Cash is King Again: New Bill Mandates Retailers Accept Cash Up to $500, Bans Credit Card Surcharges

The newly introduced Payment Choice Act of 2025 is looking to put cash back in the driver’s seat. This bill mandates that virtually all retail businesses that accept in-person payments must take physical U.S. currency for transactions up to $500. For anyone who prefers cash, or relies on it because they don't have a bank account or credit card, this is huge news. The core idea, according to Congress, is that if a store takes payments in person, it shouldn’t be able to turn away legal tender.

The End of the Cash Penalty

One of the most significant changes for consumers is the ban on price discrimination. If you’ve ever seen a sign saying, “Credit card purchases subject to a 3% fee,” this bill targets that practice. Specifically, it states that a retailer cannot charge a higher price to a cash-paying customer than they charge someone using a credit card or other non-cash method. This means whether you’re paying with a twenty or tapping your phone, the price tag must be the same. This provision (SEC. 3. Cash Pricing Rules) levels the playing field and ensures cash users aren't penalized just for their payment choice.

The ‘Cash Only’ Loophole and the Prepaid Card Catch

Retailers do get a few outs. If their point-of-sale system crashes, or—and this is a big one—if they temporarily don’t have enough small bills to make change, they are excused from taking cash at that moment. But the bill also introduces a fascinating alternative: the prepaid card loophole (SEC. 3. When Businesses Don't Have to Take Cash). A business can opt out of taking cash if they offer a device that instantly converts cash into a prepaid card. This sounds like a decent compromise, but the bill sets strict rules around it: no fees for the conversion, no minimum deposit over $1, and the card balance can’t expire. Crucially, the machine cannot collect any personal identification information. However, there’s a catch: after 12 months of inactivity, the card can be hit with an inactivity fee. For the unbanked or those using cash intermittently, this means a portion of their money could slowly disappear if they forget about the card for a year.

The $50 Bill Question and Retailer Risk

For the next five years, businesses are not required to accept $50 bills or any larger denominations. If you’re buying something for $40, you’ll need a $20 or smaller. After that five-year grace period, the Secretary of the Treasury must issue a new rule requiring businesses to accept at least $1, $5, $10, and $20 bills. This temporary exception gives small businesses time to adjust their cash management, but it also means carrying around a lot of smaller bills for now.

For retailers, the bill introduces a new layer of risk and compliance cost. If a business refuses cash improperly, a customer can send a notice, giving the store 45 days to fix the problem. If the store doesn't comply, the customer can sue in federal court. If the customer wins, the retailer is liable for actual damages or a minimum of $250, plus they face civil penalties of up to $1,500 for repeat offenses. On top of that, the court can award the winning party up to $3,000 in attorney’s fees. This private right of action means that even a small, technical violation could lead to a costly legal fight, putting pressure on businesses—especially those with thin margins—to ensure their staff is strictly compliant (SEC. 3. How Customers Can Take Action).

ATM Transparency

Finally, the bill throws in a mandate for the banking sector. The FDIC and the National Credit Union Administration will have to start reporting to Congress annually on how many ATMs their regulated institutions own and operate, including where those ATMs are physically located. This is a quiet but important step toward understanding the true accessibility of cash for withdrawal, which is crucial if we’re going to mandate its acceptance everywhere.