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Britain's monetary system is based on the pound Sterling (£), which is made up of 100 pence (written as "p"). Britons also call pounds "quid." Scotland issues its own pound notes, but English and Scottish money are interchangeable. There are £1 and £2 coins, as well as coins of 50p, 20p, 10p, 5p, 2p, and 1p. Banknotes come in denominations of £5, £10, £20, and £50.

It's always advisable to bring money in a variety of forms on a vacation: a mix of cash, credit cards, and traveler's checks. You should also exchange enough petty cash to cover airport incidentals, tipping, and transportation to your hotel before you leave home, or withdraw money upon arrival at an airport ATM.

In Scotland, ATMs offer the best exchange rates. Avoid exchanging money at commercial exchange bureaus and hotels, which often have the highest transaction fees.

Frommer's lists exact prices in the local currency. However, rates fluctuate, so before departing, consult a currency exchange website such as www.oanda.com/convert/classic to check up-to-the-minute rates.

Major Change in Credit Cards

Chip and PIN represent a change in the way that credit and debit cards are used. The program is designed to cut down on the fraudulent use of credit cards. More and more banks are issuing customers Chip and PIN versions of their debit or credit cards. In the future, more and more vendors will be asking for a four-digit personal identification number, or PIN, which will be entered into a keypad near the cash register. In some cases, a waiter will bring a hand-held model to your table to verify your credit card.

Warning: Some establishments in Scotland might not accept your credit card unless you have a computer chip embedded in it. The reason? To cut down on credit card fraud. More and more places in Scotland are moving from the magnetic-strip credit card to the new system of "Chip and PIN."

In the changeover in technology, some retailers have falsely concluded that they can no longer take swipe cards, or signature cards that don't have PINs.

For the time being, both the new and old cards are used in shops, hotels, and restaurants, regardless of whether they have the old credit and debit card machines or the new Chip and PIN machines installed. Expect a lot of confusion when you arrive in Scotland or elsewhere.

In the interim between traditional swipe credit cards and those with an embedded computer chip, here's what you can do to protect yourself:

  • Get a four-digit PIN from your credit card's issuing bank before leaving home, or call the number on the back of each card and ask for a four-digit PIN.
  • Keep an eye out for the right logo displayed in a retailer's window. You want Visa or MasterCard, not Maestro, Visa Electron, or Carte Bleue.
  • Know that your Amex card will work where an Amex logo is displayed, but the card is not as widely accepted as Visa and MasterCard.
  • As a last resort, make sure you have enough cash to cover your purchase.

Getting Your VAT Refund

You can get a VAT refund if you shop at stores that participate in the Retail Export Scheme. (Signs are posted in the window.) When you make a purchase, show your passport and request a Retail Export Scheme form (VAT 407) and a stamped, preaddressed envelope. Show the VAT form and your sales receipt to British Customs when you leave the country -- they may also ask to see the merchandise. After Customs has stamped the form, mail it back to the shop in the envelope provided before you leave the country. Your VAT refund will be mailed to you.

Remember: Keep your VAT forms with your passport; pack your purchases in a carry-on bag so you'll have them handy; and allow yourself enough time at your departure point to find a mailbox.

Several readers have reported a VAT refund scam. Some merchants allegedly tell customers they can get a refund form at the airport on their way out of the country. This is not true. The form must be completed by the retailer on the spot, or you won't get a refund later.

For information, contact Global Refund, 707 Summer St., Stamford, CT 06901 (tel. 866/706-6090; www.globalrefund.com).

Note: This information was accurate when it was published, but can change without notice. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.