American Airlines: Cash Is No Good

http://www.canada.com/business/Consumer+Confidential+Your+cash+good+here+airlines/2494495/story.html

Summary:
The American airlines are not accepting cash during their flights. People are forced to use credits cards regardless of how minor the purchase is. Despite American cash being legal tender for all debts, privately owned airlines would rather make transactions through credit cards. There is no law that require private businesses to accept currency or coins for their goods and services. Privately owned businesses can make up policies accepting the form of currency they want. Cashless flights make it more convenient for flight attendants because they don’t need to carry cash. There would have to be machines on the flight to make these transactions possible.

Connection:
The American airlines have the rights to reject cash on their flights. When currency such as the American banknotes is not accepted for repayment, it is not considered a legal tender. They can accept anything they want but they choose to receive their payments by credit cards. These private airline businesses can even choose to barter if they want. The barter system would allow an individual to trade a possession for a good or service. For example, a watch can be traded for 5 meals. Today, money is used as a medium of exchange and it acts as the unit of account. On flights, people are more familiar with the American dollar because most things are bought and sold with actual cash. The reason for this is because the American currency is fiat money, it is considered money because people believe it has value even though it’s just paper. But, for the convenience of electronic transactions American airlines prefer credit cards over cash.

Reflection:
I have seen restaurants that accept only cash, but I have never seen any place accepting only credit cards. The American airline prefers to make transactions electronically only but in my opinion this would reduce the circulation of money. Not every individual would have a credit card or they may be under age to even have a credit card. Gresham’s Law states that bad money forces good money out of circulation. In this case, the credit card is forcing American banknotes out of circulation on the flights. If the currency is not in circulation, it cannot be considered as money. In my opinion, paper currency is more convenient for the consumers because it is recognizable and readily accepted but American airlines do not have the same opinion about paper currency.