Paying in coins? There are legal limits

By Yasmine Yahya, The Straits Times, 8 Nov 2014

YOU do not have to accept a pile of 10-cent, 20-cent or 50-cent coins in payment of a debt.

The Monetary Authority of Singapore (MAS) pointed out yesterday that there are legal limits when it comes to paying with small change. It means that you can reject coins used to settle an amount in excess of these limits and even take civil action against the payer to recover the debt.

The MAS statement follows two recent high-profile incidents involving people settling debts - and a few scores in the process - by using large amounts of coins.

In the first case, early last month, cellphone store Mobile Air at Sim Lim Square tried to give a customer a refund of more than $1,000 in coins.

In the second case, on Tuesday, Mr Lester Ong Boon Lin, a customer of car dealer Exotic Motors, left $19,000 worth of coins as payment at the car showroom. It was a particularly toxic form of protest, given that the change had a strong odour of fish.

Mr Ong, said to be the son of a famous nasi lemak franchise owner, had been ordered by a court a few months ago to pay the amount to Exotic Motors.

The MAS said yesterday that "a payee has no obligation to accept coins beyond the legal tender limits set out in the Currency Act".

The legal tender limit for coins of denomination below 50 cents is $2 per denomination. For 50-cent coins, the limit is $10. However, there are no limits for payment in $1 coins. That would mean that 19,000 $1 coins would not have breached the legal tender limits.

"The payee has the right to reject coins used to pay any amount in excess of the limits. In such a case, the payer continues to owe the payee the remaining debt," the MAS added.

"The payee may take civil action against the payer to recover the debt."

MAS reviewing legal tender limits for coins

WE THANK Ms Estella Young for her feedback on the legal tender limits for coins in Singapore ("Why no cap for $1 coins?"; Wednesday).

The currency issuing authorities generally set legal tender limits on smaller denominations of currency to minimise inconvenience and cost in handling large quantities of low-denomination currency.

Legal tender limits on coins have been adopted in a number of countries, including Britain, Australia, Canada and Japan. For example, in Britain, smaller denominations below 50 pence are legal tender up to £10, while higher denominations of £1 and above are legal tender for any amount.

In Singapore, when the Currency Act was enacted in 1967, there was a legal tender limit for the $1 coin, up to an amount not exceeding $10. There was no limit for the $1 note, which had coexisted with the $1 coin. However, the legal tender limit for the $1 coin was removed in 1982.

The Monetary Authority of Singapore is currently reviewing the legal tender limits for the various denominations of coins, including the $1 coin, and will keep the public informed of the outcome.

Bey Mui Leng (Ms)
Director (Corporate Communications)
Monetary Authority of Singapore
ST Forum, 15 Nov 2014

Why no cap for $1 coins?

TWO recent cases of parties expressing their dissatisfaction by making payments in vast numbers of coins highlight an inconsistency in the Currency Act ("Man pays car dealer $19,000 - in coins", last Thursday; and "Sim Lim Square seeks help to tackle 'black sheep' ", Nov 4).

According to the Act, payees can refuse to accept payment in coins in denominations smaller than 50 cents, for any amount exceeding $2. They can also refuse payment in 50-cent coins for any amount exceeding $10.

There is no restriction, however, on the amount that can be paid in $1 coins ("Paying in coins? There are legal limits"; last Saturday).

So, Exotic Motors would have been forced to accept the $19,000 from Mr Lester Ong if he had used $1 coins, instead of 20-cent ones.

Can the Monetary Authority of Singapore explain why there is no cap on the use of $1 coins?

Perhaps there should be one, to prevent the mischievous use of coinage to inconvenience creditors and businesses.

Estella Young (Ms)
ST Forum, 12 Nov 2014

Looking at the flip side of the coin
Despite recent bad press, large coin payments are fine in the heartland
By Samantha Boh, The Straits Times, 19 Nov 2014

HE HAD a customer who paid for $100 worth of items with coins two weeks ago. But far from being annoyed, Mr Ganesan Thangaraju said that for small businesses like his, the more coins, the merrier.

"I always need coins to give to my customers as change, so no matter the amount given in coins, I accept them," said the 44-year-old shopkeeper of Ambra Enterprise Flower Shop in Yishun.

Coins have been in the news of late, in particular the use of them to make large payments.

Last month, cellphone shop Mobile Air at Sim Lim Square gave a customer a refund of more than $1,000 in coins.

Two weeks ago, Mr Lester Ong left $19,000 worth of coins as payment at Exotic Motors' car showroom.

Despite the bad press, coins are very much the darlings of heartland shop owners, hawkers and supermarkets.

Mr Edmund Li, 31, who owns Fei Zai Mixed Vegetable Rice Porridge at Maxwell Food Centre, is among those who need lots of change. "We have to change $50 worth of notes for coins every day because we are always short of coins," he said.

He accepts up to $10 in coins and often asks his customers to pay in coins if they can.

Likewise, Madam Koh Hong Cheng, 61, a shopkeeper at Tung Kuang Trading and Refrigerator Service in Toa Payoh, said she never rejects coins. "There are those who really do not have any money except for coins, and we have to be considerate."

At YES Supermarket, coins worth about $50,000 are ordered each month to meet demand at its five outlets, said its managing director Kwek Hong Lim.

Occasionally, the supermarket also gets a customer who asks to change a few hundred dollars' worth of coins for notes.

While heartland businesses welcome payments in coins, the five-cent denomination is an exception. The reason is customers are unwilling to receive them as change, although they expect shopkeepers to accept them as payment.

"We end up with jars of five-cent coins, as it costs money to deposit them in the bank," said Mr Lin Yi Zhong, 62, who owns Tuo Yong Trading, a provision shop in Toa Payoh.

Banks typically charge $1.50 for every 100 coins deposited, regardless of denomination. There is no cap on the number of coins that can be deposited.

Under Singapore's Currency Act, coins in denominations of less than 50 cents - in other words, 20 cents, 10 cents, five cents and one cent - can be used for the payment of a sum not exceeding $2. For payments in 50-cent coins, the limit is $10; there is no limit for payments in $1 coins.

But retiree T. Jeganathan, 69, was told off by a hawker recently when he tried to pay for a $1 bowl of bean-curd dessert with three 20-cent coins, two 10-cent coins and four five-cent coins.

Said Mr Jeganathan: "Five cents is also money and I think paying with four five-cent coins is reasonable. Of course, I would never give 10 five-cent coins at one go - that would be unreasonable."