You’ve probably experienced it before: you walk into a shop, pick up an item that catches your eye, head to the checkout only to find out that they don’t accept debit cards. You have to either pay with cash or leave empty-handed. So why do some shops still refuse to take debit cards in this day and age?

Well it turns out there are several reasons why some shops don’t take debit cards, and they vary depending on the type and size of the business. This can even happen online with your debit card, mainly due to the fees. Here are some of the most common ones:

Costs.

For a business to process debit card transactions they’ll usually incur a fee from the bank or the payment processor. These fees add up and can eat into the profit margin of the shop. Some shops may choose to pass on this fee to the customer by charging a surcharge or imposing a minimum spend, but others may simply opt out of accepting debit cards altogether. This is especially true for small businesses that operate on thin margins or deal with low-value transactions.

Convenience.

Some shops may prefer to deal with cash because it is simply faster, easier, and more reliable than debit cards. Cash transactions don’t require any equipment, internet connection, or electricity, and they don’t have the risk of declined payments, fraud, or chargebacks.

Cash also gives the shop direct control over their cash flow. They don’t have to wait for the bank to process and then deposit the funds into their account.

Customer preference.

Some shops may cater to a specific customer base that prefers to pay with cash or other methods. For example, some cultural or specialty shops may accept only cash. Some customers may also prefer to use cash for privacy reasons or to avoid overspending.

A note on “Legal Tender”

Legal tender is the term that refers to the money that you can legally use to pay a debt or an obligation. In Australia, legal tender is defined by the Reserve Bank Act 1959 and the Currency Act 1965. However, the term legal tender does not mean that businesses have to accept cash for every transaction. Businesses can set their own terms and conditions for how they want to be paid, as long as they inform their customers before the point of sale.

Remember to shop smartly

Of course, not all businesses will refuse debit cards, and some may even prefer them over cash or credit cards. It all depends on their preferences and circumstances. As a customer, you have the right to choose which businesses you want to deal with, and which payment methods you want to use. Just make sure you are aware of the terms and conditions before you agree to buy anything.