Posted by: Stephen Wildstrom on October 30, 2007
Can Apple really refuse to accept either cash or its own gift cards as payment for iPhones? In an effort to stop the sale of the hot phones to folks who want to resell them, presumably after unlocking them, Apple has banned these standard forms of payment at Apple Stores.
In the case of cash, at least, it looks like the company is on solid legal ground. It turns out that the U.S. Treasury takes an extremely literal view of the language on every Federal Reserve Note saying it is “legal tender for all debts, public and private.” If you owe someone money, the law says they must accept greenbacks in payment. But, says the Treasury Web site: “There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services.”
Apple’s position seems a lot shakier when it comes to refusing its own gift cards, a policy first reported by Engadget and confirmed by Apple. A gift card is a sort of contract between Apple and the buyer and Apple’s own Web site says:
What products can I purchase using an Apple Gift Card?
You can purchase just about anything sold by Apple (except another Apple Gift Card, an iTunes Gift Certificate or purchases at the iTunes Music Store), including products from both Apple and third-party makers.
Even the fine-print “terms and conditions” fails to mention anything about iPhones being excluded. An Apple spokesperson explained: “This is simply a new policy at retail. I don’t have further explanation. As I understand it, the Apple web site still has a different policy.”