The switch to 12-sided coins has been sold in the Budget as a way to cut out the 3% of counterfeit coinage.
If that figure is correct, it will certainly have been costing independent shops more than their chain counterparts as they handle more cash as opposed to cards per transaction and they are less well equipped to filter out the duds. But the story goes beyond that and it includes the new polymer fivers as well. The Bank of England announced the decision to move from paper to polymer notes in December 2013, but admits that it has not even conducted a cost-benefit analysis for the wider economy.
Research by CMS Payments Intelligence (CMSpi) supported by the British Independent Retailers Association (bira) shows that while it is estimated that the switch to polymer banknotes will save the Bank of England more than £100m across a ten-year period following the introduction of the plastic notes into circulation from 2016, CMSpi calculates that the change will negatively impact hundreds of thousands of small businesses and cost an estimated £200m+ to implement. Retailers across the UK who have invested in cash counting equipment, in-store ATMs and counterfeit validation devices will have to stump up the money for system upgrades, equipment replacement/recalibration and engineer call-out fees.
This is a process that is likely to cost small and medium-sized businesses hundreds, if not thousands, of pounds each.
Brendan Doyle, CEO of CMS Payments Intelligence, said: “There has been no debate whatsoever on this whimsical and pointless decision. The decision-making process has been fundamentally flawed resulting in an initiative that will cause fundamental disruption to the retail sector and result in big profits for many large businesses – as ever, all paid for by hundreds of thousands of small retailers up and down the country.”
Robert Jarrett, professional services and special projects director at bira, said: “We find it disappointing, but not surprising, that small and independent retailers will be the ultimate victims of this decision and we support the call for an independent review. Many of our members are operating on very thin margins and the costs associated with the changeover pose huge operational and financial risks that small retailers are simply not in a position to deal with.”