Paying cash for an iPad: A quick guide

The tech blogosphere leapt all over the case of an Apple Store that refused to sell an iPad to a customer who wanted to pay cash. "I had my cash in the backpack and I went up proudly to the counter and told them, 'I would like to purchase an iPad,'" Palo Alto, Calif., resident Diane Campbell told ABC News. "They said, 'Sorry, we don't take cash.'" But does a business really have a right to refuse cash as payment? Here, a quick guide to the issue:

Isn't cash good for "all debts, public and private," as printed on our currency?

Yes. Section 31 U.S.C. 5103 of the Coinage Act of 1965 specifies that, "United States coins and currency ... are legal tender for all debts, public charges, taxes, and dues."

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Then why did Apple deny Campbell her iPad?

While the law guarantees that all United States bills are a valid form of payment, no federal statute exists that requires private businesses to accept cash. So Apple, or any other business, can develop its own policies on the matter. In practice, that might mean requiring payment by check or money order — or simply refusing to accept bill larger than a $20.

Why did Apple have a "no cash" policy?

After releasing the iPad, Apple instituted a two-per-customer limit, enforced by requiring purchase with a credit or debit card. The rule presumably was intended to keep people from buying up large quantities and selling them overseas, where the iPad has not yet been released.

Did Diane Campbell eventually get her device?

After hearing about the Campbell incident, Apple quickly reversed its plastic-only policy — and hand-delivered a complimentary iPad to Campbell's house.

So now I can pay cash for an iPad?

Yes — provided you set up an account with Apple at the time of purchase. This allows the company to maintain their two-per-customer policy, while giving shoppers like Diane Campbell an additional payment option.

Sources: ABC News (2), U.S. Treasury, Engadget