Many years ago, back before the EU and the Euro and the whole globalization thing, I was tootling around in Europe. In my admittedly hazy recollection, French francs were 6 to the dollar, German marks were 2 to the dollar, and Italian lire were something like 1,000 to the dollar.
In the decades after WWII, Italy had some serious money problems: bills with so many zeros they make your eyes swim. And small change? It was just too crazy. The smallest bill was 500 lira. 5 lira coins and 10 lira coins, valued at less than a penny, were hardly worth the trouble, but many kinds of purchases ended up with these small amounts in play. The mint couldn’t keep enough coins in circulation to meet the need for small shops. So most of the time, when you went to buy groceries or a pack of kleenex or a newspaper, you’d pay with a bill and get your change in, well, stuff. I got bandaids once, and a pencil another time. But the most popular alternative was candy.
This seemed quaint and charming to me at the time, a happy traveler just passing through. But there were problems. Because it turns out that although the shop can give you candy as change, they are unlikely to accept candy as credit toward the purchase of something else. Modern economies depend on MONEY as a single currency of exchange in every direction. Candy just doesn’t do.
Well, Italy solved its problem when everybody joined the Union and the Euro took the place of their desperate currency in 2002. But it turns out that the candy money problem pops up in other places as well.
For example: in Indonesia, a recent study revealed that 10 percent of the country’s retailers are giving change in candy. This has evidently been a long standing problem. In July, the retailers association agreed to stop doing the candy thing, and use only coins. The government promised to make more coins so no one would have the excuse of coin shortage. But still, the candy rules the cash register. The shop keepers claim they are charged a 1 percent premium by the banks for stocking change, so they prefer using candy.
Consumer advocates advise paying with the exact amount to avoid the candy change trap. No representatives of candy-lovers were interviewed as part of the study, but I suspect at least one group of consumers has been happy with the current arrangement: the kids sent to the store to pick up some items for Mama need make no excuses when they come home with a fist full of candy sticks on the side.
Read the story: Irvan Tisnabuti, “Many ‘Naughty’ Indonesian Retailers Still Make Change in Candy” Jakarta Globe Sept 12, 2010 You can read a description of the Italian problem in a Life Magazine article from 1971, “The Licorice Lira Problem” and more in “Numismatics on the Autostrada” in Texas Monthly, 1975.