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Denmark clears the way for cashless society

The Danish government plans to allow shops to decide for themselves if they want to accept cash payments.

Published: 6 May 2015 11:01 CEST

Denmark clears the way for cashless society

The government said it will be easier to run a business if the obligation to deal in cash is removed. Photo: Nikolai Linares/Scanpix

“Your money’s no good here.” If you hear that in the Danish shop in the near future, they’re not offering you goods on the house; they mean it literally.

As part of a growth package presented by the government on Wednesday, some Danish stores will be granted an exception from laws requiring them to accept cash.

The Danish Chamber of Commerce (Dansk Erhverv) said it was about time that shops be given the option of going cash-free.

“Society has changed so much that there is no longer a need for requirements on cash payments. Plus, cash has become tremendously expensive to handle due to security reasons,” chamber spokesman Henrik Hytolft told broadcaster DR.

The government’s proposal will still require supermarkets, doctors, dentists, post offices and pharmacies to accept cash – exceptions criticized by Hytolft.

“We hope that experience will show that you can also exempt the remaining businesses,” he said, adding that it only “a small minority” of Danes would be negatively affected by the no-cash rule.

If the government’s proposal is approved, stores could begin rejecting cash on January 1, 2016.

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Pictured is Norway and Sweden's border on the old Svinesund bridge.

Will the return of border shopping have a negative affect on the country? Pictured is Norway and Sweden's border on the old Svinesund bridge. Photo by Petter Bernsten/AFP.

In eastern Norway, particularly along the border with Sweden, cross-border shopping has long been common for residents looking for cheaper groceries and a better selection of products.

Norway’s Covid-19 rules effectively put a stop to that until this summer. The closed border meant a record year for food and beverage sales in Norway.

“Due to the fact that there was little action and that people did not travel, we noticed that our sales increased greatly during the entire period,” Øyvind Berg, production manager at Norwegian dairy firm Synnøve Finden, explained to public broadcaster NRK.

Now producers and supermarkets fear the impact of cross-border shopping being up and running again.

“Our challenge is that we see that more than half of the food and beverage producers, i.e. the industrial companies, fear that they will lose market share because cross-border trade will return in full,” Petter Brubakk, director of food and beverage at the Confederation of Norwegian Enterprise (NHO), informed NRK.

The majority of those who go shopping across borders in Norway will do so in Sweden. However, in the north, some will also venture into Finland or Russia.

Further south people will also travel to Germany or Denmark.

Why do people go to other countries for shopping?

Overall the main appeal of cross-border shopping is that its much better for consumers than shopping domestically.

Norway’s EEA agreement with the EU means that most foods, drinks, tobacco products, alcohol and other agricultural products are more expensive than they are within the EU as custom duties are required to import them into Norwegian supermarkets.

Not just that, but there is a much wider selection of products than in Norway due to laws that protect Norwegian products. For example, cheeses such as Cheddar are more readily available, cheaper and generally of better quality in other countries than those found in Norway.

READ MORE: What is ‘harryhandel’, and why do Norwegians love it so much?

Is border shopping a bad thing for Norway?

Norwegian businesses argue that crossing the border to shop affects the whole value chain, negatively impacting everyone from Norwegian farms and producers to supermarket employees, not just companies profit margins.

“My advice is to encourage Norwegians to buy Norwegian food, and help secure Norwegian jobs throughout the value chain,” food and agriculture minister Sandra Borch told NRK.

In addition, shopping domestically means more tax revenue for the Norwegian system to use to fund its generous welfare state.

While shopping domestically protects domestic jobs, shopping abroad protects jobs there, which rely on people hopping the border to get their groceries.

Coronavirus pandemic restrictions left a black hole in some of these economies reliant on shoppers from the Norwegian side of the border. For example, in Strömstad, a Swedish town close to the border where many travel to shop, unemployment rose by around 75 percent after Norway closed its borders with Sweden.

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