The E-Sylum:  Volume 9, Number 43, October 22, 2006, Article 9

MOSCOW's SMALL CHANGE PROBLEM

"Restaurants do it. Minibus drivers do it. Even thinly clad strip
dancers do it. But having exact change for customers has yet to
become a habit for many others.

Yekaterina Panteliushina, an investor relations manager, recalled
being handed tubes of toothpaste and two toothbrushes in lieu of
change at the dentist."

"Reluctance to give out change, or an inability to serve customers
due to a lack of it, can be a bewildering or frustrating experience.
Admittedly, the situation has improved since 2000, when breaking a
500-ruble banknote outside a major supermarket was nigh impossible.
But about two-thirds of all banknotes in circulation are 1,000-ruble
bills, and their share grew by 5 percent last year, according to
Central Bank data. In addition, the recent introduction of a 5,000-
ruble note is not promising to make things any easier.

An informal survey of about two dozen people found that larger notes
are usually accepted by major supermarkets, upper-end restaurants,
late-night flower shops and minibuses.

In contrast, kiosks, street stalls, economy-class retailers, fast-
food chains, taxis and regular restaurants tend to insist on the
exact amount, at times turning away customers with larger notes.

"The reason many merchants ask for exact change is simple: to
avoid bank fees.

Banks charge to collect and deliver cash. The cheapest delivery fee
at Promsvyazbank, for example, is 750 rubles -- 450 rubles for the
driver and 300 rubles for the cash.

Banks also can charge for orders of coins and banknotes in
specific denominations and to tally the collected cash.

The whole service -- cash collection and providing change -- is
too expensive for most shopkeepers to order daily, so many order
once or twice a week."

"The fees appear here to stay because they are a cash cow for banks.
"Cash collection is an expensive banking service," said Maria
Davydova, a retail analyst with FIM Securities."

"Seventh Continent said it was seeing a deficit of 50-ruble and
100-ruble notes, while supermarket chain Kopeika bemoaned a lack
of coins of all denominations in its regional stores."

To read the complete article, see: Full Story

  Wayne Homren, Editor

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