The short answer is:
There is no law against a business refusing to accept bills of large
denominations. I also found no evidence that anyone has litigated over
this, since the law is clear.
You are correct when you said, "This note is legal tender for
all debts, public and private." The law supports that statement, and
says that: "All coins and currencies of the United States, regardless
of when coined or issued, shall be legal-tender for all debts, public
and private, public charges, taxes, duties and dues."
However, there is no federal mandate stating that a private business *
must* accept paper currency or coins as payment. Each business has the
freedom with which to develop their own policies on which forms and
size of currency they accept.One can certainly understand a business,
especially a small one, not wanting to take a loss if a $50 or $100
bill is counterfeit! The law states that US currency is legal to use
for payment, but there is no law stating that the currency must be
From the US Treasury web site
From another site, The Tweezer?s Edge, comes the same question you posed:
"The pertinent portion of law that applies to your question is the
Coinage Act of 1965, specifically Section 102. This is now found in
section 392 of Title 31 of the United States Code. The law says that:
"All coins and currencies of the United States, regardless of when
coined or issued, shall be legal-tender for all debts, public and
private, public charges, taxes, duties 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.
Bottom line: Even though currency is labeled as "legal tender for all
debts, public and private", it is not mandatory that any particular
denomination of currency be accepted as payment of a good or service."
The Tweezer?s Edge links to this site, discussing your question
further:?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
This means that if you pump your gas or get your coffee, and then pay,
the $50 will properly discharge your debt. But if you have to pay up
front, the gas station or the Starbucks can just refuse to take your
money and give you the gas or coffee. They have no obligation to deal
with you -- but once they do deal with you (for instance, because it's
on a products-first, pay-later basis), your offer of the $50 satisfies
your legal obligation to pay.?
Here is someone elses?s ?take? on this topic:
$20 million counterfeit USD found in Colombia , South America
Canada lost $48 million dollars to counterfeiting last year!
Hope this explains the currency issue for you, nosecone1023! If any
part of my answer is unclear, selecting the Answer Clarification
button will allow me to work further on your question, before it is
US currency legal tender
US currency legal tender accept