A Question about Paying with Coins

Question of the month from the Garvie Reading Room:

I had over one hundred loonies in my money jar. I rolled them up and took them to the grocery store. I tried to pay my $100 grocery bill with the loonies, but the cashier wouldn’t let me pay with them. The store manager said that he didn’t have to accept the coins for my purchase. Is that true? My friends say, “Of course you can pay with loonies. They’re legal tender in Canada!”

 

The law in Canada (specifically the Currency Act) does say that coins issued under the Royal Canadian Mint Act (such as our $1 coins which we affectionately call loonies) are legal tender in payment for purchases. However, the Currency Act also says that there are limits in how many coins you can use in one transaction. Section 8(2) says:

“A payment in coins referred to in subsection (1) is a legal tender for no more than the following amounts for the following denominations of coins:

(a) forty dollars if the denomination is two dollars or greater but does not exceed ten dollars;

(b) twenty-five dollars if the denomination is one dollar;

(c) ten dollars if the denomination is ten cents or greater but less than one dollar;

(d) five dollars if the denomination is five cents; and

(e) twenty-five cents if the denomination is one cent.”

 This means that you can’t actually take a hundred loonies to pay for your $100 worth of groceries.

The Currency Act goes on to spell out in section 8(3) that more than one purchase from the same place in one day is considered to be one total amount for the purpose of these limitations. So you cannot try to get clever and divide your $100 purchase into four $25 purchases so you can pay each with your loonies!

That leaves all of us spending our coins a little at a time, or going to the bank to trade them for bills.

You can learn more about the making, use and collection of coins from the Royal Canadian Mint website.

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