In response to my last post, Angelo Melino (University of Toronto) sent me to this post, which informs us that Canadian Tire money might soon meet a sad end.
For non-Canadians, Canadian Tire money is issued by the Canadian Tire Corporation, which operates ubiquitous retail outlets across Canada. A Canadian Tire store looks something like a Sears. They sell hardware, auto parts, miscellaneous department store items, cheap auto repairs, gasoline, and of course tires. Canadian Tire notes come in denominations from 5 cents up to 2 dollars, and are issued to you when you purchase something at a Canadian Tire store. In the old days, one would receive 5% of the value of the purchase in Canadian Tire notes, but the rebate has fallen to 0.4%. My memory may be faulty, but I think it was the case (and may still be the case) that one could never be rid of Canadian Tire money, except in the limit, or by virtue of free disposal, as you would receive the rebate even if you made the purchase with Canadian Tire money.
Now, the experience with Canadian Tire money can tell you something about what the promotors of Bitcoin are up against. As you can see here from this 10-cent note, issued, I believe, in the 1980s, Canadian Tire money looks pretty convincing. Canadian Tire has actually gone to some trouble to design the note to avoid counterfeiting. It has a serial number on the back, and a detailed picture on the front of Sandy McTire, the thrifty Scot. Further, as stated on the note, it is redeemable in merchandise (at the Canadian Tire store of course), and to hammer that home, that's stated in both official languages. Thus, Canadian Tire money has Bitcoin beaten on at least two dimensions. It looks something like government-issued currency, which would encourage adoption, and it is a promise to pay something specific on redemption. Further, redemption is not difficult, as essentially any reasonably-sized community in Canada has a Canadian Tire store.
So, you might think that Canadian Tire money might circulate, and be accepted in transactions other than purchases of goods and services at Canadian Tire stores. Not so. There is the odd anecdote, including the one in this Minneapolis Fed Quarterly Review paper by Eichenbaum and Wallace about circulation of Canadian Tire notes but, as most Canadians will tell you, Canadian Tire money tends to sit in desk drawers and closets, and not in wallets. Further, serious experimental evidence strongly supports the view that Canadian Tire money not only does not circulate, but tends to accumulate in hordes that cannot be found when it is time to visit the Canadian Tire store.
One experiment was carried out by yours truly and Mike Stutzer. Stutzer and I designed the experiment. I supplied the Canadian Tire money from my desk drawer, and Stutzer did the field work. Stutzer took a sailing trip from Duluth Minnesota to Thunder Bay Ontario, and attempted to pass the notes in various Thunder Bay bars. As Mike will attest, he got plenty of laughter, but no beer in exchange for his Canadian Tire money.
Of course the problem may have been that Mike tried to exchange the notes in a manner that was most likely to be met with laughter and no beer, as Stutzer may be one of the funniest people on the planet. Mike is a native of St. Louis Park, Minnesota, in a cohort that included Joel and Ethan Coen, (sons of Edward Coen, one-time professor of economics at the University of Minnesota) and Al Franken. St. Louis Park is in part the subject of A Serious Man, and filming took place there and in other Minneapolis suburbs. What is it about a time and place that makes people funny (or maybe people from St. Louis Park have always been funny)? I don't know.
In any case Canadian Tire money is sadly not what it used to be, and may meet its end. In addition to being issued in smaller quantities, it can no longer be redeemed in gasoline, and seems to be shunned by a younger generation of Canadians. Soon, Canadian Tire money could fade from memory, much like the Diefendollar.