Retailers ripping off consumersIT boggles the mind to hear that retailers are refusing to take up coins imported by banks to alleviate the critical shortage of change in the economy because of the exchange rate issue.
The retailers want the Government to first fix a coins exchange rate of US$1 to R10, as they are not willing to buy the coins from banks at the prevailing market rate of US$1 to R6,90.
On October 15 it was reported that local banks were stuck with over R8 million worth of South African coins and that they may soon be forced to return them after retailers refused to buy them for use in their cash transactions.
Bankers Association of Zimbabwe president Mr John Mushayavanhu was quoted in the same report confirming this, adding that, “the banks don’t know what to do with the coins and are now looking at repatriating them back to South Africa”.
With the prevailing acute change crisis the country has endured since the introduction of the multi-currency system in 2009, surely the importation of coins by banks should be viewed as the solution to the change problem, particularly by the retail sector and the transacting public.
When the CBZ started advertising its coin stock this was greeted by public enthusiasm for it meant that the change problem was coming to end.
The general public, who bear the greatest brunt of the change shortage as they are forced to part with their money on things they would otherwise not have wanted to buy, had a reason to be excited by this development.
The misery of the change shortage is really more evident in commuter buses where commuters are always seen desperately asking for coin from fellow commuters to avoid ending up having to forgo their change. The situation is even more distressing when it involves an elderly commuter.
It was because of the change crisis that the Zimbabwe dollar’s life span stretched longer in the commuter transport service well after the introduction of the multi-currency system.
The resistance by retailers to buy the coins from the banks is, in the eyes of the public, motivated by greediness.
When the change crisis started after the introduction of the multi-currency system it caused real headaches for both the transacting public and the retail shops.
However, with the passage of time retailers were able to devise short-term strategies to mitigate the challenge and these measures included the use of the so called credit notes, tokens, and small value goods such as sweets.
Consumers accepted this arrangement begrudgingly as it always meant that they would always come out of the shop having bought other things they would not have budgeted for.
The apparent fact of the matter is that these improvised change-mitigating measures have become a source of income for retailers and as a result they are reluctant to let go of them.
The income retailers are realising through these forced purchases is quite significant, particularly for large retail shops, and the retailers know that a sudden loss of that income will have a knock on effect on their ability to meet company overheads particularly salaries.
They are aware that such a sudden change in their income levels will negatively affect their balance sheets.
By trying to court the Government to come up with a fixed exchange rate of US$1 to R10, retailers are either sneakily trying to arm-twist everyone along the way so that the situation remains favourable to them.
Alternatively they are merely attempting to buy time while they continue to reap from consumers’ ineptitude.
Why consumers remain silent on such issues that covertly invade their pockets really baffles the mind.
It does not make economic sense for a Government that is using other countries’ currencies to try and peg or fix an exchange rate for those currencies outside the currencies’ prevailing market rates.
If there is to be any Government intervention in this matter, it should be to simply compel the retail shops to immediately and unconditionally buy the coins stashed in banks in order to smoothen cash transactions in the economy rather than listen to the retailers’ baseless argument.
In Bulawayo, US dollar and South African rand transactions for both notes and coins are done without any hassles using the prevailing market rates for the two currencies, and the coins they use are SA rands which are readily available.
Their products are marked in both US$ and rand prices and the system has been working well for sometime now without causing any headaches.
For example, a product marked R5 will cost US$0,72 at the prevailing exchange rate, and with the coins being available there should not be any hassles in executing such a transaction. Retailers are merely trying to create a storm in a teacup, and this points to the fact that the regulatory authorities and consumer watchdogs such as the Consumer Council of Zimbabwe have not been doing enough to protect consumers from such flagrant violation of consumer rights.
Retailers are ripping off consumers and to cover up for this they are coming up with flimsy and unconvincing excuses to justify their insatiable and unsavoury greed.
The change scam exhibits dishonesty and disrespectfulness of consumers by retailers, and authorities should step in to bring sanity to this farce. The economy wants to use those coins stashed in banks, and want to use them now.
Bradwell Mhonderwa is the Managing Consultant of Business Ethics Centre, a Corporate Governance and Business Ethics Management firm.
Source:
The Herald
