Category Archives: Money

Coupons

Save $3 when you spend $5... magic.

Save $3 when you spend $5… magic.

Americans love to save. And what better way to save than to spend? Using coupons of course! I am in the process of moving into a new apartment (yes, you will see me at IKEA this weekend) and, as part of that move, I signed up for the USPS mail forwarding service.

I was very impressed that USPS (a) gave me the option to register online for my mail forwarding, (b) offered me the service for free, and (c) as an added bonus, emailed me a “mover’s welcome pack” of coupons to moving-relevant retailers such as Target, Pier 1, Verizon, and Budget rental. Sweet.

I giddily printed them all out, satisfyingly cut them along the dotted lines like a kid in arts and craft class, and proudly tucked them into the file-folder compartment of my wallet. It reminded me of my childhood, when I used to accompany my mother to the grocery store (good old “Super Stop & Shop”). She would inevitably have a chunk of coupons culled from that weeks’ flyer sheets, which always came nestled in the newspaper (that was also back in the day when we used to get a lot more post).

Nowadays of course most coupons don’t even require printing my CVS coupons are sent automatically to my CVS card, and most coupons are read directly from your smart phone. But Americans still love coupons as much as always. Coupons were invented in the US in the late 19th century (first pioneered by the Coca-Cola company) and 48% of American consumers today use coupons (a higher figure as compared to other countries in the survey).

So, let’s get spending! I mean, saving.

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Chipless and pinless

Magical microprocessor.

Magical microchip.

I’ve been making a lot of purchases with my debit card lately. Because, as I quickly realized upon returning to the US, nobody pays with cash anymore (although checks seem to stubbornly persist).

Sure, paying with your debit card can make life easier because you’re not required to carry cash around with you all the time. But, what’s with all this signing of receipts? In the US, when you pay for something with your debit or credit card, you often have to put pen to paper and sign to authorize the payment.

That’s not the way it’s done in the rest of the world. In fact, it’s a totally outdated technology. The US is the last major market to use the old fashioned swipe and signature system. In the UK, France, the Netherlands, and all the other European countries I’ve been to, debit cards use a so-called “chip and pin” system, also known as EMV cards (Europay, MasterCard, and Visa) or “smart cards.”

They’re smart because they have microchips embedded in the card which authenticate your identity in conjunction with your personal identification number (PIN). The microchip just looks like a small silver or gold square on the front of the card. But it makes life so much easier. Rather than swiping your magnetic stripe card and then signing a printed receipt to prove you’re you (or some fraudster forging your signature), you just insert your SMART card into the card reader and then enter your PIN into the payment device. Voila, payment complete! No paper, no signing. Ta-da.

In Europe, all merchants have the equipment to process chip and pin payments. At supermarkets, it’s usually a device fixed in place at the checkout counter. At restaurants, it’s a handheld device that the waiter or waitress brings to your table to stick your card into and hand to you for PIN entry. In recent years in Europe, this has been further evolving into contactless payments, where you just tap the card against the reader without even entering your PIN (this is usually limited to smaller payments).

And here we are state-side, writing checks and signing receipts… and I have a chip on my shoulder about it. (Yes, pun intended.)

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Dull money

And you thought money was green.

Once upon a time, I thought money was green.

When I was growing up in the US, all dollar bills were green. That’s just the way money was – it was green. Everyone knows that. Hence the name “greenbacks.”

Well, not so in the rest of the world. When I moved to Canada at 18, one of the first things I noticed was the technicolor currency – the bills were red, blue, green, purple, and gold. They looked like monopoly money to me. When I moved to Europe at 20, and started to visit more countries (these were the days before the widespread use of the Euro), I learned that most national currencies are as colorful as a pack of crayons. The dull dollar is the odd one out.

But, it seems like the Federal Reserve has gotten a bit more artistic since 1999. Starting in 2003, the “new” $20 bill subtly introduced background colors and represented the first time in modern American history that US bills incorporated colors other than black and green. Soon after, the US government also redesigned the $50, $10, $5, and now $100 bills to add color.

Apparently the last time US paper money was printed with background color was in 1905, when the so-called $20 Gold Certificate flashed a gold tint and red seal… now isn’t that baller?

 

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Plus tax

I have exact change for you and Uncle Sam.

I have exact change for you and Uncle Sam.

Immediately after arriving in the US, as I was transiting from LAX airport to San Diego, I excitedly spotted an Auntie Anne’s Pretzels in the Los Angeles train station. I hadn’t eaten one of those salty buttery bundles of joy in years, so I made an abrupt beeline for the kiosk.

Since I hadn’t yet made it to an ATM yet, the only currency I had on me was the random collection of coins that I had transferred from my drawer to my money purse before heading state-side. It was like a pecuniary vestige of every country I had visited in the past two to three years: euros mingled with pounds, West African CFA francs clinking alongside Ghanaian cedis, and one Swiss five-franc coin standing on its own and giving you finger, silently saying “I’m a coin, but I’m actually worth $5.60, so you really should have bought yourself an overpriced coffee at the Geneva airport before you left, you idiot.”

And floating in among all that global currency were some good old American quarters, dimes, and nickels, which had evidently survived in those 2.5 years since my last visit to the US.  So I set about counting my coins, like the old lady that I secretly am, and found that I had a grand total of $3.51.  A pretzel cost $2.99. Perfect. I counted out the exact change as I waited in line to order my pretzel.

But when the sales clerk rang me up, she said “That’ll be $3.26, ma’am.”

Wait, what?

D’oh. I had completely and totally forgotten about the tax. And if there is one place you are going to notice the tax, its California: the golden state has one of the highest rates of sales tax in the whole country. In Los Angeles, the combined state and district sales tax rate adds up to 9%. Ouch.

The reason I had forgotten about the tax was because in most most other countries, sales tax is already included in the ticket price of the item. In the UK, for example, the Value Added Tax (VAT) is a 20% consumption tax similar to US state sales taxes. Unlike the US, however, all published retail prices include VAT. So, if an item has a price tag of £1.64, then you will pay exactly £1.64 at the till. The item in fact costs £1.37, and is taxed at a rate of 20% (£0.27), making for a total of £1.64. But you don’t see any of this, because the retailers have already factored it into their price lists and price tags. Now isn’t that convenient?!

I presume that the reason this sensible practice is not adopted in the United States is because it is a federation, where each state sets its own levels of sales tax, varying from 0% in Delaware to 7.5% in California (plus, there are also county and city level taxes levied on top of this). Since many large retail chains in the US span across multiple states and counties, it would be a logistical nightmare for them to produce hundreds of variations of price tags to stick on the same item in different counties and states; it’s more practical to just label items at their before-tax prices, and then calculate the additional tax at the register depending on location.

And if customers are expecting this, then that’s okay. But clueless foreigners, or equally clueless repatriates, may find themselves digging into their change purse to make up for the extra tax. Thank God I had just enough to buy that pretzel. Otherwise I would have been so disappointed that I might have joined the legions of beggars in Union Station to rustle up the extra $0.27.

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Cards, not cash

Buying Guinean francs in Conakry to settle a hotel bill.

Buying Guinean francs in Conakry to settle a hotel bill. No plastic here.

I’ve only been back in the US for one month, and already I’ve been forced to upgrade to a larger and fancier wallet. In Africa, I didn’t even carry a wallet; I just kept my money (bills and coins alike) in a small money purse which could easily fit in my pocket (or even bra, if I was wearing a dress that had no pockets). It was a simple square sewn from African fabric with a zipper on one side.

I’m talking about it in the past tense, but I still have it. It’s just been relegated to my sock drawer, since there’s no way it could cut it here in America. I mean, I was loyal to my African money purse and I stuck with it at the beginning of my stay here in the US, but I very quickly outgrew it – or overfilled it, to be precise – as the number of cards that I had to carry mushroomed.

First it was only my debit card that I carried around. Even this took some getting used to, since in Liberia I didn’t carry any cards with me, it being an entirely cash-based economy (at the time I left, there were two establishments in the entire country that accepted payment by card, both of them expensive hotels). I paid for everything with cash all the time, no matter how big or small the payment. I paid my rent in cash each month, given to the landlord in a fat envelope. If I booked a flight to another African country, I paid for the plane tickets in cash at the travel agent’s cashier desk. I became proficient at counting out tatty, old series American hundred dollar bills like some sort of gangster.

Now, suddenly, in the USA I could pay for anything and everything with my debit card. Everyone ahead of me in the line certainly was, no matter how small the purchase, and no matter how much easier and faster it would be to just buy your $2.50 coffee with three one-dollar bills, rather than having to swipe your card, punch in your PIN code, and wait for the machine to print a receipt.   But, apparently in the 13 years that I’ve been gone from the US, cash has become an anachronism. Who carries that green stuff anymore? That’s so 1990s.

If it was only for the debit card, I could manage to fit that in my African money purse. And of course there’s my driver’s license, which I carry as identification. But with each day that passes, my plastic is proliferating. Every single store I go into seems to offer me a new card, be it a “rewards” card, a store credit card, or both. I bought a laptop, and I got a “My Best Buy” card; I needed shampoo, and I ended up with a “Walgreen’s Balance Rewards” card; I ate a bagel for lunch, and it came with a “My Panera Member” card; I stopped in the corner shop near my apartment to buy a bottle of wine, and I acquired a “Buy 10 bottles of wine, get 1 free” card (well, that last one might come in handy).

By the end of the week (yes, I acquired all these cards in little over one week), I realized it had to stop. At Old Navy, I insisted to the sales clerk (after two attempts on his part to convince me otherwise) that yes, I’d really rather pay in cash today, instead of signing up for an Old Navy credit and paying nothing today. “But, ma’am, you’ll also receive a 10% discount on your purchase.” The problem is, you see, I’ve just had to buy a new wallet to store all my new cards, and I’m running out of slots to put them in. And I assure you these pieces of paper in my hand are actually legal tender. So, please take them.

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