JEDDAH: There is a widespread practice in the Kingdom not to accept coins as currency. Most people in general, according to many shoppers, prefer to exchange the half-riyal change for chewing gum or any other item of the same price.
Some people hate to carry coins considering them to be unnecessary. In fact, some shops do not keep coins and force buyers who want change to either take packs of gum, packets of tissues or other small items or return what they have bought.
The practice of not giving change has made packs of gum the most common substitute for a half-riyal coin. Coins have gradually lost value here unlike in other countries where people value them.
Arab News visited more than 15 shopping centers and found that all cashiers keep chewing gum to return change. Muhammad Salem, a Yemeni cashier in a grocery shop in Al-Salamah district, said he rarely sees people wanting their half riyal back and instead ask for gum. “When I tell them that the price is something like SR14.50, they immediately grab a pack of gum,” said Salem.
Muhammad Gul, a cashier at a shopping center, said he has lost customers because of the 50-halala change. “Saudis in general and many other people do not like to carry coins. I have suffered a lot because of this. When I return 40 halalas back as part of their change they throw it at me and ask me what they are going to do with it. I even had a customer who returned a product that cost SR2000.50 simply because I insisted he take his 50 halalas back. To save time and since people do not like coins we round up the price. Instead of charging SR4.50 we charge SR5,” he said.
“In Saudi Arabia people don’t value coins very much. Frankly speaking nobody takes coins seriously. Not even supermarkets. But if you go to Europe or America you see the difference. Coins are very valuable there. Every penny counts,” he said.
“Pennies make pounds, well that’s what we say in the UK,” said Ismail Muhammad, a British expatriate in Jeddah. “It’s funny how people don’t value even little bits of money. In England people wait for their one pence change. There was a time expatriates used to collect the 50 halalas. People used them at phone kiosks in downtown Jeddah to ring home,” he added.
The role of money in a modern economy has obviously changed over the years. With improvements in technology and for security purposes the use of coins and notes has grown less. Other forms of money are used today such as checks, credit or debit.
This brings into question the use of coins and notes. John Sfakianakis, chief economist at SABB (Saudi British Bank), said: “There is an argument that supports the usage of coins as it could act as a preventive measure of rounding up prices. However, the proper usage of coins in support of consumers has to be kept in mind. Certainly, the usage of coins with very small denominations have decommissioned like in the case of Australia and New Zealand which removed their one and two cent coins in the early 1990s.”
He added, “In the case of Finland and the Netherlands, which use the euro, they don’t use the two lowest value coins. The fear that businesses would round up their prices which would lead to general inflation is an issue that should involve policymakers and consumers alike. The use or the disuse of coins should consider the benefits the consumer should ultimately reap.”
According to the latest Saudi Arabian Monetary Agency (SAMA) statistics, coins issued by SAMA have increased slowly from 2002 to 2007. In 2002, coins worth SR201 million were in circulation and SR13 million were in banking department. In 2003, SR206 million, in 2004, SR211 million and in 2007, SR224 million coins were in circulation. In 2008, the number of coins issued has increased steadily from SR225 million in January to SR231 million by the end of October. However, coins in the banking department decreased to SR8 million in 2007 from SR13 million in 2002. In 2008 also, coins in the banks declined to SR7 million in October from SR8 million from January.
