Central Bank: Sufficient small coins circulating in UAE
Move comes as major supermarket chains confirm their rounding up or down policy
The Central Bank says the amount of coins circulating in the UAE is sufficient for the moment, despite complaints about small change and rounding up of prices after the introduction of VAT.
“The role of Central Bank of the UAE is to monitor cash use in the market and supply banks with the quantities of coins they require to address the needs of their various customers,” the regulator said on Sunday.
“At the moment, the amount of coins including small denomination in the market is sufficient.”
The move follows Thursday’s clarification by Abu Dhabi’s Department of Economic Development that shops in the emirate could round up the cost of products by 20 fils.
A bottle of water that is now Dh1.05 can be rounded up to Dh1.25 – a 25 per cent increase from the pre-VAT cost.
But shops and service providers are under no legal obligation to round up. And the 1, 5 and 10 fils coins are rarely used but are still legal tender.
Major supermarket chains on Sunday clarified their approach.
Spinneys said it was working to ensure a minimal effect on customers and is rounding down to the nearest 25 fils at checkouts on the total cost of goods.
“There will always be teething issues with any major change,” a spokesman for Spinneys said.
“We have used a combination of rounding up and rounding down to be as close to 5 per cent as possible and ensure sensible pricing for our customers.
“The policy at Spinneys has been, and continues to be, to round down to the nearest 25 fils at the checkout, giving the customer the benefit.”
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Carrefour said that in the case of cash transactions, change would be rounded up or down to the nearest quarter dirham – 25 fils, 50 fils and 75 fils. And in accordance with the departments rule, the rounding-up should not exceed 20 fils.
“In the credit and debit card transactions, the exact total amount will be deducted,” it said. “The company is carrying out different campaigns where they are absorbing VAT on selected items. An example is the Dubai Shopping Festival Campaign.”
The Fathima chain said it was rounding down prices.
“We have implemented VAT at individual items and rounded down the prices so that our loyal set of customers don’t feel the hit,” said Sameer Sulaiman, chief executive of Fathima Group.
The Zoom convenience chain, which is owned by Emirates National Oil Company, said it was following the department’s directive. “Zoom will round the VAT figures to the nearest 25 fils,” it said. “We are aware of the difficulties faced and we are working closely with DED for a solution.”
Many other outlets still seem to be figuring out the path ahead. When a latte came to Dh18.90 in one prominent coffee chain in the capital over the weekend, 25 fils change was handed over.
The cashier said it was done on a case-by-case basis and a formal policy on rounding up or down was not yet in effect. But two other branches of the same chain said they were rounding up to Dh19.
In another shop selling weight-gaining supplements in Khalidiya, the cashier said they offered 25 fils as change if 10 fils was the correct amount because they did not have small coins. But he said that many customers didn’t bother with the change.
Many lower-income workers are buying in bulk to offset the cost of rounding up. The increases will hit these workers the hardest.
It is not yet clear if the department’s rounding-up clarification applies to all emirates. But in phone calls to consumer lines at the Ministry of Interior and the Dubai Department of Economic Development, it was stated that consumers have a legal right to the correct change. And if you do not receive it, consumers can raise complaints.
In Dubai people can complain through the Ahlan Dubai number at 600 545555, while the UAE-wide Federal Consumer Protection Office can be reached on 600 522225.
Updated: January 8, 2018 01:46 PM