Complementary currency system used as a coupon (discount on price of goods)

saxplayer

Hi All,

I would like to know your thought about this business idea.

The idea is about complementary currency, which will decrease the price of goods and services and increase the number of customers for each retailer that will adopt this new system. The coupon represents a discount which goes hand in hand with euro and can be reused indefinitely. It is distributed free of charge for people who enter in the system and it is an income supplement for those who use it. Those who accepts it reuses it in turn in other activities of the circuit by circulating and maintaining wealth in the territory.
It has a 1: 1 ratio with the euro (1 WAC = 1 Euro), it is not convertible and is used with the euro.

Example: doctor's parcel accepting 20% ​​of WAC:
Total 100 € = 80 € + 20 WAC . The doctor uses it to pay for his accountant, cleaning company or going to the restaurant

Count on the restaurant that accepts 25% of WAC:
Total 50 € = 37,50 € + 12,50 WAC. The restaurateur can buy raw materials from a local producer and so on.

Here is the demo site, you can also download the app following the attached pdf file instructions:

https://communities.cyclos.org/wic/

What's its function?
The WAC have the dual function of increasing the purchasing power of families and to convey the wealth to the activity of the circuit, increasing its turnover.

A large portion of money spent in food and clothing by families are spent in the large-scale distribution (i.e. Tesco, Supervalu, Lidl). Unfortunately, these colossal companies do not reinvest in the territory, leaving only locally salaries of employees, but not the profits, and thus creating a real wealth bleeding from Ireland to foreign countries.
Using the WAC Instead, it conveys spending € on activities and local productions that increase their wealth at any time the good pass from hand to hand.

The benefits for traders would be the following:

- Increase sales and customers
- Financing the business activity by reducing the cost of goods and services bought
- Increase customer’s loyalty
- VAT is not applied to the coupons redeemed or accepted: the more you sell, the lower is the amount of VAT taxes you will pay!
- Set different prices by changing the percentage of WAC (i.e. based on the amount spent by customers/business partners)
- Foster business activities in county Clare and county Limerick

All this benefits for a very cheap cost:
https://communities.cyclos.org/wic/#page-content!id=7762070814181611071

Questions:

1. Do you think it is a viable idea? Would you adopt this system?
2. Could your suppliers adopt this system?
3. What are the things you don't like about this idea?

pedroeibar1

Local vouchers (i.e. proper gift vouchers spendable locally) have been in use for ages. Your proposal is a significantly worse offer so it has no hope.

How are you going to convince people to accept them? Your choice of name is probably going to be challenged. Your comments on tax are flawed. Your proposal is full of holes and false assumptions. The average shopper does not give a fiddlers about ‘local economy’ – they want cheap, which is why the German discounters have grown from nowhere to about 25% of the market here in a few years. Also many of your assertions are false – the supermarkets you named in addition to employing several thousand staff are major buyers of Irish produce and while they screw suppliers on price they do where possible try to buy Irish and develop Irish producers. Supervalue is an Irish chain (Musgraves) and its dividends are paid to its Irish shareholders, the founder’s extended family descendants.

Should I propose to pay my local plumber/doctor/grocer in ‘WAC’ I would be told “Take your WAC and PFO.”

saxplayer

Thank you for your feedback! Here are my answers to your questions:

pedroeibar1 wrote: »

Local vouchers (i.e. proper gift vouchers spendable locally) have been in use for ages. Your proposal is a significantly worse offer so it has no hope.

The "innovative" idea is that vouchers can be reused indefinitely and they are given when registering on the system and distributed periodically.

pedroeibar1 wrote: »

How are you going to convince people to accept them?

This is for sure the most difficult thing to do in a complementary currency system. But if we think that all money is exchanged primarily by convention, by mutual recognition of benefit, and also when you ask a loan to a bank, it creates money from thin air and it applies an interest on that, so why shouldn't we create a local currency system which improves local economy?

pedroeibar1 wrote: »

Your choice of name is probably going to be challenged.

The name can be changed and improved for sure.

pedroeibar1 wrote: »

Your comments on tax are flawed.

Based on Value-Added Tax Consolidation Act of 2010, Section 43 (3),
where a supplier
(i) supplies a coupon, stamp, telephone card, token or voucher, which has a redeemable value, to a person who acquires it in the course or furtherance of business with a view to resale, and
(ii) promises to subsequently accept that coupon, stamp, telephone card, token or voucher at its redeemable value in full or part payment of the price of goods or services,
and
(b) a person who acquires that coupon, stamp, telephone card, token or voucher whether from the supplier referred to in paragraph (a) or from any other person in the course or furtherance of business, supplies it for consideration in the course or furtherance of business,

then, in the case of each such supply, the consideration received shall not be disregarded for the purposes of this Act and when such coupon, stamp, telephone card, token or voucher is used in payment or part payment of the price of goods or services, its redeemable value shall be disregarded for the amount of chargeable VAT.

pedroeibar1 wrote: »

Your proposal is full of holes and false assumptions. The average shopper does not give a fiddlers about ‘local economy’ – they want cheap, which is why the German discounters have grown from nowhere to about 25% of the market here in a few years. Also many of your assertions are false – the supermarkets you named in addition to employing several thousand staff are major buyers of Irish produce and while they screw suppliers on price they do where possible try to buy Irish and develop Irish producers. Supervalue is an Irish chain (Musgraves) and its dividends are paid to its Irish shareholders, the founder’s extended family descendants.

The WAC could make foods and services cheaper for consumers and improve customer sales and loyalty for local producers. Would you compare the quality of foods or clothes from a local producer to those of a bigger supermarket or multinational?
The system is of course designed for Small and Medium Enterprises (SMEs) which don't know how to survive in the fierce competition of modern economy.

pedroeibar1 wrote: »

Should I propose to pay my local plumber/doctor/grocer in ‘WAC’ I would be told “Take your WAC and PFO.”