…first a bit of background

I remember when I was in high school I worked at a furniture store where a woman had purchased nearly a house full of furniture and wanted to put it on credit saying she was waiting on a settlement check that had not arrived. Her credit was approved and her account was to be sold to General Electric Credit Corp by the end of the month. She returned two days after the sale with a hand full of CASH, asking to pay off the account. Because the account had not been set up yet, the teller had no idea where or how to post the payment, so she told the lady to comeback when she got her statement. She politely left, only to return later with a man at her side and requested the same thing. Again she was told they could not take her money until she had an account number. Then the man introduced himself as her attorney and asked to see the credit manager. After consulting our company lawyers, it ended up that the woman got all the furniture FREE because WE had refused payment when she presented it. As I remember, any other type of payment could have been refused EXCEPT cash. So, EVERYONE who worked there spent a couple of off days learning the law as it pertained to this situation and NEVER to turn down a payment. (This example was not hearsay or some tale I once heard but a real personal experience)

SO THE QUESTION IS: When you go to a place that has a sign posted “No bills over $20 accepted” AND they refuse payment with a larger ($50 ~ $100) bill are they in violation of the law and your purchases FREE because you presented payment and they refused? I fully realize WHY they don’t want to take large bills AND that you can do anything you can get away with, but BOTTOM LINE is it legal for them to selectively refuse legal tender?

NOTE:
I found that a merchant could refuse coinage if it exceeds 13 coins. Although seldom ever exercised I believe it was on the books to prevent someone from presenting a large sum of money in pennies (or such) as payment and impeding the business from doing business. I understand there is no limit on bills (just coinage).