Frequently Asked Questions
All you ever needed to know about the Totnes Pound. Please contact us if you have any further queries.
- How will it benefit my business?
i) Advertising your business to the public and other businesses
Recent local currency schemes have successfully raised the profile of member businesses through generating very significant media coverage.
ii) Attractive and easy to use for your customers
Paper money is understood by all, and with beautiful and innovative designs representing Totnes's current and historic culture, Totnes Pounds are exciting for visitors and a symblo of local pride and identity for Totnesians.
iii) Better communities mean better business
A local currency has the potential to significantly increase the amount of spending power of people in the target area and ensures that the extra spending power goes to local independent businesses. The scheme is designed to help build stronger relationships with customers and better inter-business trading.
- Why will my customers use the local currency rather than sterling?
In developing this currency we have seen real enthusiasm for it and a strong desire for money to work in a different way - for local needs. People want this positive, active way of showing their support for Totnes and its independent traders. It is a great way of being part of the community. It enables people to support the local economy and get closer to local businesses and suppliers, being much more than just a consumer.
- Are there any charges for using the Totnes Pound?
No, there aren't any charges either to the businesses that accept the Pound, or to individuals who use it.
- Will my suppliers accept Totnes Pounds?
At the launch of the new series of Totnes Pounds in April 2014 there will be a large number of businesses in the Totnes area already signed up, and we anticipate that more and more businesses will want to join. The system is one of voluntary membership and is complementary to sterling – we do not expect members to trade wholly in Totnes Pounds even with other members of the scheme. However, if your suppliers are not members then we will work with you to encourage them to join, if appropriate, or source alternative suppliers who are members of the scheme.
- Can I exchange Totnes Pounds back into sterling?
Totnes Pounds can be exchanged back into sterling by member businesses at the ISSUING POINTS. Individuals cannot exchange Totnes Pounds for sterling. If you have any queries about this, please contact us.
We do ask member businesses to make reasonable efforts to spend the money with OTHER MEMBERS. Keeping Totnes Pounds circulating is the best way to maximise the scheme's benefits.
Although there is a 5% launch discount for individuals who buy Totnes Pounds (t£21 for £20 sterling), businesses that need to change them back into sterling will receive the full equivalent value (i.e. £21 sterling for t£21).
- How does taking Totnes Pounds affect my tax liability?
For tax purposes all Totnes Pound transactions are treated as if they were made in sterling. So this will not affect how you declare your revenues, expenses and any taxable profits to HMRC. Likewise VAT should be charged based on the price of goods as normal. On completing VAT returns, payments to HMRC must be made in sterling.
- Does my business have to accept full payment in the currency?
In becoming a member, a business is making a commitment to accept Totnes Pounds in payment for goods and services. We will work with business members to find effective ways of spending any Totnes Pounds received.
In reality we would never try and force a member to accept full payment in Totnes Pounds against their wishes. Totnes Pounds are not legal tender, but we do ask that businesses honour the spirit of the commitment they have made in working with us to make the Totnes Pound scheme a success.
- How do I leave the scheme if I no longer want to be involved?
When leaving the scheme we ask businesses to give two months notice in order to provide us with the opportunity to update online and print marketing material.
You should write to us to let us know.
- What is local currency?
Local currency can take many forms, but essentially it is money that is used across a particular locality or region. Spending in the target area boosts local economic activity by retaining money in the area. This encourages and strengthens economic bonds between the people of the area and local businesses.
The Totnes Pound (t£) is a complementary currency that can be used alone or alongside the national currency. Whilst there are some rules for taking part in the scheme, local currency is not legal tender like sterling and so accepting Totnes Pounds is voluntary.
- How much does it cost to join?
It is free! There is no joining fee or ongoing membership fee to be a member of the Totnes Pound at the moment.
- Why have you set up a local currency?
The primary purpose of the scheme is to strengthen the local economy by incentivising people to use independent local businesses. We believe that the people of Totnes have a strong sense of identity and civic pride. Totnes’s independent businesses are crucial to that community identity.
By incentivising spending in independent businesses, the Totnes Pound helps wealth created in Totnes to stay here. Known as the multiplier effect, Totnes Pounds will be spent repeatedly only within the local economy. With sterling, much of the wealth spent in the town is lost to big international business, related management structures, remote shareholders and the boom-bust of the financial banking system. The Totnes Pound can help deepen and diversify the connections between local business people and local citizens – an important part of building a sustainable regional economy and providing high quality employment.
- Will the scheme make a profit, and if it does what happens to the money?
The Totnes Pound is run for the benefit of its members and for Totnes, not for profit. Any profits made will be used to improve or extend the scheme thereby providing additional benefits to the community. We are in the process of setting up a community interest company limited by guarantee.
- What are the risks?
Totnes Pounds are not exchangeable for sterling by individuals. They are to be spent with member businesses (of which there are 150 plus now). We encourage businesses to re-spend them where at all possible but if they receive more than they can spend they can exchange them for sterling.
Totnes Pounds in circulation are backed by sterling (except for those sold as souvenirs) and so in the event of the scheme closing, Totnes Pounds will be exchanged for sterling at face value by Totnes Pound CIC.
- Is this being done anywhere else?
There is a long history of places having their own currencies and it was very common in this country until the centralisation of the banking industry in the 19th century. More recently, many places around the world, including the UK, have launched local currencies using a variety of models. The Swiss Wir for example, launched in 1934 has more than 800 million swiss francs worth are in circulation today. The Totnes Pound has already inspired other currencies to launch in Brixton, Bristol, Lewes and Stroud.
- What do you do with all the sterling people pay to get their Totnes Pounds? Will it be safe?
All sterling which we receive in exchange for the new Totnes Pounds is held in a bank account as backing for the currency and to provide certainty of value to Totnes Pounds.
The costs of printing and publicising the new series of notes have been funded from two sources: donations (from Elmgrant Trust, the Totnes Chamber of Commerce and from individuals), and the funds received in exchange for the old version of the Totnes Pound. A considerable number of the previous notes will never be redeemed, as they will be kept as souvenirs by visitors, or by collectors, and we have sufficient funds to meet the cost of any future redemptions of the third series of notes.
We are currently working to set up an electronic payment system for Totnes Pounds. As with paper Totnes Pounds, all sterling exchanged for electronic Totnes Pounds will be held in a bank account to provide certainty of value.
- Is it like a LETS scheme?
LETS (Local Exchange Trading Scheme) is a different type of local exchange model which is not exchangeable for Sterling: see http://en.wikipedia.org/wiki/LETS.
- What do you do to prevent fraud?
All of the denominated official Totnes Pounds incorporate a raft of the latest security features that make printing fraudulent notes very difficult and expensive. The number of Totnes Pounds in circulation are also monitored and regularly tested for authenticity.
- Can Totnes Pounds be spent outside the town?
While the scheme is clearly designed for use in Totnes and district, there is nothing to stop people from further afield using and accepting the currency. We actively encourage businesses and people based in the surrounding villages to participate.