Operating a business in a country such as the Philippines can be quite interesting not only because of the diversity of the market but also with the corresponding traditions that affect how you run your establishments. One of this traditions which is a peculiar practice in the country especially in small local business such as the ‘sari-sari’ stores, is shortchanging.
How do we define ‘shortchanging’? Basically, it is when customers are not given the exact amount of monetary due for a product or service rendered by a business establishment.
In the country, it has been a bold practice for businesses big or small, not to make enough effort to provide the precise change to consumers particularly if we are talking about amounts less than a peso: cents of 10s, 5s, 1s.
In all fairness, such is a common and acceptable act among business owners as well as customers that complaining is not really expected. As a tradition common among Filipino trades, accepting candies or other items in lieu of money as change is a part of buying from a ‘pinoy store’. However, things are about to change after a new bill related to this pattern has been passed recently.
The second half of the year highlighted a bill endorsed by the congress and was successfully passed by the senate which seeks to change the bad shortchanging habits of the Filipinos.
The bill, now a law is called, RA 10909 or the ‘No Shortchanging Act’.
As business owners, one should be aware of the changes as well as the rules that will soon be implemented.
We have arranged the top things that you should know about the ‘No Shortchanging Act’ of the Philippines.
1. Providing sufficient change is now a legal responsibility.
Although shortchanging has been a practice ever since one can remember, businesses are now legally obliged to provide the exact amount of change to the last centavo. This means that as a business owner, you should be ready with your Philippine peso coins so you cannot use any reason of not having the right denomination to complete the customer’s change.
2. Lacking loose bills or coins should not be an excuse.
It is understandable that during specific hours of the day especially in the morning, you lack the bills or particular coin values to provide the exact change. However, the law states that such excuse will not give you any exemptions – you must deliver the cent-per-cent amount by all means.
3. It is better to provide excess change than give less.
The law also strongly suggests that in the event that you are made to choose between providing excess change and change less than the amount due, you are legally bound to choose the former. It is better to offer more than to shortchange the customers since as a law-abiding provider of goods and services, it is your responsibility.
4. Giving candies instead of cent-worth change is no longer an accepted alternative.
Although some customers think of this as a treat, this practice common even across generations of Filipino consumers should not be a substitute. The new law pointed out that this should be stopped for the same reason – the exact monetary value must be provided and nothing else.
5. Talking the customer out of it is prohibited.
RA 10909 also states that as a manager or staff of the business establishment, you should NOT talk your way out of giving your customers the exact change that they deserve. No matter how big or small the amount is, it is your obligation to find ways.
6. Encourage your customers to ask for their exact change.
The new law further suggested that responsible business owners are expected to post a sign that clearly encourages customers to actively take part in the implementation of the law by demanding for the exact change. Printed signs should be located near the register where they can be readily seen by the store patrons.
7. Follow the law or face penalties.
Since this law strictly provides different ways and means to stop the bad shortchanging habits of the Filipino businessmen, the dos and don’ts are coupled with serious penalties for violators.
The gravity of the penalties depends on the frequency of the offense. They are as follows:
• First offense:
For managers or owners of business establishments who are proven to ignore the law, the first offense will cost them a fine of PhP500.00.
• Second offense:
A more serious punishment is set for the second instance of shortchanging: the suspension of the business license to operate for three (3) whole months, and a higher fine of PhP15,000.00.
• Third offense:
If a business establishment violates the law for the third time, it will result in the revocation of their license to operate. Furthermore, the owner is required by law to pay a fine of P25,000.00.
As what we have mentioned throughout this article, shortchanging has been a part of a ‘pinoy’ habit especially for small businesses. On the surface, one might think that shortchanging is nothing serious and should just be understood as part of an interesting and harmless tradition.
However, Sen. Paolo Benigno “Bam” Aquino disagrees. During an announcement of the passage of the new law, he emphasized that with RA 10909, the government will teach an important lesson on the promotion of, “a culture of decency, integrity, and professionalism among Filipino businesses”.
The senator believes that the eradication of this seemingly harmless habit of businesses can be a game changer. He added that such practice will help Filipino businessmen in the future and believing in good practices will aid in the growth of their establishment.
Shortchanging is most common in ‘sari-sari’ stores and small scale business but it was clearly stated that the new law will also cover big establishments including supermarkets and mall merchandisers.
With all its intentions, RA 10909 is a promising law but the question still remains: will Filipino business owners take this seriously? Will consumers be more forgiving and ignore shortchanging just like what they always did?
Also read: List of Business Laws in the Philippines