Work Abroad but earn in USD

Monday, September 15, 2008

The Problem with Monedas (Change/Coins)

This is really really annoying. To the point that I have to actually ask the question: is a single peso coin worth more than a two peso note? The answer is quite clearly yes! Several situations, the most recently of which just happened right now, as I sit here in this fair coffee shop, have popped up in the last week. Ok, so everyone knows that change is hard to come by in Argentina, that breaking 100 peso notes is hard, and that the buses only take coins, but it seems as if no one really understands the gravity of this problem. Here are a few situations: 1. Cab driver gives me a two peso note as change when I paid with a 20 for a fare that was 19.12. He would rather give the two peso note and LOSE MONEY than give up his coins. 2. Coffee shop last friday. Bill is 9 pesos. I pay with a 10 peso note. No change is given. I asked for the coin. Then they asked me for a coin so they could give me a two peso note. Why should I even have to ask for my change? I said I would leave an extra two peso note as tip if they gave me the coin. They said NO!!! (and they even laughed about it) 3. Coffee shop just now. Bill is 14. I pay with a 5 and 10. 1 peso change is due. No change is offered. Same situation as 2 (but a different location). 4. (And here is the kicker...) I go to the bank to get change. I walk to the front of the line to change a 5 into 5 coins. They say that they will only give 3. That their policy has changed. 5 is too much now. Oh, and also, I have to wait in the line of 40 people to do a transaction that will take all of 30 seconds. So the bank is putting up barriers (lowering/taking away incentives) to actually have correct change. Don't people realize that they are paralyzing their own economy when they do this? That when the people at the supermarket, or kiosk, or corner store refuse to make sales because they do not want to lose coins that there are dead weight losses? Everywhere down here there are signs posted (subway, train, stores, etc) that say "No hay monedas" or "Colaboren con monedas", and this does not help the problem. People are so afraid of giving away coins that they hoard them. I have seen many many kiosks that refuse to sell me a 10 centavo item for a 2 peso note because they know that I just want the change. So then I offer to buy something worth 1 peso, so I can still get the 1 peso moneda, and ride the bus--and they still refuse! This amounts to economic insanity. When the value of a one peso coin clearly outweighs the value of 2 pesos printed on paper, something is drastically wrong with the system. There are only 2 things that I see as possibilities: 1. People need the coins to take the bus. This is really the only thing in the whole of Argentina that operates only on coins. The bus system is also extremely extensive and is probably the main mode of transportation (although I don't have exact figures and the subway could be more) and as such, requires a huge influx of coins to operate. So the only logical explanation is that this huge influx of coins is not balanced by an equal outflow (i.e. the bus companies don't go to the bank and deposit these coins in their accounts thus giving the banks enough coins to give unlimited quantities as they do in the U.S. and other developed countries). But why would the bus companies do this? The only explanation I can come up with here is that they don't trust the banks and therefore hoard coins. Yikes. Anyone else have a thought on this? 2. There actually aren't enough coins in circulation. Supply and demand. Under supply and high demand. Again, the only place where there is a real high demand and no counterbalance is the bus system. Would it be possible to solve both problems (because they are not mutually exclusive) with a card system? As in people buy 10 peso or 20 peso bus cards that can be punched or scanned and avoid this change issue. I think that's wishful thinking.

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29 Comments:

Anonymous Anonymous said...

Last time I was in BA, it wasn't quite that bad, but I did notice a real reluctance to give up coins. It is crazy ... or is it?

9/15/2008 02:45:00 PM  
Anonymous Anonymous said...

I live in the north and I can tell you it's even worse here. We never pay with coins anymore, we leave all our coins in a jar at home so we always have for the bus.

I read somewhere that if you have a 100 worth of smaller coins (5, 10 centavos) you can change that into 150 pesos at the black market here.

Apparently making a 10 centavos coin costs something 18 centavos (this I have seen in other countries as well and they usually started fading out the smaller coins).

9/15/2008 03:36:00 PM  
Anonymous unstuck said...

I grew up in Canada where there is an EXCESS of coins and everyone is always trying to ditch their coins so it was hard for me to get used to this. My parents (who are from Argentina) say it's always been a problem, it's not some recent shortage so I don't know if there's some issue with the mints, or what.

It's absolutely true that the value of coins is distorted because of their rarity -- and it pisses me off how non-chalantly the girl at Coto won't give me my 10 cent change when in Canada people will WAIT for their 1 cent and get it.

I guess they are different views towards precision -- in Anglo culture, for ex, saying I'll there there at noon means I'll be there at noon. In latin cultures, it means I'll be there sometime in the afternoon if I feel like it.

I guess it's the same with change :P

9/15/2008 04:26:00 PM  
Blogger Don Gonzalito said...

Withholding small change could be a trick to slower circulation and combat inflation.
And it seems to be somewhat working, at least at a public perception level, for what you say.

9/15/2008 04:57:00 PM  
Blogger Geoff said...

There's definitely a reluctance to give up coins, especially 1 peso coins. I live in Río Rallegos and take the bus to University and back five days a week. To the dismay of the bus driver I show up with a hodgepodge of 10 and 25 cent coins to pay for a 1.60 bus fare. I end up going to the kiosco to buy junk so I can have bus change.

9/15/2008 05:57:00 PM  
Blogger Kevin said...

After being frustrated by the situation in Buenos Aires, I was surprised to find that the same problem is not present in Cordoba. In Cordoba, buses have their own currency, the Cospel. However, it has its own problems, and there are signs in Kioskos throughout the city that say, "No hay Cospeles". The stores that do sell them are often very hard to find, especially outside the city centre. However, it does alleviate making every day purchases, and Cordobes taxi drivers are usually willing to give a single peso coin as change.

9/16/2008 04:57:00 AM  
Anonymous Anonymous said...

Yes there's definitely a huge problem, and it's getting worse. And I'm getting more and more angry with people that don't return your change and just silently stare ahead (taxi drivers who 'assume' you've just tipped them) or waiters that magically disappear from your table.

There was a documentary on this a few months ago -- about the Chinese supermarkets and their handing out of those silly candies instead of change -- by the end of the year this converts into 100s of thousands of pesos saved.

Where do the coins go? Rumour has it that they are melted down into scrap metal and then sold at high costs. This I could believe - except that I'm not even convinced that there's much in th way of actual metals in half these coins!

9/16/2008 09:29:00 AM  
Blogger Matthew said...

Here in Mar del Plata, there isn't much of a problem with coins, and I would assume that a lot of that has to do with the fact that the buses use a debit card system (which creates other annoyances).

The big problem here is breaking $100 notes. Daniel mentioned it before as if it were a given that it's hard, but man it is a huge pain in the ass here. A lot of times it really does feel like $10 notes are more valuable than $100 notes. In fact, there are only a few places that will give change for a hundred, and the only one I can really think of right now as I'm writing is a grocery store, and even that's probably limited to the big chain ones. The madness of it all is that unless you want to wait at the bank in the literally 50 person line that curls around the block, you're forced to accept $100 notes every time you go to an ATM. So taking out the money is only half the battle of replenishing your cash supply. I accepted it as it was for the first few months, but man it is really really starting to piss me off. Running simple errands can become a serious hassle if you discover you only have 100 peso notes and it can delay you seriously. It becomes a confounded scavenger hunt sometimes. It really just makes you think why the banks just don't round up a lot of the 100 peso notes and print off more 50, 20, and 10 peso notes. Nobody else here seems to care because the attitude here is "es asi" and no one tries to do anything about it. It's really ironic considering there is some sort of protest or strike here every other week.

9/16/2008 01:36:00 PM  
Anonymous unstuck said...

Matthew,

I think someone should right a book about that paradoxical attitude of Argentineans that you describe! It's soo true and so perplexing. On the one hand they complain about everything (particularly here in Capital) and when you suggest improvements/changes they say "Nooo but that would never work HERE." I find this self-defeatist attitude the single most frustrating thing about living here, and the number 1 problem facing Argentina today.

9/17/2008 06:49:00 PM  
Anonymous Anonymous said...

First of all, welcome to argentina. These kind of things are classics in Argentina.
I'd like to point out that there's a parallel market of coins, i.e. the bus companies "sell" the coins in the big market with a 10% revenue.. this is one of the explanations.

10/06/2008 01:10:00 AM  
Anonymous Anonymous said...

Well many people here in BA say it is the mafia which owns the bus system that is responsible for the falta de monedas. The mafia hoards the change, and then sells it back at a higher price to groceries and the government. Just this week 5 million pesos in change was found in armored cars which were being stored in a warehouse.

10/14/2008 10:56:00 AM  
Anonymous Heart of Argentina Travel said...

I keep on surprising myself about this issue, and I can tell you that in the interior of Argentina, things are the same. Here, in a small village in the Sierras de Córdoba, when buying for example two bottle of wine for 7,70 pesos and paying with 8 pesos, I keep on getting return money of 50 cents. And even in the bigger supermarket chains like Disco in Córdoba capital I also experienced that they give away money, only to prevent paying you back in monedas. Very inefficient and in the long run very expensive.

10/27/2008 09:37:00 PM  
Blogger Michael said...

Last year when I was in Argentina the bus trips cost 80 centavos, so if you paid with a peso coin, you would at least get 20 centavos back. Now the bus trips cost 1 peso, so there is no longer any way to get change from the busses. So whereas the bus company used to get most of the change, now they get all of it. It makes me think that the fare will remain at one peso for a long time, because if they raise it again, they will have to give out change again. I really think that there is a change mafia -- all over the place you hear about them selling 90 pesos worth of coins for 100 pesos in bills. Furthermore the rumour about them melting down the coins seems to make sense considering how much value the peso has lost since 2001 -- that it literally might not be worth the metal it is made out of. I find that the best places to get coins are large pharmacies (just buy some gum for 80 centavos and pay with 2 pesos) or places that sell tartas for 7 pesos (pay with a 10 peso note). I hope you like tartas!

11/03/2008 11:53:00 AM  
Blogger Johnnie said...

It seems to me that the main problem is that the only way to pay for the bus is with coins. The collectivos have all the coins but there seems to be no way to obtain the coins from them. It is crazy here when you are walking 10 blocks because you don't have 30 cents in change.

11/04/2008 05:33:00 PM  
OpenID Sam said...

Great post. I wasn't aware of this problem until recently and I wrote a post you may find interesting:

http://justtangoon.com/2009/01/22/making-change-happen/

1/28/2009 10:43:00 PM  
Anonymous Anonymous said...

WOW! that's all i could say after reading this post. Living here in America, I hate it when people at some stores give me 4 quarters in change instead of a $1 bill.

2/08/2009 09:28:00 AM  
Blogger Tristan said...

I never use to understand why cab drivers would refuse to take me anywhere when i showed them a $100 bill!

2/12/2009 06:14:00 AM  
Blogger Toby said...

I know a guy who owns a kiosko in BA (on Rivadavia in Liniers) and he has been offered several times over the last year to buy coins directly from the bus companies. They want to sell him 100 pesos in monedas for 110 or 120 peso bills. He always refuses and has to spend 1-2 hours a day going to 8-10 different banks changing bills for coins. It really will hurt the economy long term and I don't understand why the government doesn't do anything about it. Someone is getting paid off somewhere along the line.

2/22/2009 05:59:00 PM  
Blogger Michael said...

As overdue as it is, it looks like the government is finally doing something about the chronic shortage of coins in Buenos Aires. Apparently they are going to introduce a card system for public transportation, which should do much against the problem since everyone in Buenos Aires uses the bus and will presumably no longer have to hoard coins. I hope it works and puts the moneda mafia out of business. We'll see.

2/22/2009 07:56:00 PM  
Blogger John.St said...

Never had the 'no cambio'/moneda problem except in BsAs.

Here in Mendoza 1½ years), I have sometimes offered a 25 or 50 centavo for a buy of xx.25 or xx.50 and the shop owner wasn't even interested, so I get a handful of coins in stead.

Only 5 centavos are a problem, I have a small box full of awful candies given me for 5 c.

3/19/2009 05:40:00 AM  
Blogger Captain Eyeliner said...

Hello. I am traveling to BsAs (from Canada) for ten days starting next Thursday (the 26th of March). I am making an audio piece about the recession and what I can learn from Argentina's experiences through financial turmoil. If the recession gets really bad in Canada (and the rest of the world) I can see how issues like the one addressed above could spread. Daniel, would you please email me if you'd like to talk further about this? I can be reached at misternobu at gmail dot com. My piece is going to be a personal journey as told by me, with snippets of recorded conversations with an accompanying photo essay. I am looking to speak with a variety of people, business owners, taxi drivers, tango instructors, market stall sellers, street food vendors, non profit financial people, professors on economics, sociology - and people of all ages as elders will have a different perspective having lived through so much versus a younger person contemplating his/her future in such unstable times. If anyone has any comments, or suggestions, please drop me a line at the email above. Time is of the essence. Many thanks.

Nobu

3/19/2009 03:35:00 PM  
Blogger Shelly said...

In Puerto Madryn, Patagonia, we have 7 or 14 peso bus cards!

7/20/2009 06:01:00 PM  
Blogger Nicolas said...

I thought the problem should go away a little with "monedero", the card.

10/20/2009 04:34:00 AM  
Anonymous Anonymous said...

There is no real shortage of coins.

In 2008 the government issued some 140,000,000 1 peso coins.

The problem is that people know from older experience, that there was a shortage and thus are hoarding coins in the hundreds of millions, creating an artificial shortage - why explain as evil, what can be explained as simple stupidity.

10/20/2009 05:02:00 PM  
Anonymous Anonymous said...

yeah, i´m in buenos aires right now and I´ve had one time where they did not give me change but i went out yesterday and came back with 4 and half pesos worth of change. i guess i´m not being needy enough for them to reject me.

4/06/2010 05:56:00 PM  
Anonymous Anonymous said...

It's simple: The metal on the cpins is worth much more than the teorical cvalue of the coin.
This was caused by the peso devaluation, wich decreased the value of the coin to 1/4, and also was caused by the international price surge in metals.

So, coins are scarce because some people sell them as metal.

7/25/2010 02:48:00 AM  
Anonymous Anonymous said...

The situation is better right now. A part of the problem seems to be that transporting coins is less profitable than transporting bills to the money transportation companies and that's why they try to focus on the bill transportation. They were sanctioned like an year ago when an inspection found tons of coins in their deposits.

3/02/2011 08:36:00 AM  
Blogger Jeremy F said...

a kilo of coins on the border of bolivia is going for $1000 pesos. far more than the actual face value of the coins. this will not change until the peso is at least 2:1 with the dollar...which isn't going to happen.

9/13/2011 03:09:00 AM  
Anonymous Anonymous said...

Now in 2012 the coin problem finally seems to be fixed in BsAs. A federal gov't initiative has installed card scanners on all buses, which can also be used on the subway. The Monedero cards are no longer being issued, but locals and foreigners can easily obtain a SUBE card with a DNI or passport.

Not only is it easier to catch the bus, but obtaining coins is much easier too. Bigger supermarkets, like Coto and Carrefour, will sometimes give $7 in change. ...I have no idea if the situation has improved in the provinces.

As for venders losing money in a transaction, it's related to Argentine law which favours the customer. So if the bill is $9.90, the store is legally obliged to give you at least $0.10 in change. If they don't have it, then they're obliged to give you more.

2/19/2012 05:22:00 PM  

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