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Local Currency
Funny money to encourage people to shop at small local businesses. | |
G'day Mates
This is my first ever idea post...take it easy ;o)
I run a small business Down Under in Australia and I am working on a local currency for my home town. I have seen a number of these ideas online in the States and UK and was wondering what people thought of the idea or whether they have
used the currency.
It goes something like this...
Currency is printed using local landmarks/people etc. Anti counterfeiting measures included. Money is given a name, lets use the Down Under Dollar (DUD). Notes are $1, $2, $5, $10, $20, $50.
People get their notes from participating banks - $10 (DUD) to cost $9. Effectively a 10% discount. Shoppers can only spend duds at participating local businesses.
Shops accept the duds and real cash. Shoppers can cash duds at local banks $10 duds = $9 cash, lose 10%. However they can spend them at other local businesses with any loss.
There is some inconvenience to shopper to bother buying duds but with plenty of promotion about supporting the local community the whole thing gains momentum over time as more people get involved - shoppers and shops.
Looking for further ideas to add benefits for all concerned.
Transfer cash via SMS
http://www.guardian.../0,,2037930,00.html
In Kenya and Philippines [imaginality, Jun 23 2007]
Berkshares
http://www.berkshar...g/localcurrency.htm
[wagster, Jun 23 2007]
Local currency used in Devon, England
http://news.bbc.co....d/devon/6230474.stm
The crazy people of Totnes, Devon, are doing just this. [Jinbish, Jun 24 2007]
They'd love it
http://www.bbc.co.u...leme_66602120.shtml
in Royston Vasey [pertinax, Jun 24 2007]
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Annotation:
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Only if UnaBubba's picture is on it. |
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two problems I can think of: the tax man and the local currency essentially becoming a 'mates rates' for locals (thus ostricising outsiders). |
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[Ian], re. your idea about transferrable cellphone credit, something similarish is now being done somewhere in Africa - I'll look for a link. |
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This exact idea is currently being used in Berkshire, US (link). It is having some success, locally. |
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Hello, [scratchy], there is a town in the UK that is apparently trying this out. I guess I sympathise with the concept, but I still think it's mad. |
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It sounds like a loyalty scheme, but based on a locality rather than a corporate brand. They'd love it in Royston Vasey. |
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The US has laws against anyone issuing non-federal currency, I think. But a personal check is really a form of personally-issued currency, isn't it? So this idea could be made to happen . . .. |
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Set up a local agency and give it a checking account. Have it write a whole bunch of checks payable to bearer. Use a different check background for each dollar amount. Laminate the checks, or use waterproof ink. |
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As a newbie to this, how do I add another comment...try this annotation thingy! |
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Thanks for the input.
I was aware of the BerkShares and thought it was a good idea.
As far as I am aware it is legal in the US. Disney also uses the Disney Dollar.
Uswing it as a loyalty scheme is precisely my intention. In particular for locally owned busiensses to get an edge over the multinational stores. |
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it's called a coupon or food stamp. |
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Money is a promisory note, like an IOU. It used to (might still) say "I promise to pay the bearer on demand" on English banknotes. |
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What you are proposing is basically gift vouchers, but for a town rather than a highstreet chain or mall. |
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I've experienced custom currency at a resort in Morroco and at the Ironbridge & Black Country museums (period currency) |
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And Disney Land. Although that might be a lie, I've not been. |
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There have been several communities doing this for over twenty years. The first one I ever heard of fixed the value of an hour's labor at the equivalent of US$10, and the community adopted it enthusiastically. The money is freely exchangeable with US currency. Some people take their entire paycheck in "Hours." If nothing else, it guarantees the money stays in the community. |
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[bacon], actually, the law specifically addresses non-federal currency. Local currency is perfectly legal, but it has to be a different size and appearance from federal currency. |
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All the tips and comments are great.
As a shopper, what do you think would encourage you to use the notes regularly?
As a local business owner, what would encourage you to accept the local currency? |
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I predict that the normal price of DUD-affected items will rise mysteriously by about 10% if DUDs are adopted. |
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i wanna go to australia. if i do, ill make sure to use your money! |
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Definitely Baked and OverBaked: what you're talking about are "gift certificates," coupons redeemable at a limited number of places. "Gift cards" are cheaper to manufacture, far more flexible and practical, especially the "rechargeable" kinds. You could make it a "regional" card, accepted by a limited number of participating businesses. |
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This idea isn't like those 'stripper dollars' you can get in certain establishments, you know the ones that you put in the ladies garter belt.
Not that I've ever actually experienced this personally you understand but I've just heard . . . |
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As a consumer, I would use these mostly if they were widely accepted over a reasonable area, if there was a sufficient number to easily access them, and if the denominations were easier to tell apart than with regular money. These dollars might also have sentimental value, and the artistry behind the bill would likely influence the acceptance. |
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Of especial note to YOU as a manufacturer is the sentimental value. In a high-tourist area, some people might take them as gifts to friends, collectors items, etc. Assuming that you are sane, and production costs are less than face value, this will ammount to a net gain for the distributors. |
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As a vendor, I would likely use them if the cash registers could readily accept them, and if a sizeable number of people used them. Assuming the discount exists, vendors might also reasonably expect some portion of the net gains provided by collectors. |
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Based on these theories, which may or may not be accurate, I would recommend setting up shop in a large mall at a major tourist trap near a readily identifiable landmark. Once you get most of the vendors there onboard, you should be able to reasonably expand from there. |
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The thing with 'local' currencies - and indeed, national ones, is the opportunity for arbitrageurs to sit on the border and exploit differences between in and out-currency markets. |
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That's not necessarily a bad thing, but many a currency has been driven mercilessly south by relatively small groups of people profiting from differences in money supply. |
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Take Turkey for example, during the 90s and early 00s, the already worrying inflation of the lira was taken advantage of by people wanting to pay themselves tax-free bonuses. The trick was to take a massive loan out in lira, over a fixed period (say 6 or 12 months), tax-free (because it was a 'loan'), convert it into a more stable currency, only paying it off at the end of the period - the idea being that the currency had devalued so much by then, that the original sum of money (and any associated interest) would only be a fraction of the original loan. |
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This practice, among others, drove the currency even further into hyperinflation (which encouraged even madder trading schemes) - my point being that if you do create a currency, you need to control who has access to it, or before long, it will get taken advantage of. Take casinos for example, each casino effectively operates a miniature currency - but great care is taken as to how that currency can be traded, and who is authorised to trade it. The relative freedom of a national currency is entirely different from the far more regimented transactions allowed on the casino floor. For example, it might be conceivable to offer hedging bets from the side of a roulette, or blackjack table, after the official dealer has finished taking their bets - but the likelihood is that you'd soon be kicked out. |
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This is basically LETS - Local Exchange Trading System. I helped establish one of these in the early 'nineties. It collapsed due to a greedy pig farm. So, it's baked in other words. Maybe you could find a local one, or start one. |
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Yep, we loads of local currencies in the UK, so it's not that novel. |
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I used to have some of the dead money you can get from a Chinese supermarket..you burn it for your ancestors..looks like a greenback and great to drop in the street and watch people picking it up. |
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But, not to be used as a tip in a Chinese restaurant, even for a joke. My slightly thick mate did that and they pointed it's kind of triad warning stuff. They were not amused. |
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If it gets folks to shop locally, I'm all for it. I wish my little town would do this as too many people shop in the bigger malls outside of town and the discount stores at Christmas time. |
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Oh yes, you have to be very careful with hell money. It's easy to think of them as toy money, but they're something else entirely. We used some in the Chinese New Year celebration and it took a while to work out how to deal with them appropriately. |
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