Accidental Blogger

A general interest blog

A pizza company in Texas is in trouble with some patriotic US citizens.  Its crime?  "Pizza Patron," a Dallas based pizza chain (five stores in Houston), made the decision to accept Mexican pesos as payment for pizzas. Many of Pizza Patron’s restaurants are in areas with significant Mexican / Mexican American clientele who often have left over pesos after their visits to Mexico. The practice has raised some hackles and considerable patriotic / anti immigrant fervor. The company is hearing from irate Americans via email and occasionally in person.

Pizza "Pesos for pizzas. It seemed innocent enough. But after a Texas pizza chain this week began accepting Mexican pesos in exchange for piping hot pies, the company was flooded with thousands of e-mails.

"What you are doing is unpatriotic. THIS IS AMERICA NOT MEXICO!" one message read. "Get the hell out of this country!!!!" said another. "This is America where the currency is the U.S. Dollar. If you want to accept the peso, go to Mexico!"

But for Elizabeth Perez, who on Friday was awaiting her pizza order at a Pizza Patron restaurant on Airline Drive in Houston, it just makes good business sense. Why not, she said, spend leftover pesos in the United States instead of waiting until she returned to Mexico?

"We always have a lot of money left over when we go to Mexico, so why not waste it here?" Perez said.

Dallas-based Pizza Patron chain, with five restaurants in Houston, said it’s pesos-for-pizzas campaign has been an overwhelming success. But the promotion has also stirred a wave of anti-immigrant feelings. At a restaurant on South 75th Street this week, a man entered the store and asked what currency was accepted. When the manager said he could pay in pesos or dollars, the man said, "Pesos are for Mexico and we’re in the United States." Then he left the store.

Andy Gamm, a Pizza Patron spokesman in Dallas, said he was taken aback by the protest. He said the small pizza chain never intended to get in the middle of the national immigration debate, but is undeterred by the controversy.

"We have no intention of stopping it," he said. "We’re happy, we couldn’t be happier."

He said most of the negative e-mails are anonymous, and though many say they will no longer patronize the business, many come from states where Pizza Patron does not have any locations. The chain has 59 locations throughout the Southwest, including the five in Houston.

"A majority of the negative e-mails we’ve been getting are coming from states like Connecticut, North Dakota, Indiana and Ohio, states that aren’t known for having strong Hispanic demographics," Gamm said. He said Pizza Patron has been doing business in the Hispanic community in Dallas for 20 years and that 60 percent of its customers are Hispanic.

Once just a joke

Over the years, he said, customers would come into the stores and jokingly ask if they accepted pesos. Gamm said company officials finally asked, "Why not?" and began posting "Aceptamos pesos" signs on store counters.

"If we could get those pesos that were sitting in a drawer at home, get them out of those drawers and in our stores we would be on to something that would be difficult for competitors to duplicate," Gamm said.

He said the practice of accepting pesos for goods is common along the border, but nonexistent hundreds of miles farther north. Gamm estimated that 10 to 15 percent of Pizza Patron’s business this week has been in pesos, making the effort worthwhile. The chain will evaluate the promotion in February and determine whether to continue it.

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3 responses to “The Color of Money”

  1. I’m curious as to what Pizza Patron will be doing with those collected pesos- it doesn’t mention it anywhere in the article. Will they just exchange it for dollars, and report the earnings and pay taxes on those? Or will they have some kind of forex business setup for people who are travelling between US and Mexico?

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  2. Anna

    It’s interesting you should mention forex, Sujatha, since Guelaguetza, a chain of three Oaxacan restaurants here in LA, operates a money wiring business out of at least one of those restaurants. Not sure if Guelaguetza exchanges money, and it doesn’t accept pesos, so far as I know, but then it’s never come up. I could imagine, in theory, a business model in which Pizza Patron would operate as an exchange and money wiring business, taking dollars and sending pesos back to relatives in Mexico, but based on my experiences in Mexico, I would have thought many of the relatives back in Mexico would rather have the dollars than the pesos.
    The other thought that comes to mind, of course, is that the company might use the pesos to pay workers who don’t have the clout to demand dollars because they’re undocumented.
    The Ockham’s razor answer is that Pizza Patron just exchanges the pesos for dollars, and the value of the increase in business attributable to accepting pesos is greater than the value lost in the exchange.

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  3. Anna,
    The Ockham’s razor answer is correct. The Austin-American Statesman reports in its article: “Many Pizza Patron customers have pesos “sitting in their sock drawers or in their wallets,” Gamm said. “We’re talking small amounts, where it would be inconvenient to stop and exchange on the way back — maybe 10 or 20 dollars’ worth of pesos.”
    The promotion will run through the end of February and then be re-evaluated, Swad said.
    In the first week, payments in pesos have accounted for about 10 percent of business at the five restaurants operated by the corporation, Pizza Patron said. The others are franchised, and the company will not get reports until the end of the week.
    The company has set a conversion rate of 12 pesos per dollar, which is slightly higher than the official rate of about 11 pesos per dollar. Any change is given in U.S. currency.”
    So they are taking a small loss in the slightly higher than official conversion rate, but not much more than they might have had with a discount offered on their pizzas.
    As you said, the gains overall ( business and increase in Hispanic goodwill) may more than offset this discount offered.

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