Croatia will introduce the euro as a legal currency on January 1st, 2023 thus becoming part of the Eurozone. This will bring multiple benefits for the Croatian economy. For instance, currency risk will be eliminated for citizens and companies, interest rates and transaction costs will decrease, and international trade in the euro area will be much easier.
Croatia introduced the National Euro Changeover Plan in December 2020 which enacted the Strategy for the Adoption of the Euro in the Republic of Croatia. The Eurostrategy is the basis for the document, as it provides an overview of all activities and obligations needed to be undertaken in the following period as part of the euro introduction preparations. We will bring you a quick summary of the important dates and the activities you need to take.
3 key phases in the euro changeover
There are 3 key phases in the euro changeover plan: period for preparation, dual display of prices and full adoption of euro currency.
- Until 5.9.2022. Preparation phase
- 5.9.2022. – 31.12.2023. Dual display of prices, both euro and kuna (after 15.1.2023. payments will be possible only in euro)
- 1.1.2024. Phase after the end of the dual display of prices and full adoption of euro
The main goal of the preparation phase is to ensure a secure transition to the euro, with minimal impact on the business environment.
The obligation of dual display of prices serves as a key measure for the prevention and protection of the customers regarding unjustified price increases or incorrect price conversion. Consequently, this will ensure that customers get accustomed to the new currency. During this phase, retail prices will be displayed both in the kuna and the euro. The guidelines suggest displaying the euro primarily, meaning the euro should be displayed to the left or on top of the prices presented in the kuna. In addition, the use of the EUR abbreviation or the € sign is recommended in the display of retail prices.
Online stores must display dual prices on:
- Homepage – if the customer can add the product in the cart
- Product page – also if the customer can add the product in the cart
- Suggested products – since it implies the action of purchasing
- Checkout and cart – the customer is near the completion of the purchase process so it is important to display the prices in euro
- Order confirmation – it is sufficient to display the final overall price of the purchase (it is not obligatory to display the prices separately for every product)
- Marketing and promotional pages
In addition, a fixed conversion rate should be visible next to the price, to ensure customers of correct price conversion. Present your prices clearly and easy to read.
Price conversion rules
Prices need to be converted according to the central fixed-rate (announced fixed rate 7.53450) in its full numerical expression. In the case of Croatia, this means that the fixed conversion rate will consist of one whole number followed by five decimals. The conversion of prices using the truncated fixed conversion rate is not permitted. The final central fixed rate will be released one month prior to the beginning of the obligation of dual display of prices.
After the conversion, the value is mathematically rounded to the nearest cent, i.e. two decimal places.
- If the third decimal is smaller than 5 (0-4), the second decimal stays the same, as does the cent amount
- If the third decimal is 5 or bigger (5-9), the second decimal is increased by one and the cent amount is rounded to the bigger cent)
Clients with eCommerce platforms
It’s important for all eCommerce owners to take preparatory activities and adopt their business systems for migrating to the new official currency. Every company needs to discover and address its obligations for the euro changeover. Accurate assessment of the impact on the business will significantly decrease the risks and challenges which can arise from this process.
The adjustments of IT systems require preparation in a timely manner. Due to the imminent demand increase, you should plan your activities and take into consideration the availability of Neuralab experts. Contact our team in order to plan and prepare accordingly for the adjustments.
Clients should also consider joining the campaign created by the authorities which promotes ethical euro conversion. The Ministry of Economy and Sustainable Development in cooperation with business associations will be leading the campaign, with the main goal of encouraging retailers to abide by the ethical code for the introduction of the euro and not using price conversion for increasing the prices at the expense of the consumers.
In return, retailers who carry good business practices will be granted the use of a logo representing their participation in the campaign and assuring customers of fair price conversion.
Neuralab production team will ensure compliance
Our production team needs to go through several steps in order to provide a wholesome and secure solution in the process of adjusting the eCommerce application.
- Analyze the web shop and locate the systems impacted by the euro changeover.
- Define and plan the scope of the adjustments.
- Determine the timeline for production and implementation.
- Test the adjustments in order to avoid errors and ensure security standards for the integration of the currency changeover, according to defined deadlines.
Neuralab can ensure the amenability of eCommerce applications with:
- Dual displaying of prices in the defined period
- Conversion of all product prices by applying the fixed conversion rate and rules of conversion (rounding to two decimal places)
- Displaying euro as official currency after the end of the dual display of prices
Additionally, Neuralab can incorporate the logo given by the ethical code.
Obligations & repercussions
With the introduction of the euro, some retailers will be tempted to abuse customer trust and increase their prices. The supervisory authorities (the State Inspectorate and other supervisory authorities) will intensively work on consumer protection, mainly the obligation to display dual prices.
In addition, there will be changes regarding the Customer Protection Act which will be valid from 28.5.2022. During the period of promotion or sales, it is required from the eCommerce online stores to display dual prices, the reduced price during sales and the lowest price of the product in the last 30 days.
Companies which don’t comply with the obligations will be blacklisted and reported for poor business practices and their names will be published at the official website (www.euro.hr). These blacklists can encourage companies to behave more ethically in the conversion process.
Customers are being invited to actively participate and file complaints against retailers who have incorrectly converted or increased the prices.