What is legal tender?
Banknotes and coins issued by the Reserve Bank of New Zealand are legal tender.
What does legal tender mean?
Legal tender is often confused with the concept of payment (exchanging goods and services for money).
Generally, you can use cash (banknotes and coins) to pay for goods and services, but businesses are not always required to accept cash as payment.
Can I still pay with cash?
Yes, you can use cash to pay unless the business clearly informs you in advance they don’t accept cash before you start shopping, or receive services from them.
They can tell you in person before you pay, or by displaying a sign on the premises.
There are also rules around how much you can pay using coins.
For example, if someone wants to pay a merchant with 10 or 20 cent coins, they can only pay up to $5 worth of 10 or 20 cent coins.
If someone wants to pay a merchant with 50 cent coins, they can only pay up to $10 worth of 50 cent coins.
If someone wants to pay a merchant with $1 or $2 coins, they can only pay up to $100 worth of $1 and $2 coins.
Can I use cash to repay a debt?
Yes. If you want to use cash to pay off debt, businesses are obliged to accept it.
Other payment methods
Today, money is not just banknotes or coins. Money takes many different forms, including credit cards, debit cards, bank transfers or payment instalment options, like Afterpay.
These other forms are called private money. Shops are allowed to accept any payment they like in exchange for their goods.
- This Solutions Column has been compiled by Vani and is a regular Times editorial from Pakuranga Citizens Advice Bureau. Email enquiries.pakuranga@cab.org.nz or visit us at the Pakuranga Library building, phone 576 8331, and at Botany Citizens Advice Bureau, rear food court entrance, Botany Town Centre, phone 271 5382 or 0800 367 222 for free, confidential and informative help.
