It's a scene all too familiar: You queue up in the shop to pay for the items you have bought, give the cashier cold cash, then you get handed insufficient change.
If you're lucky, the cashier will be apologetic about their lack of coins. Many times, however, most cashiers won't even bother to explain the deficit, as if missing a coin or two is an escapable fact of life and everybody is supposed to get over it.
To address the age-old problem of shortchanging, Republic Act No. 10909, or the "No Shortchanging Act of 2016," was signed into law in 2016. The law's enactment signals the significant extent of the problem it seeks to resolve.
Whether it's in the malls, the convenience stores, or in open-air dry goods markets, many sellers to this day remain oblivious to their legal obligation to provide exact change. It certainly doesn't help that many consumers aren't all too knowledgeable about their rights either; many choose to forego small amounts than fight it out with store-owners, thinking it's just not worth the trouble. For those who are aware of their rights, it's also not worth the trouble, but more on that later.
The "No Shortchanging Act" institutionalizes the industry practice of giving consumers of goods and services exact change, hence its popular reference as the "Exact Change Law." The law covers all business establishments, defined as 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.
Under the law, business establishments are supposed to automatically hand in the exact change to their customers even without demand.
Monetary penalties await those found to be giving insufficient change, as follows:
- For the first offense, a fine of P500 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 fine of P5,000 or five percent (5%) of the gross sales of the business establishment on the day of the violation, whichever is higher;
- For the third offense, a fine of P15,000 or seven percent (7%) of the gross sales of the business establishment on the day of the violation, whichever is higher, plus three-month suspension of license to operate; and
- For the fourth offense, a fine of P25,000 or ten percent (10%) of the gross sales of the business establishment on the day of the violation, whichever is higher, plus revocation of license to operate.
Apart from providing an express prohibition against insufficient change, the law and its Implementing Rules and Regulations (IRR) also require business establishments to use tax-inclusive price tags whenever applicable; issue sales invoices or official receipts; post notices in every counter, such as "Please demand for your exact change" or any language to such effect; and to hand in change exclusively in currency form (no candies, please).
The devil is in the detailsOn its face, the "No Shortchanging Act" seems like a clear winner in expanding and reinforcing the rights of consumers against abusive mercantile practices, such as shortchanging. But a closer look at how it works betrays a long, agonizing, and heavily bureaucratic adjudication process which, when viewed from the lens of the consumer, is discouraging and just way too cumbersome.
The IRR of the law provides that complaints filed for violation of the "No Shortchanging Act" would more or less proceed in accordance with the Department of Trade and Industry (DTI) Administrative Order No. 7 s. 2006 outlining the procedure for administrative cases filed with the DTI for violations of trade and industry laws.
This is well and good, but considering the lengthy and expensive administrative procedure DTI espouses, there is hardly any incentive, if at all, for any consumer to file a complaint against any business establishment under the "No Shortchanging Act."
Consider that most cases of shortchanging involve sums of money ranging from a few centavos to a few pesos. Following the complaint and adjudication process of DTI, if a hypothetical consumer gets shortchanged for, say, five pesos (Php 5), and subsequently files a complaint to make the erring business establishment liable under the "No Shortchanging Act," said consumer would need to count a minimum of 60 days or two (2) full months from the date of filing of the complaint before DTI even comes out with its findings. That period could be longer.
Further, complaints must be sworn and notarized; documentary evidence, such as police reports, must be attached thereto, and the same must be delivered to DTI's provincial, regional, or national offices.
Only complainants with extra cash to burn, who are extremely vengeful, who have nothing better to do, and who live near provincial and regional centers, would find the law useful. In other words, it would require a sociopath for this law to even be remotely relevant.
At the end of the day, consumers are better off demanding exact change. But if they do get shortchanged, it's best for them to simply demand the deficit, if only because the law prohibiting shortchanging makes you go through hoops and circles and layers of bureaucracy to make erring business establishments liable.
For the majority of consumers who get shortchanged minuscule sums, the law is nothing more than lip service.