Chump Change

April 5, 2011 1:42 PM

A Euro Scam That Unfolded at a Snail's Pace “It wasn’t so unusual to get coins from China,” said Susanne Kreutzer, a Bundesbank spokesman. “That is a business model for some people.”
posted by chavenet (15 comments total)

From the end of the Times piece, regarding proper destruction of the coins:

...the Bank of Italy did not respond immediately to a request for information.
posted by bonehead at 1:50 PM on April 5, 2011

...the Bank of Italy did not respond immediately to a request for information.

That quote needs to be read in the driest possible BBC announcer voice.
posted by TheWhiteSkull at 1:54 PM on April 5, 2011 [3 favorites]

That quote seems to be gone now.
posted by bitteschoen at 3:19 PM on April 5, 2011 [1 favorite]

When I was a kid, I visited Canada in 1984 and I had a brilliant idea while I was there: I'd change my money into Canadian quarters, and when I brought them home to the USA, I'd have about 25% more money to spend on video games and pizza. I was a little let down when the Defender machine at my local pizza shop kept rejecting them, as did the pizza shop owner. I can't remember what I did spend those quarters on, but it was still kinda thrilling.
posted by not_on_display at 4:29 PM on April 5, 2011 [1 favorite]

Context for the Kreutzer quote in FPP:

Chinese companies recycle enormous amounts of washing machines, autos and other worn-out goods from Europe, often finding euros, which they then send back for redemption.

"It wasn't so unusual to get coins from China," said Susanne Kreutzer, a Bundesbank spokeswoman. "That is a business model for some people."

Business model, as I understood it:

1. Find stray coins in washing machines and cars sent to China for recycling.
2. Send coins all the way back to Europe.
3. Exchange for cash.
4. Profit?

It'd take a lot of old washing machines, used cars and careless coin-losing Europeans to make this enterprise profitable. I am amazed that it was actually so.
posted by vidur at 6:04 PM on April 5, 2011

Those parts are recycled not just for the potential coins hidden within but also for the metals they are made from, or even salvageable parts. The coins are just a bonus. I suspect the business part the spokesperson talked about was that they actually bother to collect those incidental coins and ship them to Europe for redemption.
posted by Catfry at 6:21 PM on April 5, 2011

Actually that seems to be exactly what you are saying, my bad.
posted by Catfry at 6:22 PM on April 5, 2011

Jeez, reconstructing coins? It's got to be easier to just melt them down and re-cast them.
posted by gjc at 6:31 PM on April 5, 2011

Catfry, yeah, that's what I was saying. Not that I understand how this thing can be made to work profitably.

Looking for metal coins in metallic machines has got to be a manual task. I am imagining workers opening every washing machine, giving the drum a quick spin by hand, and then closing it when there is no clinkety-clank sound. Even at the low hourly wages of China, this has got be a very thin-margin business.

Oh, and all the time these machines are spending in the coin-finding junkyard is the time they are not spending in being stripped down and recycled. That's gotta be an efficiency loss.

Any mefites working in the recycling business? This is your chance to tell us a story and get sidebarred.
posted by vidur at 6:54 PM on April 5, 2011

I concur. I guess it's possible the people doing this are not doing a cost benefit analysis and realizing it is a marginal way to spend their time. there is a certain instinctual attraction to simply being able to get actual money by just looking.
Though, it should be said that euro coins come in much larger values than you see in the US coins.
posted by Catfry at 7:31 PM on April 5, 2011

Aand, I see you are actually in Australia, no US money for you.
posted by Catfry at 7:34 PM on April 5, 2011

If you read the articles the SCAM part works like this, the coins are deemed damaged and taken out of circulation by a euroland bank. They're then separated into big and small rings and sold to china as bulk scrap. The Chinese don't melt em down, but put them back together and send them back to euroland via lufthansa employees who exchange them at the bundesbank for paper currency.
posted by youthenrage at 7:55 PM on April 5, 2011

youthenrage, yup, got that. The scam appears to be profitable. There is a reference to a non-scam activity (legal under the United Nations Convention on Finders Keepers) that I quoted in my comment above. That's what I am wondering about. if your comment wasn't addressed to me, sorry!

hippybear, perhaps. I am taking it to mean that "some people do this for a living", even if they haven't created a formal business model to seek VC funding.

Catfry, the Oz coins may also soon have much larger values than US coins. I think the exchange rate has flipped already.
posted by vidur at 8:13 PM on April 5, 2011

It's also interesting that US coins are worth more as scrap metal than they are at face value. And also, according to wikipedia, one of the arguments against pennies is that it costs 1.7 cents to make a penny.

I remember reading an article a while back about the US Gov's attempts to crack down on people just buying coins then melting them down. Maybe it was even here on the blue, but I can't seem to find it now.
posted by FunGus at 12:13 AM on April 6, 2011

Airline stewards brought back 29 TONNES of coins in their luggage.

29 TONNES! that's just insane..
posted by mary8nne at 9:03 AM on April 6, 2011