Tens of millions of mostly Australian coins in New Zealand are about to become redundant.

Massey University Banking Studies director Dr David Tripe predicts many people may be caught out when the Reserve Bank prepares to issue new 10c, 20c and 50c coins and scrap the 5c.

A Reserve Bank survey of coins in circulation has indicated about one in twenty small coins are foreign, predominantly Australian. These are identical in weight and size to NZ coins.

Dr Tripe says until now, no-one has really cared.

“Not only do they work in most parking meters and vending machines, shops either willingly or inadvertently accept them as payment and return them in change.”

But that is about to end when new, smaller coins are issued on July 31.

Vending machines and parking meters will be recalibrated to accept the new coins and could begin rejecting the old coins either immediately or after they are fully withdrawn on 1 November, when shops will no longer have to accept them.

After that only the Reserve Bank will exchange the old NZ coins. It will not, however, exchange Australian coins. Trading banks will decide for themselves whether or not to accept the coins.

Dr Tripe predicts there may be a flurry of activity as people sort out jars of coins and take them into banks to exchange, only to find that they are handed back any foreign coins.

“Most banks will not knowingly accept Australian or any other country’s coins unless they have a special arrangement with the customer,” he says.

“I expect many people will then try to dispose of these coins either while shopping or in parking meters and vending machines.

“But they should be aware that they are probably technically guilty of fraud if they knowingly attempt to pass off foreign currency as New Zealand’s – that includes putting an Aussie 20c in the parking meter or handing it over the counter as payment.”

Dr Tripe says shoppers should also know they have the right to refuse to accept foreign coins as change.

“My impression is that the number of foreign coins has increased with the huge growth in international travel in recent decades.

“It is also probable that a large number of New Zealand coins are circulating in Australia – we don’t know how many – which may cause problems over there in due course if they too decide to mint new, smaller coins.”