In less than a month, a new pound coin will hit circulation. If you run a business that operates with cash, you need to know what’s happening, why – and most importantly – how it will affect your business.
The Royal Mint have provided a wealth of information for business owners to get up to speed ready for the change, so let’s dive right in!
Why Change Our Pound Coins?
We may not have all come across a counterfeit banknote in our time, but most of us will have seen a dodgy pound coin. The soon-to-be “old” pound coins have become incredibly easy to forge; they were first issued in 1983 when £1 notes were phased out, and counterfeiting practices have become a lot more sophisticated since then. This makes the pound coin in its current form particularly vulnerable to forgery.
The Royal Mint estimates that 1 out of every 30 pound coins in circulation are fake. However, the new coins have a number of features that make them far harder to copy; so much so that the Royal Mint is calling it the “most secure coin in the world.” The intention is of course to curb illegal counterfeiting, but to also reduce the costs that forgeries inflict on businesses and on the taxpayer.
What Are the New Coins Like?
The new pound coin can be described as follows:
- It has a distinctive look, and is very different to the current pound coin. It’s a 12-sided shape with alternate milled (ribbed) edges and a bi-metallic finish (two colours of metal, like the current £2 coin).
- The heads side features a latent image underneath the portrait of Her Majesty the Queen, similar in concept to a lenticular image, which shows the “£” sign when viewed from one side and a “1” when viewed from the opposite side.
- Both sides feature very small “micro-lettering” on the outer rim of the flat sides of the coin.
- The most mysterious thing about the new £1 is that it features a “hidden high-security feature,” allowing genuine coins to be detected automatically.
- The coin will feature an image of The Queen on the “heads” side, and a new image symbolising the unity between England, Scotland, Wales and Northern Ireland on the “tails” side.
The bi-metallic construction, latent image, micro-lettering and the hidden security feature all serve to make counterfeiting pound coins harder and therefore less desirable.
The new pound coins will be entering circulation on the 28th March 2017. This will mark the start of the “co-circulation period.”
What this means is that for around 6 months, both old and new pound coins will be legal tender. The last day of this co-circulation period will be the 15th October 2017, after which the old coin will no longer be considered legal tender.
What Happens When Co-Circulation Ends?
The Royal Mint states that following demonetisation on the 16th October 2017, old pound coins can still be deposited into an account at a Post Office or with a number of high street banks, though they do advise that you check with your bank for more details such as deposit limits, etc. The Royal Mint encourages you to avoid this problem by using or returning your old coins in advance of the 15th.
By this date, all of your coin-handling machinery will need to accept the new coin. As of the 16th October 2017, you should not hand out the old pound coin, and you are under no obligation to accept the old coin from customers.
Advice to Small Business Owners
If your business is cashless, you don’t need to worry. However, it may be worth considering how much you rely on cash in your day-to-day running, no matter how little. Do you run any vending machines for staff or customer use? Do you keep any petty cash? It’s worth objectively taking stock of the exact role that pound coins play in your business so you can be prepared.
Also, forearm yourself with all of the information available from the Royal Mint on the New Pound Coin’s website.
With all of that in mind, let’s get to the advice:
- First of all, list all machines within your business that operate with pound coins. This can include vending/dispensing machines, machines that sort or dispense money into larger or smaller denominations, self-service checkouts, coin-secured trolleys, amusement machines or video game arcade cabinets.
- Contact the companies who manufacture or supply each device so they can give you further instructions about how the change will be implemented. This may be as simple as a remote software update, but may require replacement or amendment of equipment. Make sure you know exactly what the plan of action is for each device.
- Also check with these machinery suppliers/manufacturers as to which types of coin your machines will accept and dispense during the co-circulation period. Once the change to your machinery has been made, be sure to clearly communicate to those using the machines which coins will be accepted/dispensed.
- Agree with your bank in advance as to how to replace old currency with new once demonetisation occurs.
- Train your staff on the features of the new coin and the dates of the co-circulation period. Make them aware of the new coin’s appearance and visible security measures. Though the new coins are designed to be hard to counterfeit, unscrupulous types out there will likely still try, so it pays to remain vigilant.
Information and training resources about the new pound coin can be found over on the New Pound Coin website.Is your business ready for the new pound coin? Click To Tweet
For more information, please check out the links below:
The official website for the new pound coin: www.thenewpoundcoin.com
The new pound coin on the Royal Mint website: www.royalmint.com/newonepoundcoin
How are you preparing for the new £1 coin? Has the transition to the new fiver taught you any lessons about how you’re going to transition to the new pound coin? Have any tips or info that you’d like to share with other small businesses? Please share your thoughts down in the comments!