On shortage of ‘change’

After a recent meal at a club, I came across a phenomenon that had been on the back of my mind for some time. The issue of the shortage of loose change and whether it is deliberate or unavoidable. On a Rs 324 bill, the waiter inevitably did not care to bring back the Rs 6 change on a Rs 500 note and presented only Rs 170.

Apart from being presumptuous enough to assume that I would not notice or would simply not care, there is an economic and business angle here.

The moment you stop valuing the lowest denominator of your currency, the Re, it underlines a weakness in your economy and is a pointer to the low-purchasing power. ‘One Re does not buy anything, is the common refrain’ in this regard.

Yes, it might buy very little or nothing at all, but still exists and thus holds value for the bearer, unlike the 25 paise coin that is now out of circulation. Another aspect is that there because the rupee is rapidly losing value because of inflation, innovative traders and others are simply melting the metal and using it to make simple every-day use products like blades, razors and the like.

This is an example of value-addition that does enhance the value of the metal but exacerbates the shortage of change for everyday transactions, ensuring that there remains a premium to get change for a honest trader.

How many times it is that no one bothers to return you the one-Re or the two-rupee change at high-end showrooms and the customer is also timid in asking for it, under the notion that it makes him across as cool.

In fact, the customer has been taken for granted and also reflects on the cultural norms that we have taken for granted in this part of the country, especially. I remember that the store attendants in Chennai would return your change to the last 25 paise, when I was a student there a decade age.

So, granted that shortage of change might be a major reason for the pennies going missing from your wallet. However, I suspect another cause is just plain greed on the part of the service providers at an individual level or in some cases, also at a store policy level. The Indian railways now has a rounding-off policy in policy where expect for a certain category of fares, everything is rounded off to the next higher multiple of 5.

Another new development is that no one even thinks it worth their while to even pass on sweets for the missing change. It is also striking that no one seems to protest. To some, it might seem a minor issue, but think. Would the same shopkeeper accept two rupees less and more importantly, in a card transaction wouldn’t is strike you as odd that he deducts Rs 900, when the cost is Rs 899? Will a cheque of Rs 1 less do? These are inconvenient questions, but attest to the power of the missing Re?

What is the impact of this now wide-spread habit of allowing change to simply go accounted for even for organised businesses? Does this always have to be negative or can there be some unintended benefits? These issues will be tackled, with reference to the tricity, in the next piece.