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Under What Circumstances Can Retailers Reject A Legal Tender In Singapore?

Retailers can reject a legal tender in Singapore – under certain circumstances.

Electronic payment methods, such as PayNow, have been heavily promoted as the go-to payment for businesses. This is especially when the Monetary Authority of Singapore (MAS) is promoting the greater adoption of e-payment among individual and business to support safe distancing.

However, cash still trumps for many retailers, especially for mom-and-pop shops and neighbourhood kiosks. Under the Currency Act, currency notes and coins issued by the MAS are legal tender in Singapore, and hence they are recognised to be valid means of payment.

But can shops pick and choose which cash they accept? What if you have legal tender, but the shop does not accept it? We find out under what circumstances can retailers reject a legal tender in Singapore.

Read Also: Beginners’ Guide To Cashless Payment Platforms In Singapore

#1 If Payment Is Made Using More Than 20 Coins Per Denomination

All coin denominations can be used by a customer to make payment, but this is capped to a limit of 20 coins per denomination for each transaction.

This means a total of 100 coins across all five coin denominations – 5 cent, 10 cent, 20 cent, 50 cent and $1 – can be used in a single transaction, and the vendor is only obliged to accept coin payments up to this limit. Any coins beyond this limit can be rejected by the retailers.

Previously, the usage of coins were capped at the following limits:

  • 5 cent, 10 cent and 20 cent coins are pegged to a limit of $2 each;
  • 50 cent coins are pegged at a limit of $10;
  • No limit for $1 coins.

The limit on the use of coins in each transaction is introduced to minimise inconvenience to retailers and customers who are waiting, should a customer wish to use a large quantity of coins for payment. However, following a revision in 2019, the legal tender limits for coins have been simplified.

That said, the limit does not prevent a vendor and the customer from transacting using quantities of coins above the said limit, should both agree to do so.

Read Also: What’s Needed For Singapore To Go Cashless (And Why Razer Probably Isn’t The One To Do It)

#2 If Vendor Has Provided Written Notice To Customers

According to the Currency Act, if a vendor does not wish to accept any or all of the denominations of currency notes or coins, or would like to limit the quantity of notes or coins that can be used in a transaction, they can do so by providing a written notice to their customers.

This means that as long a vendor has provided a notice that they do not wish to accept $1,000 notes for payment of goods and services, they may refuse to transact with the customer, should the customer is  unwilling to accept the vendor’s terms of payment.

This requirement is aimed at striking a balance between offering convenience to customers when using cash, and allowing retailers to accept other forms of payment aside to cash. An example is LiHo, where only electronic payments via NETS or EZ-Link are accepted at selected locations.

That said, the onus is on the vendor to ensure that customers are well-aware of the written notice. To help retailers, MAS has set out some guidelines on the provision of such written notice, such as the minimal use of English on the notice, with the words legible and preferably in print.

In the event the vendor has not provide a written notice, and has rendered a service, say a haircut, to a customer and the debt has incurred at the point of payment (as the haircut cannot be undone), the customer is entitled to make payment in any currency notes and coins, up to the legal tender limit set out in the currency act.

Read Also: Payment Services Act: 4 Ways The New Regulations Will Mitigate Risks For Digital Financial Service and E-Wallet Users In Singapore

#3 If The Notes Or Coins Are Damaged Or Mutilated

Under the Currency Act, mutilated notes and damaged coins command no value. As such, retailers may reject mutilated notes for payment.

Notes can be defined as mutilated if they are:

  • Scorched or burnt
  • Attacked by pests and insects
  • Stained by ink, paint or other chemicals
  • Defaced by markings or writings of words, figures and others
  • Perforated or portions missing

Coins can be deemed as damaged if they are:

  • Scorched or burnt
  • Stained by ink, paint or other chemicals
  • Defaced by stamping or engraving
  • Holed, chipped, cut or dislodged, in the case of bi-metallic $1 coins

MAS may, out of goodwill and at its discretion, award value to mutilated notes. This is provided that there are no evidence to suggest that the notes have been deliberately mutilated. Mutilated notes can be deposited at any commercial bank in Singapore where you have a bank account with.

Read Also: Watch: Is It Possible To Live Cashlessly In Singapore?

#4 Use Of Foreign Currencies (And The Special Case of Brunei Currency)

Another thing to note is that retailers, at their discretion, can reject the use foreign currency in a transaction. However, they are encouraged to accept Brunei notes and coins, which the value on par with the Singapore Dollar.

This is because under the Currency Interchangeability Agreement (CIA) that was signed between Brunei and Singapore in June 1967, the MAS is required to accept from banks in Singapore Bruneian currency notes and coins, and to exchange them at par and without charge into Singapore notes and coins.

In keeping with the spirit of the CIA, MAS has been working with the Singapore Tourism Board, as well as relevant trade and business associations to educate businesses on the acceptance of Bruneian currency in Singapore.

Read Also: Going Cashless: Who’s Left Behind?