Scrip

From Academic Kids

Scrip is any substitute for currency, which is not legal tender. Essentially, it is money which can only be used with one company, association or group of companies.

Contents

History

Originally, scrip was what employees were "paid" with, particularly in the West of the United States, where everything in a mining or logging camp was run by the company. Workers would pay for meals with scrip, and for goods at a general store. In large part, this was meant to make workers completely dependent on the company, thus enforcing their "loyalty" to company. As the labor movement in the U.S. gained force, a number of states banned the practice and required all wages to be paid in cash or in checks or other instruments redeemable for cash.

While scrip has well-deserved bad reputation, it does have some redeeming qualities. Scrip can be created as a means of payment in times and countries where regular money is unavailable (such as in a frontier area) or untrustworthy. Companies can refuse to redeem scrip from people who cannot explain how they obtained it, thus making scrip unattractive to criminals.

Modern use

Scrip is now issued in the form of gift certificates, which have recently almost completely been made obsolete by gift cards. The two are essentially the same, except that the cards automate the checkout and accounting processes. Cards usually have a barcode (mostly Code 128), but many have a magnetic stripe, which can often be processed through a standard electronic credit card machine.

Cards do not have any value until they are sold, at which time the cashier enters the amount which the customer wishes to put on the card. This number is rarely stored on the card, but is instead noted in the store's database. The major exception is in many public transport systems, and public library photocopiers, where a simplified system (with no network) stores the value only on the card itself (a stored-value card). To thwart counterfeiting, the data is encrypted, though not very strongly given the relatively low amounts of money involved. The magstripe is also often placed differently than on credit cards, so they cannot be read or written with standard equipment.

One music store chain in the U.S. (Turtles Music, bought out by Blockbuster Music) even used gift coins, the same way old scrip was used. This was relatively successful, given that coins are hard to forge, and there is a tactile sense of value.

The retail "sale" of such certificates, cards, or coins is not considered to be an actual sale, and thus is not normally subject to sales tax, nor is it reported in a company's sales figures, or subject to any coupon or other discount. When they are used to purchase an item, they count as tender, the same way that any other form of payment would.

Criticism

While considered a "lazy" gift by some, modern gift scrip is generally intended to be given by persons who wish to get the recipient something thoughtful, but don't know what the person wants. Some point out that trading real money for scrip is rather pointless, as it then ties up that money until it is used, and usually may only be used at one store. VISA has been issuing pre-paid cards (not connected to any bank account) that can be used anywhere that accepts VISA credit cards or debit cards, although some view this as even more pointless, as cash works almost anywhere.

Another bane to consumers is that stores will often "steal" value from the cards, particularly if they are not used after a certain period of time. Some even "expire", considered by some to be an outright theft. In July 2004, Rhode Island passed a law prohibiting such actions against consumers in that state.

Collections and study

When a given scrip gains some historical or social importance because of its fame or notoriety, it can become a subject of study in Numismatics and /or be traded for something other than its original value on a collectors market, as is the case with the Disney Dollar.


Scrip also refers to the items carried on a pilgrimage in Roman Catholicism.

External links

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