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

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 rolling out the higher 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 therefore they're recognised to become valid means of payment.

But can shops select which cash they accept? What if you've legal tender, however the shop doesn't accept it? We discover out under what circumstances can retailers reject a legal tender in Singapore.

#1 If Payment Is Made Exceeding 20 Coins Per Denomination

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

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

Previously, the usage of coins were limited to 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 around the utilization of coins in every transaction is brought to minimise inconvenience to retailers and customers who are waiting, should a person require to use a large quantity of coins for payment. However, following a revision in 2021, the legal tender limits for coins have been simplified.

That said, the limit does not prevent a vendor and also the customer from transacting using amount of coins over the said limit, should both accept achieve this.

#2 If Vendor Provides Written Notice To Customers

According towards the Currency Act, if your vendor doesn't 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 you can use in a transaction, they can do so by giving an itemized notice to their customers.

This means that so long a vendor has provided a observe that they do not wish to accept $1,000 notes for payment of products and services, they might won't transact using the customer, should the customer is unwilling to accept the vendor's terms of payment.

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

That said, the onus is around the vendor to make sure that customers are well-aware from the written notice. To assist retailers, MAS has set out some guidelines around the provision of such written notice, like the minimal utilization of English around the notice, with the words legible and preferably in publications.

In the big event the vendor hasn't provide a written notice, and it has rendered something, say a haircut, to a customer and the debt has incurred in the reason for payment (because the haircut can't be undone), the customer is entitled to make payment in any currency notes and coins, as much as the legal tender limit put down within the currency act.

#3 If The Notes Or Coins Are Damaged Or Mutilated

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

Notes can be defined as mutilated if they're:

• 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 could be deemed as damaged if they're:

• Scorched or burnt
• Stained by ink, paint or other chemicals
• Defaced by stamping or engraving
• Holed, chipped, cut or dislodged, when it comes to bi-metallic $1 coins

MAS may, from goodwill and also at its discretion, award value to mutilated notes. This is so long as there are no evidence to point out the notes happen to be deliberately mutilated. Mutilated notes could be deposited at any commercial bank in Singapore in which you possess a banking account with.

#4 Utilization of Foreign Currencies (And also the Special Case of Brunei Currency)

Another aspect to note is the fact that retailers, at their discretion, can reject the utilization forex in a transaction. However, they are encouraged to accept Brunei notes and coins, that 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 needed 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 preserving the spirit from the CIA, MAS has worked using the Singapore Tourism Board, in addition to relevant trade and business associations to educate businesses on the acceptance of Bruneian currency in Singapore.