debit card or a check, then it will be traceable to go after you for taxes. The only way to get around it will be to buy one of those reloadable debit cards and do your purchases with those. But like everyone said so far, the law will probably be overturned.

[realjd]

If they're that concerned about stolen property, why not mandate paperwork and positive ID like at a pawn shop (which incidentally are still allowed cash transactions under the new LA law)? Around here we even have to do that at freaking GameStop because of concerns about stolen property.

[Scott5114]

I believe the last time that I read about legal tender someone said that if you do offer cash as tender in a debt (not an exchange) and are rebuffed, your debt is considered legally null and void, because you attempted to settle it with legal tender. If I recall correctly this came up in a debate about a shop which refused $2 bills as payment for something. I also seem to recall someone saying that if non-acceptance of a form of legal tender ("NO CASH", "NO PENNIES ACCEPTED", etc.) is clearly disclosed ahead of time, then it is allowed for the creditor to reject the specified legal tender, regardless of it is a debt situation or not.

All that said I am sure the law will be successfully challenged because the right to "coin money" (which I believe per precedent extends to regulating money) is solely the domain of Congress as per the Constitution. States have no business getting involved in things like this.

[agentsteel53]

if you do offer cash as tender in a debt (not an exchange) and are rebuffed, your debt is considered legally null and void, because you attempted to settle it with legal tender.

I do not believe it is quite the case.  From what I know, attempting to pay a debt with cash but getting rebuked means that the debtor has shown a good-faith attempt to pay, and in court (when the creditor tries to collect) the creditor cannot claim negligence towards paying the debt.  

it does not make the debt entirely null and void.  it just shows that the debtor has indeed attempted to make good on the payment and the creditor cannot claim otherwise: it is now the creditor who has refused a valid payment and therefore the burden of proof towards the settlement is on him.

to put it in more straightforward terms:

debtor: "your honor, I acknowledge my debt of $500, which I attempted to pay with cash last week"
creditor: "our contract stipulated a bank transfer"
judge: "the debtor has shown good-faith attempt at repayment, and therefore the debt cannot be held as bad.  creditor, either accept the cash or come up with non-punitive terms by which the debtor can repay you, but under no circumstances is he to be considered negligent."

meaning, it is not legal for the creditor to seize collateral, raise interest rates, or do anything which he would be otherwise entitled to do if the debtor had made no attempt towards repayment at all.

[oscar]

Sometimes issues with cash payments come up when payment involves a lot of coins relative to the amount paid.  IIRC, nobody can be required more than 50 pennies at a time.

If there are other limits, one of my college classmates certainly pushed them by paying her tuition in quarters.  Even in the 1970s, tuition payments at that expensive private university could require many thousands of quarters.  The university took it in stride, both being stuck with all those quarters, and the publicity that stunt generated in the campus newspaper (with a photo showing her stacking up and tendering all those quarters).

[Brandon]

I also see this law being widely ignored since it does appear to hit garage sales as well.

[realjd]

I also see this law being widely ignored since it does appear to hit garage sales as well.

Also Craigslist transactions.

[1995hoo]

1995hoo: see above "The concept of "legal tender" is a narrow technical definition that refers to the settlement of debt, and it has little practical meaning in everyday transactions such as buying goods in shops"

Legal tender is the only thing a debtor can offer to pay a debt with that the lender is legally obliged to accept..

I don't think anyone is misunderstanding tender, but there's a lot of misunderstanding of 'debt', ie where legal tender applies. Someone who is selling has every right to name their price, and can refuse payment of any type, so is irrelevant when it comes to legal tender.

By your definition, bananas are legal tender, as it's not illegal to offer them as payment for something.

Seriously???? You're citing a Wikipedia piece about British law and trying to claim its an authoritative source or even relevant????

What you're confusing is the unit of money (the US dollar) and the medium of payment (cash). Businesses in the USA have to accept payment denominated in US dollars (eg, a check drawn on a US bank account, or a money order issued by a US bank denominated in dollars), but there is no requirement that they accept cash.

Some businesses accept foreign money–near the border many places accept Canadian dollars, for example–but they cannot be required to do so.

[realjd]

From the BEP:

What is legal tender?
31 USC 5103. Legal Tender 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. Foreign gold or silver coins are not legal tender for debts.
 
However, there is no Federal statute which mandates that private businesses must accept cash as a form of payment. 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.

http://www.moneyfactory.gov/faqlibrary.html

[english si]

Seriously???? You're citing a Wikipedia piece about British law and trying to claim its an authoritative source or even relevant????

If you actually read my OP, I mention why British law is relevant (I should have pointed out that others were talking about debt, and thus it seems like the definition is identical - other than the currency and other obvious stuff like that - thanks to the British legal history in America) and that I was loathe to quote wikipedia and only did so as it was right on the money (pun intended) at describing debt.

What you're confusing is the unit of money (the US dollar) and the medium of payment (cash).

No, you are with what you say below.

It's not just anything in US dollars, it's cash in US dollars - the method of payment is the more important thing, as the currency is surely implied. Of course, the unit of currency said cash is in matters, but that's the obvious bit - the hard bit is that only cash is legal tender.

As you above, in the post I was responding to, made legal tender basically 'what is legal to offer as a payment', you were vastly wrong in your definition of the term and yet you were saying that we were the ones who had our definitions wrong - so I wanted to highlight the specific meaning of the term and that stuff that isn't legal tender isn't illegal tender.

Businesses in the USA have to accept payment denominated in US dollars (eg, a check drawn on a US bank account, or a money order issued by a US bank denominated in dollars), but there is no requirement that they accept cash.

Businesses in the USA do not have to accept any payment made in US dollars. Nor does the Government. The only thing that, by law, has to be accepted - if, and only if, there is a debt to be paid - is legal tender: which is cash issued by the Federal Government and nothing else. If there's not a debt, legal tender doesn't have to be accepted.

There was a law that needed to be passed to allow paper money issued by the Federal Government to be legal tender (as the Constitution only specifies gold and silver coins there was later a Supreme Court case too) - there hasn't yet been one on checks, money orders, debit cards, credit cards, etc. Given the similarities in law between our two countries, one expects that it's not just any old thing that's denominated in the right currency that counts (see the wikipedia quote I gave above for some English examples) and that federally issued banknotes needed an Act of Congress to be declared legal tender proves that it's an exclusive, rather than inclusive, thing.

[1995hoo]

Quite frankly, english si, you simply don't know what you're talking about when you say businesses must accept cash. Read the post right above yours by realjd. He's quoting directly from a US government website belonging to the Bureau of Engraving and Printing, which prints all US banknotes (it's a part of the Treasury Department). No offense, but I'll take their statement over yours.

[J N Winkler]

Quite frankly, english si, you simply don't know what you're talking about when you say businesses must accept cash.

I don't think that's what he said at all--he only said that cash is legal tender for all debts (as opposed to simple exchanges).  It does not follow, as Jake points out, that businesses must accept cash even for debts.  It only says that, once a business has been offered cash in the full amount of a debt, the debtor has to be reckoned as having made a good-faith effort to pay and cannot have his property confiscated, wages garnished, etc. to satisfy the debt.  Nothing English Si has said actually contradicts what the BEP's FAQ says.

[SP Cook]

In my state there is a health market for copper and other metals, and for coal mining equipment.  (Coal companies generally "sell" broken coal mining equipment to locals the buy it back repaired, which is less expensive for the company than repairing it with their own high-paid union labor).  Since neither have a way to tell what is what, much the transactions are in stolen items.   

A traceable system, such as not allowing cash transactions, would be a good way to stop these people.  Copper and scrap metal thieves are especially bad, destroying important electric distribution systems by taking wire and even load bearing members of transmission towers and even bridges, which then fall down in the wind.  It costs honest people higher electric rates and higher road taxes.