Apple refusing to accept cash for iPhone, limits 'em to two per person

Coincidence or not, Apple has stiffened up the requirements to pick up a new iPhone shortly after announcing that 250,000 or so of the 1.4 million it sold in Q4 went to unlockers. In an admittedly intriguing move, Apple has decided that it will "no longer accept cash for iPhone purchases," and moreover, each individual will only be allowed to buy two (on plastic, of course) in an effort to "stop people from reselling them." More specifically, spokeswoman Natalie Kerris stated that the company is "requiring a credit or debit card for payment to discourage unauthorized resellers," so don't even bother bringing the greenbacks if you're lookin' to grab an iPhone from Apple.

[Image courtesy of PCWorld]

[Bruno @ Oct 27th 2007 12:21AM]

Is it legal in the US to refuse cash as payment?

[Paul @ Oct 27th 2007 12:27AM]

I'm pretty sure it's illegal for them not to accept cash. Also, hello!!! Gift cards. Buy a gift card with cash, then use the gift card to buy the iPhone...durka.

[James P. @ Oct 27th 2007 12:46AM]

Yeah -- next time I order from Amazon.com I'm gonna send CASH! Actually, they don't take cash (just money orders and such...).

[Paul @ Oct 27th 2007 12:37AM]

oop, my bad. They don't have to accept cash.

http://www.treas.gov/education/faq/currency/legal-tender.shtml

"QUESTION: I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?

ANSWER: The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy."

[Duscrom @ Oct 27th 2007 2:25AM]

Apple isn't a private company.. it's a publicly traded corporation...

[Philometalist @ Oct 27th 2007 2:30AM]

This is ridiculous and it only makes me want to buy an iPhone less.

[IndiaTech @ Oct 27th 2007 2:30AM]

I think it is not illegal for a company to force a method of payment. I mean many stores enforce a CASH only policy. But i wont be surprised if someone files a lawsuit saying that Apple is voilated a persons civil rights... I mean they are clearly discriminating against some customers...
It is not a secret that CC and credit cards are much more prevelant towards higher strata of our society. But does it mean that a person who has no CC or DC cannot buy a iPhone. I dont know why he would want to buy one... But still...

By the way do they accept JCB? Or is it just Visa / MC / Discover / AE?

And from when is Reselling illegal?

[bignerd @ Oct 27th 2007 4:51AM]

digg this...

http://digg.com/apple/Apple_Sets_Limits_Says_No_Cash

[Mark @ Oct 27th 2007 5:40AM]

Apple just gets more and more disgusting.

What next? Literally spit on customers' faces?

[ssuk @ Oct 27th 2007 8:25AM]

@ Philometalist - Well, it forces everyone to buy less iPhones... =P

Anyway, this is litterally like saying "We don't want your money". Which makes me seriously question Apple's business ethic...

[LegendZ28 @ Oct 27th 2007 10:11AM]

I don't know that it's disgusting. I've been to many restaurants where they wouldn't accept anything BUT cash, and I didn't find that insulting. It's inconvenient, but not insulting.

Plus cell companies have been making arbitrary rules for years, now that Apple is in the cell game, you have to expect that they will too.

[Chris @ Oct 27th 2007 11:11AM]

Ummm... how much is that in pubes?

[elfjuice @ Oct 27th 2007 11:43AM]

You wanna buy an iPhone? It's gonna cost you... alot! but I don't take cash, only girlie giggles!

[fontendet24 @ Oct 27th 2007 2:33PM]

I think Apple is afraid about future sales of iphone in Europe - it can be worst, than any other manufacturer and one of the reasons of it is covered in that europeans buys it by Ebay in Usa, where iphone is much cheaper and without contracts.

[phone phreak @ Oct 27th 2007 3:59PM]

actually most of the phone companies are trying similar tactics. Most US phones are subsidized by a service contract, they cost much more than the charged price to manufacture / distribute. Most pay-as-you-go phones have similar restrictions, nomore than 5 at a time, etc. This is nothing new.

Most overseas companies that have unlocking charge much more for the phone - a phone that is free with contract or 39.99 pay-as-you-go may cost $200 us in europe; that's why there is this pirate phone issue as people buy US subsidized phones and sell them overseas without connecting to the subsidizing service. iPhones and the necessary BACKBONE networks are paid for by the local carrier and that is part of the subsidy

[Alex Brewer @ Oct 27th 2007 3:19PM]

"In some jurisdictions legal tender can be refused as payment if no debt exists prior to the time of payment (for example, where the obligation to pay arises substantially contemporaneously with the offer of payment). Consequently vending machines and transport staff do not have to accept the largest denomination of banknote for a single bus fare or bar of chocolate, and even shopkeepers can reject large banknotes — this is covered by the legal concept known as invitation to treat. However, restaurants that do not collect money until after a meal is served would have to accept that legal tender for payment of the debt incurred in purchasing the meal...

...The right, in many jurisdictions, of a trader to refuse to do business with any person means a purchaser cannot demand to make a purchase, and so declaring a legal tender other than for debts would not be effective." -en.wikipedia.org/wiki/Legal_tender

"In contract law, an invitation to treat (invitation to bargain in the U.S.) is an action by one party which may appear to be a contractual offer but which is actually inviting others to make an offer of their own. The distinction is important because if a legitimate contractual offer is accepted by another, a binding contract is immediately formed and the terms of the original offer cannot be further negotiated without both parties' consent. An invitation to treat may be seen as a request for expressions of interest.

A shop owner displaying their goods for sale is generally making an invitation to treat (Pharmaceutical Society of Great Britain v Boots Cash Chemists [1953] 1 QB 401). They are not obliged to sell the good to anyone who is willing to pay for them, even if additional signage such as "special offer" accompanies the display of the good. (But see bait and switch.) This distinction was legally relevant in Fisher v Bell [1961] 1 QB 394, where it was held that displaying a flicknife for sale in a shop did not contravene legislation which prohibited offering for sale such a weapon. The distinction also means that if a shop mistakenly displays a good for sale at a very low price it is not obliged to sell it for that amount.



The above is all applicable in the United States. Though the law specifies "private company," the law is trying to differentiate companies, private or public, from government agencies.

[AJC @ Oct 27th 2007 3:32PM]

The only reason restaurants "enforce" a cash only policy is because they are either too lazy or don't generate enough revenue to justify having a merchant account. Those things are usually around $30/month plus a percentage of whatever you charge on it.

[Mickey Jones @ Oct 27th 2007 3:56PM]

Remember Apple making fun of Big Brother in those old commercials? Now Apple IS Big Brother. They want to keep track of you. How about a barcode tattoo.

Keep your cult phone to yourself, Steve.

[jroc @ Oct 27th 2007 4:43PM]

@ Paul: It is illegal for them to even print up the legal tender let alone refuse cash for purchases. It is litterally counterfeit to print off all of the fiat currency. In the constitution it dictates that you must have a commodity-backed currency, it can never become legal tender. And they lend all of the money out at interest which is why we pay income tax.

[Bruno @ Oct 27th 2007 5:55PM]

Anyone know how to stop getting emails for every follow-up comment? I know how I could have done it in the first place, so I'm asking about now, after the fact.

[david @ Oct 27th 2007 7:54PM]

simply put no it's not illegal. over on the ehmac.ca forums a lawyer cleared up all the buzz about this.

[Peter Carr @ Nov 7th 2007 2:20PM]

Don't buy a gift card!
I just walked into the Cambridge, MA store with a gift card ($360 value) and some cash and was told I couldn't use either. Not even the gift card with a credit card.
This is ridiculous.

[vdogg89 @ Oct 27th 2007 12:23AM]

and how does refusing cash stop people from reselling?

[G @ Oct 27th 2007 12:58AM]

Meaning they probably require a US based credit card.

[azayzel @ Oct 27th 2007 1:15AM]

I'm not too sure of that many people who walk around with $500-600 in cash for any kinds of purchases (unless you're a drug-dealer), that's just waiting/asking to be mugged.

It's very easy to get around this, especially if they're crooks, use all the scammed CC #'s they've obtained from people and voila, instant, free, all-profit! Sounds shady, but typically resellers are just that. If they're "legit" eBay sellers, then they can just pay friends and relatives a few bucks to buy them.

All in all, this is just a stupid scheme by Apple to draw attention to themselves and sell more products.

[KarlW @ Oct 27th 2007 1:19AM]

This would work against people selling iPhones as unlocked. Apple could buy the phone (not new, fashion companies buy stuff to check for fakes in a similar way). Then, because the IMEI is part of the barcode, and they keep records for things bought with cards (I think they have to by law). Then, it's as simple as tracing the IMEI from their records back to the person who bought it, and sending the info down to the legal department. It's probably intended against people who buy tens or hundreds of phones to resell. Of course, you could just go in to an AT&T store and buy one, if they're still taking cash.

Of course, I'm not sure of the legalities of using card receipts to identify people, but I'd guess it probably is legal - the police do it all the time (although maybe they need a court order for that, again not sure)

[bombastinator @ Oct 27th 2007 1:23AM]

I asume it theoretically makes people trackable due to the electronic identity trail associated with plastic. I think the theory is going to be that the name on the card transaction has to match the name o the person looking for support.

This is not to say that their attitude about transferability are going to hold up in court. One is buying the phone after all, not leasing it. I personally think apple is getting totally out of hand regarding the iPhone. The company exists to a significant extent on the good will of it's unusually loyal customer base. Bullying them is a good way to lose that. I know I myself have more or less dropped out of the ranks of fanboyhood due to all this.

STEVE! It's iPhone not iPeon!

[Apple Sucks @ Oct 27th 2007 11:22AM]

Prepaid Gift Credit Cards with No/False Names.

[dcny @ Oct 27th 2007 12:23AM]

is that legal, thats a lawsuit waiting to happen anyone know, i was about to buy one with cash dont have a debit or credit card

[Taylor @ Oct 27th 2007 4:37AM]

Gift card. Go home.

[Geoffrey Swenson @ Oct 27th 2007 12:25AM]

If the product has a retail price aren't they obligated BY LAW to sell the product to anyone that has legal tender?

[John @ Oct 27th 2007 12:41AM]

No, the law is "all debts". They have to accept it if you already owe them money, but they don't have to take it if you want to buy the product.

[Big John @ Oct 27th 2007 1:34PM]

Wrong, and you were already proven wrong above.



http://www.treas.gov/education/faq/currency/legal-tender.shtml

"QUESTION: I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?

ANSWER: The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy."

[David Clark @ Oct 27th 2007 12:25AM]

Considering it is illegal to sell a phone without unlocking it after a certain time period, I doubt Apple's really worried about the legal implications of not accepting cash.

[Cunthor @ Oct 27th 2007 2:27AM]

Yes.

[guis @ Oct 27th 2007 12:26AM]

I just unlocked one I bought with my credit card. Are they going to come to my house and find me?

[bombastinator @ Oct 27th 2007 1:45AM]

I suspect that they may eventually come asking why you haven't activated your 2 year at&t account.

[Andrew @ Oct 27th 2007 5:32AM]

They don't require you to activate it as far as I know. They could probably check who's using their phones on other networks if they wanted to but that would probably break some laws. And besides that they're only looking to stop the *sellers* of unlocked phones from profiting from their shady trade.

[newgalactic @ Oct 27th 2007 4:24PM]

They won't come looking for you for that one phone, but they might refuse to sell you more then that first one or two. What they can't do is keep your credit card on file to be sure that you sign up for a contract with AT&T. Storing a persons credit card number without their knowledge is a pretty sticky legal situation. Apple doesn't own your credit card number. It's owned by the credit card company and you. Sometimes company's do store card numbers, but they have to be careful with it because it's not their property. I imagine that they need to remove it from their system if you so request. However, they do own any recipte numbers involved with a purchase, and those usually cross referece to a CC#. But in that case, the use and storage of the CC# is for a specifically designated purpose. Beyond that, Apple doesn't have the right to use your CC# for anything they want to. For example, it would be illegal for them to establish a database of customers with CC#'s stored in them without the customers knowledge.

[newgalactic @ Oct 27th 2007 4:35PM]

...What they could do is store the last four numbers of your CC# and your name, minus the expiration date. They could then limit the repeat sales of multiple iPhones.

On a side note, Apple has every right to refuse service to anyone for any reason. Prior to the sale if an iPhone, there is no "debt" at all between Apple and a potential customer. If said customer then tries to buy an iPhone with cash, Apple has a right to refuse. However, if Apple decided to let the customer go home with the iPhone on credit (the kind based upon faith, not a CC# (good luck)), they would have no choice but to accept cash to repay the debt. This situation is very unlikely to occur (try never). Beyond that, Apple refusing to accept Cash is just an example of them refusing service to a customer for any reason, a right that's been afforded to retailers for ages.

Apple = M$ in training

[facebookfake @ Oct 27th 2007 12:27AM]

yea. that is definitely illegal. "legal tender for all debts public and private."

[iheartbeer @ Oct 27th 2007 12:37AM]

I'm no lawyer, but I believe the key word here is "debt." It's not services rendered, it's a product being sold. I was under the impression that this was illegal as well... I guess time will tell. Either way, this is a big story that won't look good for Apple.

[Big John @ Oct 27th 2007 1:50PM]

I'm getting sick of posting this already...



http://www.treas.gov/education/faq/currency/legal-tender.shtml

"QUESTION: I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?

ANSWER: The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy."

[Jacob Kennedy @ Oct 27th 2007 3:45PM]

The problem is that the example in your paste from treas.gov is too long and confusing. I've read it twice and, like most laws, it's vague and can be interpreted several ways. While it says that a bus line can refuse payment in pennies or dollar bills it doesn't say that the bus line can refuse all cash payments. Same goes with the large denomination example - it doesn't say all denominations of cash. Granted, it does say that there is no statute forcing private businesses to accept cash.

Maybe just posting that portion of the answer would have sufficient and more clear. "There is no federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services." There, case closed.

Now my post is too long. :\

[Kai Cherry @ Oct 27th 2007 12:27AM]

According to the us treasury, it is NOT mandatory that private businesses accept legal US tender.

*Chuckle*

The dollar isn't worth anything...only debt slavery is.

[Kai Cherry @ Oct 27th 2007 12:30AM]

See: http://www.treas.gov/education/faq/currency/legal-tender.shtml#q1

[facebookfake @ Oct 27th 2007 12:39AM]

wow. that amazes me. can i demand that people pay me in chocolate?

[sepirioth @ Oct 27th 2007 12:27AM]

This is VERY ilegal. As Geoffrey mentioned, any legal tender HAS to be accepted. This wont last for more then 2 weeks. They are basicly saying that they want to be able to track the serial #'s to the original buyer... Remind me why MS is the evil empire?

[Kai Cherry @ Oct 27th 2007 12:28AM]

You are wrong.

[asdfsdffdsf @ Oct 27th 2007 12:40AM]

Do you people really think that Apple would act without asking their lawyers?