What is Legal Tender?
All coin denominations can be used by a customer to make payment, up to a limit of 20 coins per denomination for each transaction. This legal tender limit is to minimise inconvenience to vendors and their waiting customers should a customer wish to tender a large quantity of coins for payment. The vendor is only obliged to accept coin payments up to this limit and may reject coin payments exceeding this limit.
For the avoidance of doubt, the legal tender limit does not prevent a vendor and customer from transacting using quantities of coins above this limit, should they both agree to do so.
Written Notice Provision
If a vendor does not wish to accept as payment any or all of the denominations of currency notes or coins, or wishes to limit the quantity of notes or coins that will be accepted in a transaction, provides that the vendor can do so by a written notice to the customers.
If a vendor has not given a written notice prior to a transaction, and a debt has already been incurred at the point of payment (e.g. a barber has already completed cutting the hair of a customer. As the barber cannot undo this service which has already been performed, the customer would have incurred a “debt”, i.e. cost of the haircut), the customer is entitled to make payment in all currency notes and coins, up to the legal tender limit set out in the CA.
However, if a debt has not already been incurred at the point of payment (e.g. a newspaper vendor passes a copy of a newspaper to a customer to sell it to him, but in the event the customer does not agree to the vendor’s terms of payment, the vendor is still able to resell the same newspaper to another customer. Hence, a debt would not have been incurred by the customer), the vendor may refuse to sell the said goods/services to the customer if the customer is not willing to accept the vendor’s terms of payment.
Guidelines on Provision of Written Notice By Vendors
- The written notice should minimally be in the English language. Vendors are encouraged to have the written notice in the four official languages, i.e. English, Chinese, Malay and Tamil.
- The words on the written notice should be legible, and preferably in print.
- The written notice should reference the CA and must clearly state the currency denominations of notes and/or coins that are not accepted as payment. Should the vendor wish to place limits on the acceptance of certain denomination of notes and/or coins as payment, the written notice should specify the denomination of the note and/or coin and the quantity that will not be accepted.
- The written notice should be provided to the customer prior to the transaction, either by handing out the written notice to the customer or displaying the written notice at the vendor’s premises.
- Where the written notice is displayed at the vendor’s premises, the written notice should :-
(a) be posted at various conspicuous locations within the premises, e.g. near the entrance of the store or at all cashier counters;
(b) not be covered in whole or in part by any object or concealed in any manner; and
(c) have a minimum font size of 20 if printed.