Japan: The Cashful Society

Financial IQ

On the shoe cabinet by my front door is copious evidence of my failure to adapt to a new—make that old—way of paying for stuff.

I’m spending the summer in Japan, living with my family in a tiny Tokyo apartment, eating incredible food, and trying to speak as much Japanese as possible. The Japanese, as you know, are adept at using technology to make all aspects of life a little more efficient.

Yes, I’m talking about high-tech toilets, electronic shelf price tags at stores that can be changed without a price gun, vending machines that sell a wide variety of goods, and a smart card that can be used on any train or bus by simply waving your wallet near the sensor.

Given this, it’s surprising that in Japan, cash is still king. Credit and debit card payments are rare, and I have not seen one person pay with a cell phone. We made a reservation at a fairly expensive hotel, and they warned us to bring cash.

Back home in Seattle, I’m a debit card devotee, but here in Tokyo, I’m constantly fumbling with coins and bills, and that’s what you’ll find on top of my shoe cabinet: a yogurt container overflowing with 1-yen coins, plus many precarious stacks of 10- and 5-yen coins.

The 1-yen coins are the worst—worse than pennies. They’re made of aluminum and weigh practically nothing (1 gram, to be exact). They feel like play money.

The cashful society

Japanese currency is just different enough from the American variety to drive me nuts. One yen is equivalent to about one US cent. There are 10,000-, 5000-, and 1,000-yen bills, which are equivalent to $100s, $50s, and $10s. Those are easy.

ATMs here—at least the convenience store ATMs that accept my Schwab ATM card—dispense only the largest 10,000-yen bills, and every merchant is happy to break a Benjamin (oops, I mean a Fukuzawa).

The problem lies with the coins. The “useful” coins are the 500- and 100-yen coins, equivalent to $5 and $1. In the US, it’s easy to distinguish between real money and chump change: real money folds; if you get a hole in your pocket and all your change falls out, it’s no big deal.

Here in Japan, it’s easy to end up carrying $25 worth of change, particularly if you come from the US and automatically reach for bills whenever you’re making a non-trivial purchase.

To make matters worse, there is no tipping in Japan. The other day I had a delicious lunch of several courses of fish (raw and cooked), tofu (cold in broth and fried with miso), and vegetables in a private room overlooking a garden. The service was unfailingly warm and attentive (although this is true even in fast food restaurants in Japan).

At the end of the meal I paid exactly the amount shown on the bill. If I’d tried to leave an extra 1,000 yen on the table (in coins), I know exactly what would have happened: a waitress would have run after me to tell me I forgot some money.

Incidentally, this is exactly the same thing that would happen if I dropped my wallet on the sidewalk. Someone would have returned it to me or to the nearest police station. Crime is so rare in Tokyo that nobody thinks twice about carrying around large amounts of cash—other than befuddled tourists, that is.

Getting rid of the coins

If I were living in Japan long-term, I’d develop a coin-management strategy. I asked my friend Kate, who teaches English at a school east of Tokyo, what she does with her coin hoard. “I spend it,” she said.

Both cashiers and the people in line behind you are very understanding if you take the time to count out exact change. If they’re grumbling internally, they do an amazing job of hiding it.

Kate also mentioned that it’s considered good luck to keep a 5-yen piece, which has a hole in the middle, in your pocket. The 5-yen is also the only piece of Japanese money without Arabic numerals on it, so you see foreigners squinting at them a lot.

There is one form of payment that, while not very common, is quick and easy and involves no jingling: some convenience stores and inexpensive restaurants near train stations accept the PASMO and Suica transit smart cards as payment.

For example, Gindaco, the delicious takoyaki (octopus ball) chain restaurant down my street, accepts smart cards. I have used mine a couple of times, but I worry that if I get in the habit, I’ll find myself turned away at the station gate because I ate too many octopus balls. (Octopus balls consist of a chunk of boiled octopus tentacle cooked into a ball of dough. What were you thinking?)

And I have one strategy for shrinking my Scrooge McDuck-sized hoard of yen coins: send my daughter out to run errands with her coin purse. She’s only eight, but it is totally acceptable and safe to send an 8-year old out into Tokyo to run errands by herself. Have I mentioned that Tokyo is great?

Come on over

Much of what you hear about Japan in the Western media these days is bad news: the country is still reeling from the 2011 earthquake and nuclear crisis, and its stagnant economy provides a dire warning of the path the US and Europe are trying to avoid.

Should any of this dissuade you from visiting Japan as a tourist? No more so than dire headlines about America should prevent anyone from visiting Seattle. Tokyo, in particular, is every bit as exhilarating and neon-lit as when I was here two years ago.

The Tokyo SkyTree, a 634-meter observation tower whose design I will chauvinistically refer to as “Space Needle-inspired,” opened this year and provides a panoramic and terrifying view of the city and—on a good day—Mt. Fuji. (The day I went up was cloudy.)

The trains still run on time and inexpensive, high-quality food is varied and ubiquitous.

Oh, and if you visit soon, swing by my apartment, because I have a welcome-to-Japan gift for you. It jingles.

Matthew Amster-Burton is a personal finance columnist at Mint.com. Find him on Twitter @Mint_Mamster.




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