THE CASE OF THE $20 CUSTOMER
Demonstrating that $20 (Pesos) can be worth $7 million

Posted: July, 2004
 

I have read -- certainly with much worry -- the news item in which the Superintendent of Industry and Commerce is studying the possibility of charging to a prestigious department store chain a fine of seven million pesos because one of its cashiers did not return twenty pesos change that was owing to a customer. This event, which happened inadvertently, is briefly featured in the recent issue of Semana, where the Superintendent make aware to the public that this sanction will serve as an example in favor of the laws that protect the consumer.

The truth is that I do not want to take a controversial stand on this matter; that is to say, if this seven million pesos fine that will fall on this charged firm is fair or not, but I indeed want to take advantage of the impasse to warn everyone that these reported facts could be avoided in the immediate future if the Congress of the Republic (el Congreso de la Republica) would approve a proposed law that would create a New Peso Nuevo Peso for COlombia. This is an initiative that only remains to be debated before it is put into law. I am the author of that law.

Not in vain the referred case puts into evidence the necessity that, for transactional reasons, in the marketplace there exists certain types of low denomination coins, including the lowest value of circulating coin: the $50 piece.

My proposal for modifying the Colombian monetary units with the adoption of a new peso through the elimination of the last three zeros will permit the existence of fractional money that will enormously facilitate the daily transactions of Colombians since, for example, the ten peso coin ($10) will return to the Colombians' pocket as a one cent coin. It will be taken for granted that there will also be new 1 New Peso, 50, 20, 10 and 5 Cent coins.

But aside from resolving the problem of the lack of cash, the approval of this proposed law will likewise put an end to a deep-rooted custom in Colombian culture which is the famous and almost obligatory rounding off of prices that must be carried out, either by generally rounding up to solve the problem of exact return change when small bits of currency are not exchanged or simply not returning change to the customer as already has been seen.

The seriousness of this matter is that if we do not correct such faults as these, the lack of loose money will keep on generating a hopeless inflationary effect that will go against the thrift of the citizens' pocketbook.

Since twenty pesos sounds like an insignificant sum -- and many people are horrified that a customer has made such a scandal over this -- the truth is that the sum of many pesos can wind up in the millions. To cite an example, photocopies have gone up from $70 to $100 per copy, and this is proof of the inflationary cycle that, at a glance, no one sees. Thus, we can make a list of articles and services that are subjected to this rounding off.

It can not be pointed out that in the last few years low denomination coins have been converted into an obstacle even for the beggars, according to data from the Bank of the Republic (Banco de la Republica). In this country there is in circulation the contemptible sum of six billion coins. The majority of them are in homes in piggybanks that no one looks at or jars or moneyboxes.

But what happened with the twenty-peso customer demonstrates that the difficult economic situation that Colombia is experiencing forces people to give real value to these denominations. A saying that had value in the times of our grandfathers is in vogue today: Take are of your cents because the pesos will take care of themselves!

Source: Jose Jaime Nicholls, Senador de la Republica (2003)
Courtesy: Bernardo Gonzalez White, Medellin