When I was volunteering at Maya Pedal in Guatemala there was a sign on the wall that said “Que Caro Es Ser Pobre”. It means “How expensive it is to be poor.” As I travel through many of the world’s “poor” countries, I am writing a series of articles about how expensive it is to be poor. I don’t think many people in “rich” countries understand how difficult it is to climb out of poverty. I am all about positivity and I am having the time of my life right now. But I would be doing a disservice to the amazing people I’ve met if I didn’t share their story of what life is like dealing with poverty.
I briefly touched on this in my first Que Caro Es Ser Pobre article. Several countries later, encountering the problem many more times, I’ll expand on it a bit more and then finish with a story from Peru.
From The Vendor’s Point Of View
A vendor could be a big supermarket, a tiny shoe repair shop, someone selling gum or fruit on the street, etc. They come in all shapes and sizes.
Normally supermarkets have no problem making change. They may falsely accuse you of theft, but they’ll make change.
But anything smaller than a supermarket and change becomes an issue. In less affluent countries many things are very cheap. Thus, if you’re running a street stall in Honduras selling lunch for 19 Lempira/$1 and someone comes up with a 500 Lempira note, it’s beyond your capacity to issue 481 Lempira/$25 in change.
To put this in perspective, Honduras’s GDP per capita is $4350. Dividing that by 365 (street vendors generally work every day) and you get about $12. Seen another way, $25 is more than two days of income for this vendor. In places in such poverty, you don’t generally have so much cash on hand – savings in reality – to make change.
Plus, even if you did have change, what about your future customers who come with smaller bills? You won’t have enough cash on hand to issue them change. And then you’d a hard time spending this bill yourself.
So this brings up the interesting question for a vendor- how much is a transaction worth to me? If doing the transaction could result in more harm than good, in the form of lost sales in the future due to not having adequate change on hand, it may be more beneficial to pass on this transaction in favor of potential future ones.
This is a problem the “rich” world doesn’t have – partly because of the use of credit/debit cards and partly because change is always on-hand. In 22 years of living in the U.S. I never remember an incident where I paid for something and the vendor couldn’t provide change. In Qatar, however, there were not enough coins in circulation and the grocery store would usually offer a bag of peanuts for 0.25 Dirhams and candy for 0.50 Dirhams.
Anyway, any lost sale in developing countries negatively affects the vendor and, to some extent, propagates the poverty cycle.
Customer’s Point Of View
Customers, obviously, are aware of the difficulty with change. For the people here, it’s normal life. For me, it’s something I’ve had to adapt to.
Customers also do their best to have small change and bills on hand to make transactions go smoother.
And now, a story tying all of this together.
A Story Of Change From Peru
The day I went to the Sechin Ruins, I took a 50 Soles note, a 10 Soles note, and I had 1.20 Soles in coins. I found a motortaxi and negotiated with him to go to/from Sechin for 8 Soles. Nice. I figured I’d use the 10 Soles note for that.When I got to Sechin, I realized the entrance fee was 5 Soles. I didn’t want to use the 10 Sol note because I knew the motortaxi driver wouldn’t have change for a 50. So I offered my 50 Sol note and the guy essentially said “Son of a biscuit” or in Spanish “Hijo de puchica.” He didn’t have change. He told me to enter and then come back after I saw the ruins and he’d offer my change then. So I entered without paying.
I saw the ruins. Nice.
I went back to pay. The guy apologized saying he didn’t find change. I said I was sorry as well. He said it was their fault and there was no reason I should feel sorry. I gave him the 1.20 Soles I had in change and thanked him.
Then I took the motortaxi back to the city. I knew something would go wrong. Just a feeling in my stomach. When we got back, I gave the guy my 10 Sol note and told him to keep the change. He said “What do you mean? It costs 13. 5 for the ride to and from Sechin and 8 for waiting.” This was not what I understood, obviously.
So we argued a bit, but I had a weapon in my pocket. I only had a 50 Sol and I knew he wouldn’t have change for that. So I pulled that out and asked if he had change. He said no and the argument was essentially over. He took the 10 Soles and left.
If you’re keeping score, I saved 3.80 Soles at the ruins, and 3 Soles with the motortaxi, though calling the motortaxi case savings is a bit of a stretch since I genuinely understood the price was 8 from the start.
But then my next problem. I only had 50 Soles and my next purchase would be the following morning – a 1 Sol motortaxi ride to catch my bus to Huaraz. I had to break my 50 Sol bill. But I didn’t need anything. So I went to a small store and asked for a 1 Sol packet of instant coffee.
The guy got it for me and I gave him the 50 Sol note. He grunted and said “such a big bill for such a small purchase…” We hadn’t spoken much until then, but he heard my accent nevertheless. He asked me if I was a foreigner and I said yes. He said “Ok, since you’re a foreigner I’ll forgive you for this.” He obviously wasn’t happy.
As he dug around for change I jokingly asked him “But isn’t it a pleasure to serve your clients?” He just laughed.
And that’s where I got the idea for this article. To him, it was probably a better value not to give out 49 Soles in change to earn, perhaps, 0.20 Soles in profit.
There are no easy answers nor solutions here. Just a fact of life throughout the developing world. I guess it’s kind of nice that both vendors and customers try to work together on this, but in the end a customer can go from store to store until he or she finds someone willing to accept a big bill. Vendors, ultimately, lose and “pay the price.”