Yes, a hotel, like any other private business, can refuse to accept a cash payment from guests, as no federal law precludes them from doing so. However, there are a few exceptions.
First, the hotel must not be located in a state or city with a law in place forbidding it from refusing a physical cash payment, such as New Jersey or New York City.
Second, assuming the hotel is not in such a jurisdiction, it still must clearly communicate its no-cash policy to guests before the guest’s scheduled stay. Here’s a more in-depth breakdown.
Federal Legal Status
According to federal law, under 31 U.S.C. 5103, businesses or creditors must accept currency/legal tender for debt repayment. However, hotels are under no federal legal obligation to accept cash as payment for a guest’s hotel stay.
Policy Must Be Communicated in Advance
A hotel must notify potential guests that it does not accept cash as a payment method before the guest’s stay. In Texas and a few other jurisdictions, such advanced notice must occur before a guest has the opportunity to accrue a lodging debt to the hotel.
Potential Discrimination Concerns
Hotels must also give guests advanced notice that they do not accept cash to avoid potential discrimination and legal consequences.
Research shows that 23% of households with an income under $25000 only use cash to make purchases. In addition, 14% of Black adults and 11% of Hispanic adults are unbanked. By clearly communicating their payment policies before guests check in, hotels can alleviate concerns that refusing to accept physical cash is a pretext for racial or socio-economic discrimination.
Relevant Legal Precedent
While successful legal action against any private business that refuses to accept cash payments is rare, it isn’t unprecedented. In 2011, Attorney Michael Rosen had sued Continental Airlines for refusing to accept a cash payment for an in-flight purchase (headphones), deeming the airline’s policy a violation of New Jersey’s consumer protection laws. He also argued that a company’s refusal to accept cash could be construed as discriminatory. In the end, the court dismissed his case.
Practical Advice for Hotels
Even though it is legal under federal law for hotels to refuse to accept cash payments from their guests, it’s always best to err on the side of caution by doing the following:
- Clearly state which payment methods the establishment accepts so guests can plan ahead and pay with an alternative method, if possible.
- Accommodate all guests by offering inclusive digital payment options like Ready Credit’s Cash-to-Card® Kiosks for greater accessibility.
Discover how Ready Credit’s cashless hospitality solutions can help your hotel navigate cashless transitions confidently and inclusively while delivering a seamless guest experience.