Euro
Envy
By Peter Hyman
East Village Wines, on First Avenue
between St. Marks Place and Ninth Street, is the type
of place where the co-owner inquires about his customer's
“sweethearts” and runs product giveaway contests for
the most original palindrome. The store has been a fixture since the early 1960s, long before
the neighborhood became a haven for iPod-laden hipsters
and overpriced walk-up studios. But
as the East Village has become more gentrified, so to
have East Village Wines' fiscal policies. To
keep pace with a globetrotting clientele, the store accepts
and exchanges Euros, the currency that unites the 12
nations of the European Union and is currently slapping
the dollar silly.
The store's Euro guidelines were
initiated by co-owner and currency buff Bob Chu three
years ago, when the Euro debuted in paper form (it has
existed as an electronic trading device since 1999).
“We're not a bank,” said Chu, a stocky Chinese-American
with salt-and-pepper hair and a thick Bronx accent. “It's
just a friendly bartering system. But
you gotta take care of your customers.”
The store does not advertise this
practice, though most of the regulars know of the arrangement.
For those who are not aware, a small chalkboard near
the cash register states the offering as well as the
novel rate of exchange with matter-of-fact clarity: One
U.S. dollar for every one Euro.
Customers traveling to Europe can
thus convert enough pocket money to get them to their
initial destinations at a tidy profit, compared to rates
given at a bank or airport kiosk (the current exchange
rate is $1.30 for every one Euro). Those returning from abroad can put the
Euros they inevitably bring back toward a robust potable
instead of tossing them into a drawer, though with the
one-to-one rate doing so does cost a premium. Many, however,
seem undeterred by this: The store's yearly Euro take
exceeds €30,000.
“By the time you add the bank's
commission and the hassle of waiting in line, converting
Euros back to dollars is not worth it,” said a corporate
lawyer for a large financial services institution who
visits Europe five times a year and is a frequent Euro
spender at the store, and who wished to remain anonymous.
“And besides, if I don't use them here, I'll stash them
away and forget where they are.”
On a recent visit to East Village
Wines she had Euros left over from a holiday to Greece.
She decided to use the overage to fund the acquisition
of two bottles of organic wine—a 2002 Bordeaux and a
1999 Cabernet Sauvignon from Washington state.
The blonde thirtysomething, dressed
in blue jeans, a black nylon coat trimmed with fur, and
a grey Cossack hat, carried her selections to the front
of the store. After
a few minutes of small talk with the friendly clerks,
she placed a wrinkled fifty Euro note on the Formica
countertop.
“The total comes to $30.39, with
tax,” said co-owner Tom Chu, Bob's older brother, as
he nonchalantly took the currency, bagged the bottles
and handed over her change, in U.S. dollars.
While most of East Village Wines'
Euro transactions go as smoothly, the Chus do see their
share of hagglers. In
fact, they recently set an unofficial €100 limit on purchases
in an effort to deter customers inclined to protracted
rate negotiations.
“They're not buying a house here,”
Bob Chu said. “It's
only wine.”
Accepting a wider range of currencies
also increases the store's exposure to potential fraud. So
far, however, only one person has attempted to pass a
counterfeit Euro note. The eagle-eyed Bob Chu spotted the forged
fifty, questioning its authenticity but deciding not
to report the man to the authorities.
Not that the brothers Chu have any
reason to worry. According
to the U.S. Department of Treasury, East Village Wines'
currency activities are perfectly legal. Foreign
exchange–“FX” in the vernacular of Wall Street—is one
of the least regulated market activities, and there are
no laws prohibiting a merchant from exchanging Euros
(or, for that matter, British Pounds, Japanese Yen or
Mongolian Tugriks). In terms of sales, “a retailer can
accept paper clips for a good or service he provides,
if he so chooses,” said a Treasury spokesman.
Given
the dollar's current status, paper clips might be an
attractive alternative for Americans shopping overseas. For
East Village Wines, the weak dollar has increased the
frequency of Euro transactions and the overall gross
value of their Euro-based take. “We've seen a bump in
Euro activity, for sure,” said Bob Chu. “But
whatever we're making, we're giving back on the other
end.” Most
of the store's suppliers are Europeans who demand to
be paid in dollars, so import costs have increased by
more than 25% since the dollar began its downward slide,
in the last quarter of 2004. In the currency game,
sometimes a player cannot win for losing, no matter how
a nice a guy he is.
Peter Hyman's first book, The Reluctant Metrosexual: Dispatches
from an Almost Hip Life, was published in August by Villard.
Copyright, 2005, The New York Observer
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