There is a well-known episode of the comedy show ‘The Office’ in which David Brent argues that postage stamps are legal tender. It’s an argument that comes up in many a pub discussion, so what’s the truth?
To begin with, we have to deal with the term ‘legal tender’ as it does not mean what most people think! In fact, it’s a little-used term that really belongs only in the courtroom, and not in everyday life.
If you are paying a debt, and you present payment in Sterling – either notes or coins up to a certain value (more of that in a minute) the debt cannot be refused. That is what legal tender refers to. It has nothing to do with simple, ordinary transactions such as buying goods in a shop.
You also have to offer the exact amount for it to be a legal tender transaction. All notes issued by the Royal Mint in Sterling are legal tender, and all coins too, but smaller denomination coins are only legal tender up to a certain amount!
For example, the 50p coin is legal tender for any amount up to £10, but not over. So, if your debt is £11, you can’t make a legal tender transaction solely in 50p coins . Likewise, all the copper coins are legal tender up to 20p, and no more. Why do you need to know this? In truth, you don’t, as it is very unlikely that it will ever trouble you.
What you do need to know – for pub arguments – is that Scottish bank notes are not legal tender. In fact, no bank notes are legal tender in Scotland, even those issued by the Royal Mint. But what does it mean? We’ll come back to stamps in a moment, we promise!
Retailers and Legal Tender
Let’s start by laying down a rule: no retailer is obliged to accept your payment, whether it is exact or otherwise. That applies even if you are paying with notes or coins that are legal tender. Another confusing fact here is that an advertised price does not have to be adhered to by law. Many retailers will honour a mistake, but they are within their legal right not to sell you the item.
A brief lesson in retail law: a price marked on an item is not strictly an advert. It is what is known in law as an ‘invitation to treat’. You then take the item to the till and offer the money: you, not the retailer, is making the offer.
The retailer can then either accept the offer or reject it – there is no legal obligation for them to take your offer.
So, if an item is marked up at the wrong price, there is no legal obligation for the retailer to accept your offer of that price. You could then take them to court for ‘false advertising’ but if they can prove it a mistake, they have done nothing wrong.
Before we talk about stamps, it’s important to remember that fact: no retailer is legally obliged to sell you anything, or to accept your offer.
So, About Stamps!
We find the subject of legal tender so interesting we forgot about stamps! The answer is no, stamps are not legal tender. Only notes and coins issued by the Royal Mint are legal tender. However, stamps do have a value.
Therefore, you can use them to settle transactions. But we’re back to square one, and that binding law: no retailer is obliged to accept your offer – which in this case would be stamps to the value of the item in question.
It would be a curious way to pay for an item in any case, but in theory, you can pay for items with stamps. One last thing: don’t get confused between legal tender – which we have described above – and legal currency.
The latter is any currency that can legally be spent in the UK – including Scottish and Northern Ireland bank notes. So, next time someone tries to clever about legal tender with you, show them this article!