“Free money” from Long Term Foreign Currency Deposits


As an independent consultant I have travelled internationally a fair amount over the years and as happens with many business people a number of small plastic wallets with foreign notes had accumulated at the back of the cupboard in my office at home, which had long been overlooked. As various projects had finished and the next one hadn’t quite started, we decided to head off to France for a quick break. Whilst searching for the passports I (re) discovered these long forgotten zero interest foreign multi-currency deposits; a quick sort of the “vault” out yielded one wallet containing 120 Hong Kong dollars, another a massive 1250  Pilipino Pesos, 25 Swiss Francs, and 55 Danish Krone. Note I had been a good citizen and all of my loose coins had gone into charity collections on the planes.

I headed to the FX counter at the travel agents in the high street in a small town where I live on the outskirts of London. As they calculated the FX rates for then Hong Kong Dollars, then the Pilipino Peso and the Swiss Francs notes and changed them into Euros for me, in my mind’s eye I was already drinking my first of a few free holiday beers; but then came crashing back to reality when there was an issue with the Danish Krone and the agency wouldn’t accept them – mentally that beer unpoured itself back into the bottle and was placed back in the chiller!

Why? What was the problem? They had accepted the Pilipino Peso what could be wrong with the Krone? Apparently Denmark changed their banknotes back in 2009 and when I worked it out I had been to Copenhagen for a day in 2008 (I did say that these were long term foreign exchange deposits) – so my banknotes were no longer legal tender – because of this I had lost just under €7.  As I walked home I mulled over this, I was happy I had gained around €50 of free spending money from the other currencies but it was the loss of the €7 that bugged me.

I shook myself to my pricing senses and recalled my inner Thaler[i] and set my “mental accounting” straight: I had to treat both transactions the same so: either I had free spending money of €43 and from a plus €50 free and a valueless minus €7 so I shouldn’t worry about the issue with the Krone or I had to treat my long-term FX deposits as nett €43 with the €7 loss from Krone but a gain of €50 from the three other currencies.

When your customer buys your products or services off you, how do they think about their costs and about their money, if they do have these set of mental accounts, how you do take this into consideration in their purchasing process?

So how do you position your product or service in such a way as to manoeuvre around your customers’ barriers, real or perceived, and make it easier for them to say ‘Yes’ and feel good about it?

Right, time for that beer now… Hang on, €8.50 for a beer, you have got to be kidding…………………



[i] RICHARD H. THALER Mental Accounting Matters Journal of Behavioral Decision Making 12, 1999

Euro graphics owner psdgraphics.com

Leave a Reply

Your email address will not be published. Required fields are marked *

LinkedIn Profile


How to build your perfect LinkedIn profile

90 seconds of a meeting


First 90 seconds of a meeting

Planning for coaching


Planning your coaching sessions