Guest Post by George Retired Broker about how to save pennies.

Apart from being a seminal album by Dire Straits, Alchemy is the very ancient art of turning worthless metals into gold. Probably the single most notable feature of this noble practice is that it, unsurprisingly, doesn’t work. Imagine my joy then when I stumbled across, in Tesco of all places, a modern equivalent whereby I was promised that I could instantly turn cash into er.. cash.

It gets better, but I’ll get to that in a minute. Let’s backtrack a bit and I will tell you how I came by this amazing discovery.

As I am no longer shackled by time constraints, I tend to do my supermarket shopping either very early in the day, or very late. No crowds. No hassle and bustle. Lovely. Sometimes though it means no checkout operators either and I am marshalled toward the self service checkouts. The ones that are programmed not to like me. The ones that talk to me and I can’t answer back. “Unexpected and perplexed retired broker in bagging area” is a common one sided conversation I have with said checkout. However, the discovery of a Coinstar machine in the entrance of my local Tesco may have altered my relationship with the self service checkouts forever.

For anybody that isn’t familiar with a Coinstar machine, I will explain. About the size of a photo booth they stand in the entrance to most supermarkets and are emblazoned with wording such as “How much is in your jar?” and “Coins in – spending money out.” The idea is very simple; many people throw their small change into a pot or jar and every now and again get it changed. I do it myself, which is why I took a closer look at one of these machines. Simple to use, you just tip your pot of pennies and 5p’s into the machine, it takes a few moments to mechanically sort and count, then it gives you notes and higher denomination coins – less a 9.9% fee!

Yes, I have found a way of saving that will guarantee to lose you 9.9% instantly.

Now, as anyone who reads my blog knows, I tend not to care too much about an actual financial product, but more about people having the right information about it so that they can make choices that are good for them. In this instance, after conducting a not that scientific straw poll of people (six in total) I am leaning toward the fact that this fee isn’t as prominently shown as it could be. In fact all six people I asked didn’t know about it at all. There is no suggestion that the fee is not mentioned, I am just suggesting that it is mentioned in a more restrained way than the “What is in your jar” headline. It is also mentioned on the website. Just click on the link marked support at the very bottom of the page and you will find it at point number five in the FAQ’s. Interestingly, it states that this fee may vary “according to location”, which begs the question “do the supermarkets have the power to adjust the fee”? I would be interested to know this, because I am assuming that the supermarket is getting a little tickle from all this loose change converting that is going on.

One way of getting this fee down a tad, is to select one of several charities that will benefit from your savings pot when you tip it in the machine. Such donations will only attract a 7% fee instead.

So, having looked into this service, I’ve decided, and it wasn’t a long deliberation, it’s not for me, but what are my options when it comes to emptying out my piggy bank? Well, a bank would seem a good choice, but they are only likely to help if you have an account with them. The Post Office is likely to be more helpful, but they (as with the banks) will want them properly counted and bagged, which is only fair when you think how long such a service could take if they weren’t properly bagged! They may also have limits on the amount you can change at any one time so it is probably a good idea to find this out before you carry a lot of heavy bags up the high street.

Perhaps the answer is in the supermarket after all. Several offer “Christmas savings” stamps or cards. Using your spare change to buy these might mean having to count up your change more often, but they generally come with a small bonus at the end – which is the opposite to what the change machines do. Another idea is to actually spend the change on your shop. Virtually all supermarkets have self service tills now and there is nothing to stop you feeding these automatic checkouts with smaller coins. It might take a few moments longer, but, contrary to Coinstar’s belief, it is still cash!

Finally, if you do want to give it to charity, you can find a suitable charity box and just put it in. They would be happy to count it and benefit from the full amount!

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