CNA Commentary — Does paying with 5-cent coins make sense anymore?
For the value they represent, 5-cent coins are heavy and bulky. (Photo: OKJ)
SINGAPORE: If you had a single 5-cent coin in your wallet, how long do you think it will take before it leaves your possession?
For me, it took about four months, which is not surprising considering my steady transition toward cashless payments since the pandemic started.
I hardly pay with cash and if I do, usually around my neighbourhood - almost nothing ends in a 5-cent denomination.
In one particularly memorable instance this year, I received eight 5-cent coins in change after buying a snack. I was shocked and wondered why the shopkeeper didn’t dispense the more convenient denominations of 10- and 20-cents. Still, it was legal tender and there was no reason to raise a fuss.
So, I did the next best thing I could think of. I headed over to my regular coffee shop, bought my usual cup of teh c kosong, and offloaded the coins to the cashier who accepted it with the same look I gave when I first received the coins – surprise followed by reluctant acceptance.
FRUSTRATING TO HOLD ONTO 5-CENT COINS
Others were not so lucky. Earlier in December, a man was rejected for using 5-cent coins at a coffee shop because they had a policy of not accepting more than five 5-cent coins in one transaction. This led to a dispute. He spat on two people who worked at the coffee shop and was fined by authorities subsequently.
While there is nothing that can justify the man’s action, the frustration that both he and the cashier felt over the use of 5-cent coins is common amongst many.
Now, the Monetary Authority of Singapore (MAS) has clarified in response to queries by CNA in December that businesses have the discretion to decide how they wish to receive payments but must provide a written notice of this before people make purchases.
Otherwise, members of the public can file a complaint with MAS giving them the name and location of the shop, the date and time of visit and how many pieces of 5-cent coins were used.
A file photo showing the Monetary Authority of Singapore building. (Photo: AFP)
It has no plans yet to take 5-cent coins out of circulation even though MAS had stopped issuing the 1-cent coin in 2002 after it determined that the denomination was not actively used by the public.
USEFUL IN FEW OUTLETS
Are 5-cent coins still practical these days?
To find out, I went down to my neighbourhood of Bendemeer and exchanged S$50 worth of 5-cent coins with hawkers and store owners. I spoke with them to make sense of the perceived value of the tiny brass-plated coin.
I acquired 1,000 5-cent coins in total: 200 from a value shop, 330 from a drinks store, 400 from a yong tau fu stall, 10 from a herbal soup stall and 60 from a chicken rice stall.
Other stores I visited had little to no 5-cent coins to offer me. Not only do the vendors see fewer of such coins with each passing day – but the few that they do have are consolidated at home rather than in the cash register.
This seems sensible since none of their items are priced at 5-cent denominations. So, the need to give change with 5-cent coins is only in lieu of other denominations and only if that supply was from previous customers of the day.
As for others who had plenty of such coins on hand, they share one of two traits.
First, outlets selling items ending with 5-cent denominations, like the value shops and supermarkets, are an obvious avenue for such coins. Even then, the cashier who exchanged their S$10 worth of 5-cent coins took a few weeks to gather them.
Second, stores that sell cheaper items also seem to be more likely to receive payment with 5-cent coins. This is why drink stores attract more 5-cent coins despite their prices never being in that denomination.
However, virtually everyone I spoke to about this topic shared a common perception of this humble coin – that while it is still money, it may be too troublesome for what it is worth.
TROUBLESOME AND COSTLY TO KEEP OR USE
With 1,000 5-cent coins newly in my possession, I now know why we naturally shun them.
For the value they represent, they are heavy and bulky. They also take a much longer time to count compared to other denominations, slowing down the end-of-day bookkeeping.
And when it is time to cash in, it is not as straightforward. Depositing 5-cent coins in banks incurs a fee which removes about 30 per cent of every coin’s value. That is quite a hefty “tax”.
Spending them would not be a better alternative. This would likely happen at a snail’s pace. Based on my conversions and observations, it seems that it is largely socially acceptable to use 5-cent coins in batches of two or four; anything beyond that and you may be seen to be passing the buck of holding those coins.
1,000 5-cent coins. (Photo: OKJ)
Yet despite these obstacles, there is a general consensus that the use of 5-cent coins have become rarer, especially over the past two years.
5-CENTS AND TECHNOLOGY
Some of the hawkers advised me to use these coins at supermarket self-checkout kiosks. Other than cutting down service time and easing manpower constraints, these machines have unintentionally become a way for shoppers to get rid of coins.
In fact, the kiosks can accept coins of any denomination beyond the legal tender limits of 20 coins per denomination that was set in 2019.
Though it will likely reject coins beyond what it is capable of holding at any one time, it beats footing the fee of the banks.
But the writing is on the wall for the humble coin especially when Singapore is the increasing adoption of digital payments.
These past two years saw consistent efforts to get hawkers and shop owners in the heartlands on board this vision of a potentially cashless future. Most recently, the CDC vouchers were also distributed digitally to further push this change.
While I cannot argue with the convenience of a cashless society, I understand the feeling of wanting to pay my hawker with cash rather than with the flash of my phone. I prefer to pay for S$1.10 for my teh c kosong in coins rather than through a QR code.
Perhaps I am stubborn, but it feels more personal to me. And if I am paying with legal tender, why should its form be of any concern? Anyone who pays with 5-cents probably feels the same.
But these instances are becoming fewer, and like the 1-cent denomination before it, a time will come where 5-cent coins may no longer be relevant.
MY FINAL 5-CENTS WORTH
In 2002 when the 1-cent coin stopped being issued, Yeo Guat Kwang of what was the Consumers Association of Singapore had said “consumers find it inconvenient to handle 1-cent coins”. He urged business to round off the odd cents to the benefit of consumers.
Similarly, some may suggest rounding off one’s pricing to eliminate the need for 5-cent coins. But in the age of digital payments, this may not be relevant.
The denominations of coins and cash were minted for the convenience of transactions – but with more people opting for cashless payments, businesses can be more flexible in pricing without sacrificing convenience.
Our groceries are a prime example of pricing that ends in odd denominations of single cents. Only when opting for cash payment would it be rounded off.
With an impending GST hike from 7 per cent to 9 per cent, there will be a recalibration in pricing. Business may feel more inclined to price their items more variedly as the convenience of a cashless society goes both ways.
In the meantime, I will deposit most of my 1,000 5-cent coins in one of the four Coin Deposit Services operated by Certis CISCO, the MAS appointed circulation coins operator and manager, which accepts 5-cent deposits for free.
I will hold on to a few and add them to my family stash of 5-cent coins collected for our annual Chinese New Year activity of making wishes by throwing coins into the Liang Shan Shuang Lin Monastery wishing well.
