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Business

Dutch Say No Cents Makes Good Sense

Across the euro zone, consumers and retailers are debating the merits of abolishing one and two cent coins. In the Netherlands, a pilot project without small change has proved so popular, it could soon go national.

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The abolition of one and two cent coins is favored by many

It is a topic of debate which is gathering pace across the euro zone. In Germany, retailers are loath to do it, while those in Finland have already gone through with it. In the Netherlands, the public seems split. So, should the countries that use the single currency drop the small, copper coins that weigh down millions of consumer pockets?

Traders across Europe are torn by the idea of ridding the single currency of the one and two cent coins that make up the lowest end of the euro range, an idea favored by many consumers and banks. Some retailers, particularly those in Germany, fear psychological effects on their customers when they see prices they have long come to expect rounded up to even numbers, a consequence of taking away coins that would allow the apparently cheaper price of €1.99 rather than the scarily inflated €2.00.

Many banks would be happy to see the back of the tiny coins, making practices smoother and abolishing what many consider unnecessary banking costs. In Finland, their abolition is underway. On the whole, consumers there would be glad to see the almost parasitic small change eradicated, saving their homes and pockets free from multiplying piles of metal.

Customers hold little worth in coins

1 Cent Münze

In the Netherlands, the discussion is turning into a burning topic, as the government considers the abolition of one and two cent pieces. For Albert Heijn, the branch manager of the Bart Bartels supermarket in Woerden, there is little reason to keep the mini coins.

"We sometimes have one and two cent coins thrown on the ground here and not a single customer has bent down afterwards to pick them up. That shows how much worth people attach to them," Heijn told Deutsche Welle.

Over 130 businesses in Woerden have started rounding-up prices since the end of April. For those who fear price increases, even by just two cents, the system in the provincial town has been based on a compromise. A bottle of cabernet sauvignon now costs €4.45 rather than €4.47, while a packet of biscuits will set the customer back €2.00 rather than €1.98. Though in some cases, the customer loses out, in others the customer wins. The same goes for the businesses.

Ruud Noonen, a branch manager for a chain of fashion discount stores, looks at the advantages and disadvantages in a philosophical way and reveals that not dealing with the tiny coins is offset by only a minimal loss. "We count it up every day. And really, the profit or loss for us is around 24 cents either way. The difference it makes is negligible," Noonen said

Overwhelming support for pilot scheme

The pilot project covers businesses from the smallest kiosk to the largest department store and the results so far show that customers are overwhelmingly in favor of abolishing the one and two cent coins. In fact, 83 percent of consumers polled have greeted the possible demise of the copper curse with glee.

"It's a great idea," said one customer shopping at Bartels. "In my opinion, the small euro cents can gladly be abolished. Apart from getting in the way, consider how much time and work goes down the drain, fiddling around with the cents. Without these coins, everything would be much easier."

Advantages will be seen quickly, say advocates

The test period in Woerden has been so successful that the Dutch Retail Trade Federation has called on all its members to try out the model. Now, 40,000 businesses across the Netherlands are rounding up and down and gradually phasing out the one and two cent coins. By September, it may end up as a nationwide experiment. Ruud Noomen was confident that the consumers will see the advantages very quickly.

Euros mit Nickel

"We expect the customers in the cashier queue to see the effects first. Up to now, the customers have looked long and hard for the right coins because the one and two cent pieces are so difficult to separate. Without small change, the queues will move faster. And at the end of the day, counting up will be faster."

The Dutch National Bank estimates that if the project gets national approval, it will save €30 million ($36.6 million) annually. Not only will it make business more efficient, but charges on small change at banks will save both parties time and money.

However, not everyone will be happy to say goodbye to the coins. "To round up to one cent, I agree to that," said one old man shopping at Bartels. "But by two cents is too much. If we were to convert that back to guilders, that would be almost five cents."

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