My concept of legal tender is that when it is offered as payment, it cannot by law be refused in settlement of a debt, and have the debt remain in force. The U.S. Federal Reserve notes in my wallet state "This note is legal tender for all debts public and private." If so, how is it then that some businesses are able to refuse accepting cash as payment, car rental for instance? Is this scenario instead considered an invitation to treat and the debt has not actually been incurred and therefore the business is under no obligation to accept payment by cash?

If you rent a car, and something happens to it or you don't return it, or something like that, would the company be able to charge you for it? Since they have your credit card number? Is it like a safety for them? That's the only thing I can think of

I think it may be for the safety of their offices so they don't have large amounts of cash on the premises as I doubt the average Joe has a card limit sufficient to cover the cost of the entire vehicle in the event it isn't returned. I understand the risks and additional precautions a business must take to accept cash but I'm wondering how/why refusing to accept cash is legal.

Hm. That makes sense.

Can stores really decide which legal tender they will accept? - Yahoo! Answers

OK, this is from another question and answer site. But it's quoting from what appears to be a legit site.