Can a store refuse cash? The UK government’s answer

The decision means shops, restaurants and other private businesses can continue deciding whether to accept notes and coins, despite calls from MPs for stronger legal protections for cash users.

Instead of requiring businesses to take cash, ministers say their priority is ensuring people can still access it through ATMs, banking hubs and cash deposit services.

They argue there is not enough evidence to justify changing the law and believe retailers should remain free to make payment decisions that best suit their operations.

Why retailers can still refuse cash

For retailers, the legal position remains unchanged. Businesses can decide which payment methods they accept, provided customers are made aware of their payment policy before a transaction takes place.

The government said it has “no plans to regulate businesses, big or small, to compel them to accept cash”. This allows retailers to choose payment methods based on factors such as security, insurance requirements, operating costs and efficiency

Equally, the freedom to decide which payment methods to accept means retailers may refuse card payments in favour of cash, or adopt any other combination of payment options that suits their business or customers or both.

The issue often causes confusion because cash is legal tender. However, legal tender has a much narrower legal meaning than many people realise. It mainly relates to settling debts and does not require retailers to accept cash for everyday purchases.

In other words, UK law does not oblige private businesses to take notes and coins as payment for goods or services.

Payment strategies have changed rapidly in recent years as contactless cards, digital wallets and mobile payments have become commonplace. Some retailers have moved to card-only operations to reduce cash-handling costs, improve security and speed up transactions.

Others continue accepting cash to meet customer demand and make shopping accessible to the widest possible range of customers.

Parliament warns of growing exclusion

The government’s decision comes despite concerns raised by the Treasury Committee, which believes declining cash acceptance could leave some consumers unable to pay for everyday goods and services.

In its report, the committee warned the UK could drift towards a “two-tier society” if more businesses stop accepting cash. It said people who rely on cash—including some older people, people with disabilities, victims of domestic abuse and others who may struggle to use digital payments—could increasingly find themselves excluded from parts of the high street.

The committee also found there is limited official data on how widely cash is accepted across the economy. It called for better monitoring so policymakers can identify any growing problems before deciding whether new legislation is needed.

The government agreed that more evidence would be useful. It confirmed that the Bank of England will continue monitoring cash acceptance through consumer research, but it stopped short of supporting mandatory cash acceptance for retailers.

Focus remains on access to cash

Rather than regulating retailers, the government’s policy is focused on making sure consumers and businesses can continue accessing cash when they need it.

Under the Financial Services and Markets Act 2023, the Financial Conduct Authority is responsible for helping ensure reasonable access to cash withdrawal and deposit services across the UK.

This includes overseeing ATM networks and supporting the rollout of banking hubs in communities where traditional bank branches have closed.

For retailers, the decision provides continued flexibility. Businesses remain free to operate as cashless, continue accepting cash or offer both payment options, depending on what best suits their customers and commercial needs.

The debate, however, is far from over. Although cash use has declined over the past decade, millions of cash payments are still made every day across the UK. Parliament has made clear it will continue examining whether voluntary cash acceptance is enough to protect consumers as payment habits evolve.

For now, retailers remain free to set their own payment policies. But with policymakers continuing to monitor cash acceptance and financial inclusion, the issue is likely to remain high on the retail policy agenda.

“Can a store refuse cash? The UK government’s answer” was originally created and published by Retail Insight Network, a GlobalData owned brand.