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I ate in a restaurant one day and paid with my Discover credit card. The restaurant reluctantly accepted it but told me that this card incurs a higher fee to them. The next day after my meal, they refused to accept this same credit card. I happened to carry enough cash with me and paid with cash instead.

My question: Do I have the legal right to insist on making the payment with my Discover credit card? If not, what if I only carry one Discover credit card with me? That is, what if this is the only payment method that I can offer?

Just a side note: Discover's website says that "Discover is accepted nationwide by 99% of the places that take credit cards." But practically many places have the ability to charge a Discover card but prefer not accept it. Not a legal issue but a frustrating observation.

Edit I called Discover customer service and here is their response:

Just go to places where Discover Credit Cards are accepted.

Doesn't sound very helpful.

spuck
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Zuriel
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  • In this specific instance, any chance that: (a) they had been thinking about getting rid of Discover but hardly anyone used it; (b) day 1 they accepted it reluctantly and decided to then stop taking Discover at all; (c) day 2 they had a new policy in place "no Discover", not specific to you? – manassehkatz-Moving 2 Codidact Jul 05 '22 at 14:24
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    Also keep in mind that technically every merchant decides which cards to accept. The classic is Visa/Mastercard/Discover/American Express, but many places (especially gas stations) take "everything" and there are others (e.g., Costco) which take only one credit card (but any debit card) - currently I think Visa but previously AmEx. The decision is usually based on fees but sometimes other factors (e.g., Costco pushes a co-branded card) and there is no guarantee that a place that accepts one card will accept another. – manassehkatz-Moving 2 Codidact Jul 05 '22 at 14:26
  • Related: https://law.stackexchange.com/q/22315/11906 – Pyrotechnical Jul 05 '22 at 15:12
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    Does the restaurant have signs that say they accept discover cards? This information will have a big impact on the answer. – Joe W Jul 05 '22 at 16:01
  • @JoeW, no. But apparently, they have the ability to accept it but they prefer not to. – Zuriel Jul 05 '22 at 18:06
  • At the very least it would violate their card processing agreement as I don't know of any of them that allow you to refuse to take a card that you can process. – Joe W Jul 05 '22 at 18:43
  • It's pretty well a scam that a credit card issuer can incentivise customers to accept premium or platinum cards, and then charge the merchant an increased processing fee for the privilege of accepting them. If you use such a card, it's not at all surprising if merchants are reluctant to accept it. – Michael Kay Jul 06 '22 at 16:01
  • @MichaelKay, the card that I use has no annual fee. But it gives more cashback on dining for July, August and September. So it is frustrating that I cannot use it much. – Zuriel Jul 06 '22 at 16:11
  • Do you know what percentage the retailer is paying when you use the card? Almost certainly not, the card companies keep this very secret. But if the retailer is reluctant to take the card, you can be pretty sure it's because they're having to pay a higher rate than they pay on other cards. – Michael Kay Jul 07 '22 at 10:38
  • Why don't some of the answers have sources and yet are highly upvoted? – BCLC Jul 07 '22 at 20:11
  • The restaurant may be in violation of their legally binding contract with Discover if they have a contract with Discover and then refuse to accept Discover cards. – End Anti-Semitic Hate Sep 15 '23 at 13:15

4 Answers4

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You have the legal (contractual) obligation to pay the amount that you owe for your meal. The restaurant can refuse to accept a particular kind of payment, such as check, cash, credit cards (generally or brand-specific), various cash-transfer programs, foreign currency, bitcoin or ridiculous numbers of pennies. There is no requirement that they do today what they did yesterday.

If you have in your possession only a Discover card, and if they are unwilling to accept service barter as payment (washing dishes is classical), then you would have a debt to the restaurant which you must pay in a reasonable time, using an acceptable medium (such as cash, unless they don't accept cash). They cannot make it impossible or highly burdensome for you to discharge your obligation (e.g. they cannot demand Krugerrands or Mongolian ᠲᠥᠭᠦᠷᠢᠭ as the alternative payment, unless you are in Mongolia).

You were given advance notice of this possibility of non-acceptance, yet you willfully proffered a card that you knew that they were not likely to accept a second time. Your hands were not clean, and if this had gone to court, you could not expect mercy from the court on the grounds that you were surprised that they didn't accept your card.

J.G.
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user6726
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    Independent of the reasons, you owe the money for the bill; if they refuse a method that is convenient for everyone, when they could accept it, you still owe the money and have to pay. Eventually. They didn't say they'd refuse the card, they said it was inconvenient. A sign "Discovery not accepted" would be different. – gnasher729 Jul 04 '22 at 15:01
  • Thank you for the detailed answer! It is very helpful. From a practical point of view, when you say "you would have a debt to the restaurant which you must pay in a reasonable time", how does it work? Do I sign an agreement with the restaurant that I owe them some money and then they would allow me to leave? Or do I need to stay there until the payment is settled? – Zuriel Jul 04 '22 at 15:22
  • @Zuriel See my answer below. Normally, you would just agree on some alternate payment method (e.g. a bill). It indeed gets complicated if the host thinks you are trying to bilk. – PMF Jul 04 '22 at 16:24
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    @Zuriel, they can't forcibly detain you. But it would be at the bare minimum polite to leave a tangible acknowledgement of your identity and debt. All the law says is that you owe the money, and they cannot seize you, the rest is about living in a polite society. Note that the police can legally seize you. – user6726 Jul 04 '22 at 16:33
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    Note that the restaurant may have an agreement with Discovery that requires them to accept Discovery. – Kevin McKenzie Jul 04 '22 at 23:46
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    I disagree that he was "given advance notice of this possibility of non-acceptance". The restaurant preferring that he used a different payment method does not translate into a warning that they would refuse it next time. – Ángel Jul 05 '22 at 00:51
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    Cash is legal tender, at least in the US. They can say that they don't accept it until they're blue in the face, but once the debt exists, it's too late for that. – Kevin Jul 05 '22 at 01:51
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    This business about "cash is legal tender" and must be accepted at places regardless of what they say about it is wrong, and has been answered many times on the web, included here at law.stackexchange.com and also here at law.stackexchange.com. – davidbak Jul 05 '22 at 03:14
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    @davidbak The first one presumes proper notice of a no cash policy before eating the food (thus entering the contract/incurring debt), and the second is before the food is even provided, therefore no debt exists. So you're right in certain circumstances, but not universally like your comment implies.. – Logarr Jul 05 '22 at 03:36
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    @KevinMcKenzie, that is a good point! But how would I know the existence of such an agreement as a customer? Assuming such an agreement exists, does it mean that they have to accept my Discover credit card if I insist? – Zuriel Jul 05 '22 at 05:11
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    @Logarr You imply that, without notice, there is a legally enforced assumption that every business will accept cash; if that does exist, it is nothing to do with legal tender. If the situation escalates to the courts, the court-ordered payment would be a debt, and legal tender defines ways of paying that that debt which cannot be refused. But if the restaurant listed a bunch of payment methods they accept, and you assumed you could add cash to that, that would just be a misunderstanding to settle between two private parties. – IMSoP Jul 05 '22 at 13:21
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    The restaurant can refuse to accept a particular kind of payment, such as (...), cash → isn't there a payment in the US a business has to accept no matter what? In France this is cash for instance (the exact amount at least). – WoJ Jul 05 '22 at 13:42
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    @Zuriel depending where you are and some detail that's a bit beyond me, you can file a complaint, either with their card processor or Discover themselves. Multiple such complaints may, depending on the contract, incur contractual penalties or even loss of the terminal. Losing the ability to accept cards means lost business. – jaskij Jul 05 '22 at 13:50
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    @WoJ No business is required to accept cash in store, but they may be required to accept it as payment of a judgement. If you go to cashless restaurants they will probably be set up such that you pay before you get food, so if you insist on cash they just tell you to leave and no debt is incurred. With that said, there are restaurants I've seen where there aren't any front end service staff, you just put in and pay for your order in a kiosk/app and the cooks behind a wall slide it out on a conveyor belt. – IllusiveBrian Jul 05 '22 at 14:28
  • @IllusiveBrian: thanks. I dug up the relevant reference: https://www.federalreserve.gov/faqs/currency_12772.htm – WoJ Jul 05 '22 at 14:58
  • @WoJ I thought about it after I posted that and it is possible there are businesses that are mandated to take cash, I just have never seen it as a general rule in a state for consumer businesses. – IllusiveBrian Jul 05 '22 at 15:11
  • @IllusiveBrian: that's ok, I was looking for the general rule – WoJ Jul 05 '22 at 15:16
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    @Zuriel You would need to contact Discover and ask/file a complaint saying that they refused to accept your card. This is separate from your responsibility to pay for your meal, however. – Kevin McKenzie Jul 05 '22 at 15:33
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    @IllusiveBrian "No business is required to accept cash" This is jurisdiction-dependent. In Massachusetts, for example, G. L. c. 255D s. 10A requires all "retail establishment[s] offering goods and services for sale" to accept legal tender. – A. R. Jul 05 '22 at 20:20
  • It should be noted that "legal tender" must be stated on the currency in question and that U.S. coins generally do not contain the phrase, only bills, and you may be within your right to refuse payment of a $100 debt in entirely pennies. – hszmv Jul 06 '22 at 14:13
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    "ridiculous numbers of pennies" ---> (somewhere in Title 31 of the U.S. Code), "minor" coins (copper and nickel US pennies and nickels) are only historically valid for up to $0.25 - although may places do accept more. To avoid this old rule limitation use ridiculous numbers of dimes. – chux - Reinstate Monica Jul 06 '22 at 21:40
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    @hszmv there is no requirement that the money say "legal tender," and furthermore US coins are legal tender: https://www.law.cornell.edu/uscode/text/31/5103 – phoog Jul 06 '22 at 21:40
  • @chux-ReinstateMonica as dimes are now (since the mid 1960s) composed entirely of copper and nickel, and no longer have any silver or other precious metal, would a dime now be considered to be "minor" coin? The same applies to quarters, half dollars, and susanB & Eisenhower dollars. The Sacajawea dollar and "presidential" dollars have some manganese, but that is currently valued at less than copper, nickel and zinc. – mpag Jul 07 '22 at 13:05
  • @mpag IIRC, the rule came about due to the small cent of bronze 1864 and the shield nickel of 1866 being intrinsically of sub-standard metal value versus the prior cu large cent, cu/ni cents and ag half-dime. I am confident (though can not find chapter and verse) that is does not apply to dimes and larger, regardless of their metal content. – chux - Reinstate Monica Jul 07 '22 at 13:38
  • 'They cannot make it impossible or highly burdensome for you to discharge your obligation' - source please. Actually I notice your entire answer doesn't have any sources. What's up with that? – BCLC Jul 07 '22 at 15:04
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    "They reluctantly accepted it" is not the same as "They warned they wouldn't be accepting in the future". Businesses often have signs up indicating what payment methods they accept. If they have a sign saying "Discover" then it's reasonable to assume they'll accept it, however reluctant they may have been the previous day. – komodosp Aug 03 '22 at 13:38
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The important thing is, as already stated in @user6727's answer that you still owe the money for the meal, even if you cannot pay. Most courts won't call it bilking though if you were willing to pay but unable to in the acceptable payment method (despite having the equivalent amount of equity). For example if the door on the restaurant had a sticker "Visa accepted" but on that day, after the meal, the payment service is out of order for some reason (and you carried no cash) its obvious that you didn't intend to skip the bill.

Now a dispute may arise on the exact alternate payment method, but most hosts will offer you an alternative in this case, such as a bill, or they accept that you leave the restaurant to use a nearby cash dispenser.

BCLC
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PMF
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    Why no sources for your answer? – BCLC Jul 07 '22 at 20:11
  • @BCLC This is just common sense, actually. What other options would there be? The host can't keep you there forever (and it's not going to help getting his money). He could call the police, but they wouldn't do more than identify you and then tell you to somehow pay later. No offense has been committed here. – PMF Jul 08 '22 at 05:29
  • Of course, there's also the "human factor" in here: If you had been visiting this restaurant many times before and/or the host knows you, and/or you ate an ordinary lunch, he'll be more likely to believe you that you'll pay later. If you visited that restaurant for the first time and you ordered five expensive courses with even more expensive wines, that's a different story. – PMF Jul 08 '22 at 05:32
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Your question says only that this happened somewhere in the United States. What form of payment is considered sufficient varies from state to state. (Federal law says that U.S. currency is legal tender for all debts, but not necessarily as payment for all goods and services.) Generally, a seller is not obligated to accept a tendered payment, but tendering a valid form of payment fulfills the obligation to pay. (With the exception that a check doesn’t count if it bounces.) I am not aware of any jurisdiction in the U.S. that obligates all restaurants to take Discover-brand credit cards.

In the state of Oregon, the applicable law would be ORS 72.5110, “Tender of payment by buyer.” This says

Tender of payment is sufficient when made by any means or in any manner current in the ordinary course of business unless the seller demands payment in legal tender and gives any extension of time reasonably necessary to procure it.

In this state, the only form of payment a restaurant is obligated to accept would be cash, and not any particular credit card. In practice, “extension of time reasonably necessary to procure it” means enough time to go to the nearest ATM, withdraw some cash, and come back.

Davislor
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  • @reirab Although I originally said which specific jurisdiction I was talking about, and cited its state law, I’ve edited my answer to clarify that this does not apply everywhere in the United States. – Davislor Jul 06 '22 at 20:57
  • Thanks. Your answer previously seemed to imply that legal tender was required to be accepted in every state and that you were merely supplying one state's law as an example, which was the reason for my original comment. – reirab Jul 06 '22 at 21:12
  • Why is this the only answer with sources while unsourced answers get highly upvoted? – BCLC Jul 07 '22 at 20:12
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    @BCLC The top-voted answers got here before me and already had upvotes when I posted. Not many users go to a question that already has four answers and scroll all the way down to read the one at the bottom. Many of those probably thought one of the top two answers deserved an upvote as well. – Davislor Jul 08 '22 at 01:19
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The only thing any place of business MUST accept is cash, basically (though there are laws in place in many places limiting the amount of cash that can be accepted). Usually an electronic bank transfer is acceptable in place of cash.

Credit cards are NOT cash, and acceptance is not required by law anywhere I'm aware of. Of course a business may have a contract with a credit card provider mandating they accept that specific credit card for any transaction (usually any transaction over a specific value). But that's a business contract between two legal entities and definitely not a legal requirement.

A government putting in place a legal requirement for businesses to accept a specific credit card would greatly overstep its boundaries, and be playing favouritism with that credit card company. Not something you want any government to do.

jwenting
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    "The only thing any place of business MUST accept is cash": there are many businesses that don't accept cash, and this is generally legal, in the US at least. – phoog Jul 07 '22 at 14:35
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    Why no sources for your answer? – BCLC Jul 07 '22 at 20:12