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8 New Philippine Laws: Part 4 of 8 No Shortchanging Act

Whenever you go to a 'sari-sari' store or a business establishment and the owner or cashier is short of change, they will either give you a candy or tell you that they owe you a few cents. Most buyers do not bother to demand for the exact change. After all, the amount is less than a peso. Although this is a common and acceptable act to people running a business in the Philippines, enacting a bill into a law, which requires establishments to provide exact change will render this practice a violation. 

The law ensures that providing exact change to customers becomes a legal responsibility. Business owners should prepare peso coins to complete the buyer's change. Reasoning that you do not have a few cents to complete the change will no longer be an acceptable excuse. 

In fact, it is much better to provide excess change that give customers less than what you owe them. If you used to consider giving candies as an acceptable option for the lack of loose coins or bills, the law will prohibit this act. Customers are also encouraged to demand for exact change.

Republic Act No. 10909

Sec. 3. Definition of Terms. - For the purpose o this Act, the following terms shall mean:

a)Business establishment - any person, natural or juridical, whether single proprietorship, partnership or corporation, including a government-owned and -controlled corporation or a government entity exercising its proprietary functions, engaged in, or doing business in the Philippines, either in selling goods or providing services;

b) Change - the excess in the payment given by a consumer for goods and services purchased or received from a business establishment;

c) Consumer - a natural person who purchases goods or services in cash;

d) Goods - all types of tangible property that could be bought and sold, and the possession of which could be transferred in whole or in part, temporarily or permanently. 

e) Gross sales - the total invoice value of sales, before deducting for customer discount, allowances and returns;

f) Insufficient change - a change that is less than what is due the consumers;

g) Price - tag any device written, printed, affixed or attached to a good, or displayed in a consumer retail or service establishment for the purpose of indicating the retail price per unit or services;

h) Services - all types of commercial activities which enable the supply, access to, consumption or use of goods, intellectual property or other services; and 

i) Shortchange - the act of giving insufficient or no change to a consumer who purchased a product or service. 

Sec. 6. Penalties. - Any violation of this Act as determined by the DTI under Section 5 hereof shall be punished as follows: for the first offense, a violator shall be fined five hundred pesos (P500.00) or three percent (3%) of the gross sales of the business establishment on the day of the violation, whichever is higher; for the second offense, a violator shall be fined five thousand pesos (P5,000.00) or five percent (5%) of the gross sales whichever is higher; for the third offense, a violator shall be fined fifteen thousand pesos (P15,000.00) or seven percent (7%) of the gross sales of the business establishment on the day of the violation, whichever is higher, and the license to operate of the business establishment shall be suspended for three (3) months; and for the fourth offense, a violator shall be fined twenty-five thousand pesos (P25,000) or ten percent (10%) of the gross sales of the business establishment on the day of the violation, whichever is higher, and the license to operate of the business establishment shall be revoked. 

Exact Change Is Indeed Coming

When you buy something from a store and the cashier or the store owner owes you a few cents, would you take the change given in the form of a candy? To some, a few cents are not that big of a deal, but shortchanging is considered a violation of the law. Perhaps you have also encountered a cashier from a business establishment asking you for a smaller bill, some will immediately search their pockets for some loose coins while others will give the cashier a questioning glance?

If you are in a hurry, you will simply leave an impression of indifference, take the change available to the cashier and forget about the missing cents. Customers who do not have the luxury of time to argue will not be too concerned with getting the exact change. However, with the Republic Act 10909 gaining traction in the Philippine law, shortchanging should be a big no-no. 

No Shortchanging Act

The law will not exempt establishments lacking loose coins or bills. Exact change must be given to the customer. There are also conditions when establishments are encouraged to provide excess change to ensure that the change given to the customer is not less than the amount due. Other alternatives such as giving candies will not be allowed in exchange to loose change. The amount may be small, but this should not be a reason for the customers to allow managers and staff to be spared from giving the exact change regardless of the amount.

The Penalties

If establishments fail to give the exact change to customers, a fine of P500 will be imposed for the first offense. For the second violation, there will be a suspension of business' license for 3 months and an additional fine of P25,000 will be imposed. For the third offense, the license to operate will be revoked and an additional fine of P25,000 will be imposed. The law applies to big and small establishments, even sari-sari stores. In case you purchase something, make sure you demand for exact change.