Sunday, December 28, 2008

Exact change is powerful

The money system in Egypt is simple to use but the difference in price of an expensive good is so different from the price of an inexpensive good that you almost have 2 different money groups.

If you want to pay for a foreigner meal, you need around 50 LE (egyptian pounds). If you get out of the tourist area to eat, you only need about 5 LE.

So what happens is, you go to the ATM to get 500 LE out to last you a few days including a bed (about $100), but the ATM only gives you 100 LE and 200 LE notes. So if you're only staying and eating expensive foreigner stuff it works out ok, but if you can find cheap food like me, or want to take a taxi a short distance, or buy a water from the market, you'll find that almost nobody has the small bills necessary to give you change for your 100 LE note and especially your 200 LE note.

The store will want to keep the small change to pay other customers with smaller bills. For some reason, these establishments don't want to go to the bank and get a lot of small bills to help their business along. Maybe they're trying to use it to get foreigners to overpay? Or maybe the Egyptian banks don't like to give out small bills? I'm not sure of the reason. There's also no 7 eleven store chain here in this country that will cash out any size of bill like in Thailand.

So if you're not paying a large amount and you happen to have exact change, it's a convenient way to lower the price to what you're looking for when you're bargaining, because you take the hassle out of the transaction and that fact alone entices the locals to accept. For them it means less talking and less english required to complete the transaction.

This morning I needed to catch a cab from downtown Cairo to the airport. It's supposed to cost 60 to 70. Well that's what my hostel staff told me. But from experience, I know that taxis don't like to give back change. When most people (foreigners) pay a 70 LE bill, they will use one of their 100 LE notes, which means the driver needs to give 3 10 LE notes back in change. So I pulled out 4 10 LE notes and a 5 LE and showed them to a taxi driver after I pulled him over and said "45 pounds to airport" and he mulled it over for a bit, looked at my exact change and said "ok".

My little strategy worked this morning. To do this easily in Egypt, you need to use the 100 LE bills as much as possible and amass 10 LE bills as much as possible by getting change back from those 100s wherever you can. At one point 2 days ago I was carrying about 20 10 LE notes and 10 1 LE coins in my pocket. It was almost like I was a walking change machine according to Egyptian standards.

I didn't get to use this method successfully too many times in Egypt because I thought of it late in the game, but I will try to reuse it when I get to South America if given the opportunity.


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