Dollars versus Pesos in Cancún

Everywhere you look, especially in Cancún, you will find the prices given in US dollars and pesos. Bars, grocery stores and tour operators will accept the US dollars in payment. Even the drivers and waiting staff will accept tips in dollars, so why bother using pesos at all?



This is a phenomenon that generally only affects American vacationers. Those from other countries have to exchange their currency anyway, so do so into pesos, as this avoids having to pay charges twice. Many Americans quite happily spend their whole vacation in Cancún without once having to handle a peso. However, this does limit them to staying in the Hotel Zone or else visiting Downtown Cancún. Elsewhere in Mexico, outside the main tourist areas, dollars would not be accepted.

There are obvious benefits for the American tourist here. The inconvenience of having to mentally calculate the exchange rate, or work out what coin relates to what, all goes away. They can just relax and get on with their vacation in paradise. If the area accepts your own currency then why not use it? Arguments that Mexican tourists in DisneyLand couldn't pay in pesos are neither here nor there. DisneyLand doesn't accept pesos; but almost everywhere in Cancún does accept dollars.

For the Mexican locals, the situation is slightly murkier. For workers, the minimum wage is the equivalent of about $4 USD a day. Their tips are viewed as a portion of their wages, therefore they are relied upon in order to take home a living salary. If they didn't accept the dollars, then they'd have no tip at all. It's a case of necessity. For those living outside of the tourist areas, they have to shoulder the exchange charges themselves, as they change your dollars into Mexican pesos. For those living and working in Cancún, then its slightly less problematic, as they can just do their own grocery shopping in dollars. Unfortunately, they can also see the Mexican prices, which will work out at less.

Therein lies the crux. While everyone from the large stores to the roadside taco vendor will accept American dollars, it will not be at a favourable exchange rate. By handing them a US dollar, you've effectively passed on a charge. They will reciprocate by ensuring that the rate is included in the price of whatever you're paying for. In fact, many people with calculators and knowledge of the current exchange rate have noticed a tendency for merchants to round down the rate. This means that you are paying more in dollars than you would have been had you just changed it to pesos in the first place.

At the time of writing, the exchange rate is $1 USD to $12.8 MXN. However, you will only find vendors willing to accept $1 USD to $10 MXN. In short, each time you purchase something in dollars, you have lost out on $2.8 MXN; for every $4.5 USD handed over in Cancún, you have lost $1 USD. This can very easily add up, over the course of the vacation, to a huge amount of money just thrown away. Let's compare them. In this scenario, you've saved up $100 USD as spending money for your Cancún vacation.

$1 USD = $12.8 MXN: $100 USD = $1280 MXN - 2% bank charges (25.6) = $1254.4 MXN
$1 USD = $10.0 MXN: $100 USD = $1000 MXN

= Loss of $254.4 MXN (nearly $20 USD) in your spending money by paying in dollars on your vacation.

Now multiply that by amount that you're really taking. By the time you hit $500 USD, you will have thrown away nearly $100 USD. Fair enough, if that is the price that an American tourist wishes to pay for convenience.

However, this equally leaves your waiter, with your one dollar tip, with a dilemma. (S)he can now use it to buy items at higher prices than the same in Mexican pesos; or else go to an exchange booth and pay the charge to have it transferred. (They don't do this at a bank, as a Mexican cannot have a US dollar bank account. But no-one worries about this, as the booths often have a better exchange rate than the banks anyway.) A tip, by its very nature, cannot include a mark up price to negate this charge. What many do to resolve this is to hold onto their dollar tips until the exchange rate is extremely favourable. By doing this, it might take weeks to end up with money in their pocket, but they may well gain a couple of extra MXN pesos when they do cash it in. For those with financial savvy, this can end up being quite a bonus, as the peso is usually weaker in comparison with the American dollar.



One of the main criticisms of changing money into pesos is that the banks and ATMs don't give out small bills. You want to tip in pesos, but your trip to the exchange has only left you with $100 peso bills and you're not tipping anyone with that! It is worth noting that there is a trick to this. When you request money do so with an uneven amount. The tills and cashiers will try to match the highest amount that they can, but that is reliant upon you making it easy for them. If you've asked for $99.99 pesos, instead of $100, then you will receive a portion of that in coins or smaller bills, because it can't be rounded up into a large bill.

For those rich enough to still insist on paying in American dollars, then please note that they have to be crisp ones. It is best to contact your bank several days in advance to arrange to collect dollars. Most banks just recycle whatever comes through the cashier's till, which can include folded, torn, dirty, written upon or otherwise vandalised dollars. Once a week, banks tend to have an influx of pristine bills and these are what you will need to take to Mexico. The reason is that many of the exchange offices there will only accept pristine bills, therefore these are what the vendors will accept too. The nicer that your bill looks, the more readily it will be accepted. Also most vendors in Cancún will not accept American $100 bills. This is because there has been a recent outbreak in fake bills at that amount.

For those who wish to have extra spending money by switching to pesos, then the exchange rate is fairly uniform across Cancún. The airport is traditionally unfavourable, while Walmart, in downtown Cancún, traditionally offers the best exchange rate. Otherwise, everywhere is much of a muchness.

How to Haggle for Goods at the Mercado

The mercados (markets) of Mexico may be a very different experience to what many Western people expect from the markets back home. Those used to the ability to wander around speaking to no-one, looking at shops with fixed prices on their items, will find themselves in a different world. This is not how it's done in Mexico.



The mercados may be in a static location, Mercado 23 and Mercado 28 in Cancún spring to mind; or they may be ad hoc ones, which set up for the day then completely disappear at night, like those around the Mayan archaeological sites. Either way, they work the same.

This is undoubtedly the place to test out haggling skills. This is the Mexican way in markets. You will be approached constantly on the street and invited into shops to see the merchandise. If you take up the offer, then this is where the fun begins. You may be given something free, like a shot of tequila, to win your interest. Their first offer will probably be up to twice as much as the item is worth. Your job is to do your maths and state a price much less than the item's value. This is a competition and a battle of wills. You will probably be told many stories to encourage you to buy or to raise your price. If your price does remain way too low, then they will refuse to sell it to you. It's a case of forming your strategy, going in prepared for a period of haggling and paying only what you're comfortable paying. Along the way, you will have taken part in an aspect of Mexican culture and will definitely have stories to tell back home.

Places like Mercado 28 should be entered with a hunter's spirit. None of it is aggressive, so the expectation that the best haggler wins will make every good purchase feel like a winner's trophy. Those who are happier with their native culture of fixed prices would be better placed at Flamingo Plaza, which caters more to tourists. Those with the knack of haggling return to Mercado 28 time and time again, reporting that it is a lot of fun. They also report that it's the cheapest place in the city, once the correct price has been settled. For those used to the souks of Marrakech, this market will seem tame; for those more at home in passive Western hypermarkets, it will be shopping at its wildest. The question is, are you up for the challenge?

Winners arm themselves with information. Here are your tips on how to haggle for goods at the mercado.

Preparation

1, Know your prices first. If you are after a certain item, then shop around in the big stores before you go to the mercado. Then you can judge what is a fair price and when you are getting a bargain. This also forestalls the shock of finding it cheaper in the plaza next to your hotel.

2, If anyone in your party speaks Spanish, then this is the perfect moment to use those skills. A Spanish speaker automatically gets a slightly lower price, mainly because the seller isn't being forced to haggle in a second (or third, if Mayan) language. So don't let your Spanish speaker lounge by the pool, you need them at the mercado.

3, Change your money into pesos first. Find out the exchange rate for that day, so you know, in advance, precisely how much the peso is worth. While in the mercado, pay only in pesos (you'll get it cheaper), though most vendors will take crisp American dollars. An American dollar which is crumpled or torn might be turned away, while foreign small change will definitely be unacceptable. It is better by far to pay in cash and for that cash to be pesos.

4, Do not take your credit card. While most mercado stores will take credit cards, you may have a shock when you get home, to discover that the amount charged is higher than expected. Most vendors are very honest, but you might not be able to distinguish from them the occasional bad egg, who might be very inventive with the exchange rate.

5, Take your own calculator. You will be dealing with people who do complicated mathematics all day long. They will demonstrate their figures at lightning speed on their own calculators. You have no way of knowing if those calculators have been 'fixed', especially in regard to the exchange rate. Remember that their aim in this game is to receive as much money as possible, while yours is to pay as little as possible. Therefore make sure that you're the one armed with the calculator and that you use it to check your own figures.

6, Pick your time. The best bargains are to be gained at closing time at the attractions; or the beginning of the day at the static mercados. Those selling at the attractions often have to cart all of their stuff home again on their backs or on bicycles, so they would rather sell it to you instead. Those selling in the mercados have the advantage of leaving their stock on site or else driving away in vehicles. There is, however, a superstition that the first sale of the day bodes well for the rest of it, therefore they will be more inclined to bargain in your favour then.

Entering the Mercado

1, If someone calls out, '1 dollar! 1 dollar!', then they usually mean a Mayan dollar. This is roughly $10 USD.

2, If you do not wish to buy nor be enticed into a shop, then a polite, 'no gracias', coupled with walking on by will usually work just fine. For really persistent vendors, then there have been reports that saying, 'yo vivo a key' (I live here) will make them lose interest. This is also helped if you look casual and not so 'touristy' at the time. In their minds, local people more likely to know how drive a hard bargain for items, while the rich foreigners will pay well over the odds, as they don't know how to play the game.

3, Always remain polite and light-hearted. You won't be having fun, if you let yourself feel beseiged; and they aren't deliberately being rude. The more harassed that you look, the greater the neon sign above your head flashes, 'foreigner who doesn't know what to do!' and the more interest vendors will take in you.

Preparing to Buy

1, Fix your price in your head, while you ask for the vendor's price. Never let on what you are initially prepared to pay.

2, Vendors will be prepared for a 25% discount on their goods. Whatever price you are offered, deduct 25% and that is what you're reasonably aiming for. At the Mercado 28, you can deduct 50%.

3, Never let on when you have a price you're willing to pay, if it seems the vendor will go lower.

4, Feign disinterest if the price quoted is too high. Walking away will often lower a price instantly.

5, Watch out for your non-verbal signs. It's no good saying, 'no, I'm not interested', when your eyes are glinting with want.

6, Be prepared for a long period of haggling, but remain polite and light-hearted.

7, If the price remains too high for you, then walk away completely. You are under no obligation to buy, no matter how many glasses of tequila you've been given, nor what sob stories you've been told. They won't respect you in the morning for giving into the drama now.

8, If the price remains too low for them, then they are equally under no obligation to sell to you. If you've hit a brick wall, then that is their lowest price and they do have a livelihood to make. This isn't a charity event.

9, Once you have agreed on a price, work out via your own knowledge and mathematics what that is in your native currency. If you're happy with that, then pay in pesos and pat yourself on the back for a successfully haggled bargain!

A final word about the mercados at the Mayan archaeological ruins. At some places, like Tulúm, the mercado is outside the gates and could be avoided if desired. At others, like Chichén Itzá, the inner pathways are lined with sellers. There is a reason for this. The villages around Chichén Itzá are exclusively Mayan, but also very poor. When the ruins were opened up for tourism, these people watched distant owners and tour operators getting very rich on the proceeds, but none of it was trickling into the local community. In the grip of poverty, these people argued that all of this was being done around their own ancestral buildings and artifacts, dispossessing them in the process. After a prolonged struggle for justice, they earned the right to set up their mercado inside the ruins. Everyone you see selling items inside the ruins will be a local Mayan villager, as no-one else is allowed to do so.