By Humphrey Makuyana
1. Introduction
In many developing economies, including Zimbabwe, the persistent unavailability of small denominations (e.g., coins or small notes) during retail transactions has created a silent but significant economic and ethical issue. Consumers are routinely short-changed under the guise of “no change available,” leading to cumulative losses across millions of transactions. These unaccounted-for gains enrich retailers unjustly and result in under-declaration of sales for taxation purposes, thus affecting national revenue collection.
2. Nature and Forms of the Problem
A. Common Practices by Retailers:
Retaining balance without issuing it (e.g., if change is ZWL0.50 or USD0.10).
Offering sweets, airtime, pens, or tokens in lieu of coins.
Encouraging customers to “forgo the change” voluntarily.
Rounding off prices or final amounts upward.
B. Lack of Accountability:
These micro-amounts are often not receipted or recorded.
Sales registers are adjusted to reflect amounts tendered, not the actual value of goods sold.
3. Quantifying the Consumer Losses
Assumptions for Estimation in a Mid-sized Economy (e.g., Zimbabwe):
Number of retail transactions per day: 2 million
Average unreturned change per transaction: USD0.05
Total daily consumer loss: 2,000,000 x 0.05 = USD100,000
Monthly consumer loss: 30 x 100,000 = USD3 million
Annual consumer loss: 12 x 3 million = USD36 million
This shows that millions of dollars go unaccounted for, enriching retailers disproportionately and unfairly.
4. Unremitted Sales Taxes and Public Revenue Loss
Mechanism of Tax Evasion:
If a customer is charged USD1.00 for an item that costs USD0.95 (but is told there’s no change), the extra USD0.05 is often not declared as part of sales.
This reduces the VAT/Sales Tax base.
Example:
If 20% VAT is applicable, undeclared revenue of USD36 million results in:
USD7.2 million in lost tax revenue annually.
5. Ethical and Legal Implications
Consumer rights abuse: Consumers are not receiving fair value for their money.
Unethical enrichment: Retailers benefit from cumulative illegal gains.
Distortion of competition: Law-abiding retailers who avoid this practice may face unfair competition.
Loss of trust: Erodes public trust in commerce and taxation systems.
6. Possible Policy and Practical Solutions
A. Regulatory Measures
Enforce mandatory rounding-off laws (to nearest 0.05 or 0.10) — either upward or downward — to ensure fairness.
Retailers must declare all change-retention practices and reflect them on receipts.
B. Digital Solutions
Promote mobile money, debit card, and digital wallets for exact billing.
Retailers should allow for balance credits in loyalty accounts or mobile wallets.
C. Currency Management
Central banks should ensure availability of coins and small notes.
Incentivize return and re-circulation of coins (e.g., through banks or retail coin buy-back programs).
D. Consumer Education and Empowerment
Encourage customers to demand full value.
Establish hotlines or digital platforms for reporting abuse.
E. Tax Administration Enhancement
Tax authorities should use retail transaction audits to detect rounding abuse.
Introduce electronic fiscal devices (EFDs) that automatically capture every transaction detail.
7. Conclusion
The unavailability of small change in retail transactions represents more than an inconvenience — it is a systemic issue with economic, ethical, and fiscal implications. Retailers benefit unjustly, the state loses tax revenue, and consumers suffer silent but real financial erosion. Governments, central banks, retailers, and consumers must work together to address this seemingly minor issue that aggregates into a major national problem.