Old currencies make brief comeback Paris, 2002-12-14 (International Herald Tribune) By Barry James
Suddenly it feels like old times for customers at the European chain of C&A clothing stores, which is accepting defunct francs, Deutsche marks and other currencies for a limited period over the festive season.
Although it was meant as a marketing ploy, C&A is finding that the operation is a financial success as well, as it taps into a hidden mountain of notes and coins that the European Central Bank in Frankfurt estimates to equal at least €13.5 billion ($13.7 billion).
After only a week, business conducted in the old currencies "accounts for 6 percent of sales," said Sylvie Amblard, a spokeswoman in Paris for the privately held retailer, which does not release detailed information about its financial affairs. In Germany, the company said, up to 30 percent of sales in some stores had been in marks. In Austria, a spokesman said up to 7 percent of sales were conducted in schillings.
The extra profits from the operation have been at least partly swallowed up in the administrative costs entailed in going back temporarily to a double accounting system.
So far C&A seems to be the only multinational chain store that has latched on to the idea. But in Oberndorf, an Austrian town on the border with Germany, 200 small shopkeepers are taking schillings, as well as marks, in the run-up to Christmas. Usually its citizens travel the 25 kilometers (16 miles) to Salzburg to do their shopping, but now people are coming from all over to do their Christmas shopping in Oberndorf.
"It's been a remarkable success," said Hans Hinterholzer, owner of a household goods store, adding that sales already are up 10 percent on last year.
Even though the euro has been the only legal tender throughout the 12-member single currency area since March 1, it is not illegal to be trading with the old notes and coins.
Amblard of C&A said the company had checked with the French national bank and received no objections.
In Austria, company executives checked discreetly with the central bank without revealing the scope of the intended operation.
A spokeswoman for the European Central Bank said it was legal to deal in anything from sea shells to defunct marks providing both sides agree on the value.
"We, as the central bank, don't take pleasure in this because it could confuse people and lead to misunderstandings," Thomas Wagner, deputy head of the legal department at the Austrian National Bank, said. "The schilling is no longer legal tender. But if someone's willing to take it, that's O.K."
Like any citizen, C&A can take told old notes and coins to the central banks and receive the full value in euros. Amblard said the operation had definitely increased sales because it gave customers an easy opportunity to get rid of money they find stuffed behind seat cushions, forgotten in the pockets of winter clothes, overlooked in old pocket books. Usually, the amounts are too small to make it worth while taking the money back to the central bank.
Anna Bako, a 60-year-old retiree paying for some shirts and gloves with a combination of schillings and euros at the store Thursday, said she recently found 325 schillings ($24) while cleaning out her closets.
"The money was in a bag I hadn't used in a while," she said. "This is a lot for me, and if I don't spend it, it'll be worthless."
In Paris, the offer to accept the old money lasts only until Saturday because the clothing chain did not want it to become mixed up with other promotions, Amblard said. In other countries, the operation will continue to the end of the year.
Regina Schueller, a spokeswoman for the European Central Bank, said there was nothing exceptional about the large amount of idle cash. "People hoard money," she said. "It is a fact that has existed ever since money began."
In Austria, the equivalent of about €600 million is estimated to be under the mattress.
"That's a lot of money," said Herbert Asamer, spokesman for C&A in Austria. "So we asked ourselves how we could use it in our favor - and in our customers' favor."
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