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Money Matters
The money
The official currency of Laos is the Laos kip (LAK), which comes in 100, 500, 1000, 2000, 5000, 10,000, 20,000, 50,000 and recently issued 100,000 kip notes. There are no Lao coins in circulation.
The interesting thing when you are in Laos and change your money is that you suddenly find yourself LAK millionaire.
The LAK value is rather low in comparison to other currency and exchange rate now is around 8,000 LAK to 1 USD.

Currency use
Although LAK is the country’s only official currency, Thai Baht and US Dollars are also accepted in many places, especially tourist areas. You will need a ready supply of kip notes for use in smaller towns and villages as well as for small purchases.
Prices for goods and services in the Lao PDR are required by law to be quoted in Lao kip. However, higher priced items may still be quoted in Thai baht or US dollars higher-priced items, especially in tourist hotels. Official bills and receipts are likely to be in kips as per the law.
Paying with cash in the Lao PDR can be confusing, especially for the first-time visitor due to the tiny value of one kip. Please, check the number of digits carefully before handling to avoid misunderstanding.
In the Lao PDR, paying cash is still best, in kip, baht notes or small US dollar bills. Upcountry, especially in remote villages it's advisable to pay in kip. In the cities, many hotels, tour operators and restaurants quote prices in dollars, or in all three currencies. Paying by credit card in shops and restaurants and some hotels usually incurs a 3% or more surcharge.

ATMs and Credit cards
Major credit cards – Visa, MasterCard are accepted at tourist hotels, restaurants and some shops in the main cities; some take American Express, JCB and Diners Club. Cash advances on credit cards may be obtained at bank branches and exchange booths if not accepted at ATMs.
Laos has several banks with international ATMs including ANZ Laos, JDB, BCEL, BFL and PSV which accept PLUS and CIRRUS network cards for VISA, MasterCard, and possibly JCB, Discovery and Diners Club. There are many ATMs in and around Vientiane now, including the Friendship Bridge. BCEL has machines in other provinces including Luang Prabang (also JDB), Pakse (where ANZ also has ATMs) and Vang Vieng. Phongsavanh (PSB) is in Vientiane and some other provinces.
ATMs dispense local currency (kips) in denominations between 10,000 and 100,000 with transaction amounts, fees and daily limits varying between banks.
ANZL allows up to 2 million kip ($250) per transaction with a 40,000 kip ($5) fee and an 8 million kip daily maximum. BCEL and PSV offer 1 million kip per transaction for a 20,000 kip fee; up to 2 million per day. JDB charges 30,000 kip per 1 million kip ($125) transaction, with a 4 million kip per day international card maximum.
Note that your own bank or card issuer may charge extra for foreign transactions too. Check before you leave home to get the best ATM card for use abroad. Some overseas banks refund local bank ATM charges.

Exchange money
There are banks located in all main towns and these can exchange all major currencies. The best rates can be found in Vientiane and Luang Prabang, where competition is higher than the rest of the country.
Traveller’s cheques can be cashed in exchange bureaus and banks, which can be found all over Laos and traveller’s cheques in US Dollars, are preferred.
Unless you want to keep Lao banknotes as souvenirs, change your kips back into baht or dollars BEFORE you leave. They cannot be exchanged outside the country, except at Bangkok Bank, Nong Khai, where you will get about 10% less than in Laos.

Cost
Laos is an inexpensive country to visit by almost any standards. You can live it up with a budget from US$15 to US$150 depending on your level of taste and comfort.
Street food is cheap and you can fill your stomach with around US$2. A meal in average restaurant costs you around US$5 to US$8 while it is more in gourmet restaurants.
Drinks in bar is quite reasonable with US$1 or US$2 for a beer, cocktail from US$2 to US$4.

Bargaining
If an item has a price tag then you're not expected to bargain. You are not expected to bargain in a grocery store or restaurant either. The main venues for bargaining are the local markets, where the price will probably be a little flexible, although not as much as in neighbouring countries.
Remember that in Asia ‘saving face’ is important, so bargaining should be good-natured. Bargaining is applied for both locals and tourist without exception. Bargain with a smile and a friendly attitude. The point of bargaining is not to make sure the merchant loses money but rather to get a price that both you and the merchant will be satisfied with. Often bargaining in Lao -- all you really need to know are the numbers, how much (tao die), cheap (took) and expensive (peng) -- will reap great rewards.
In some cases you will be able to get a 50% discount or more, at other times this may only be 10%. And once the money is accepted, the deal is done. Don’t be upset if you find someone can get better price than you did; it is about paying the price that is right for you.

Tipping
If you're happy with the services provided then some tip is appropriate. It's of great significance to the people who take care of you during your travels, inspires excellent service, and is an entrenched feature of the tourism industry.
Although in some hotels or restaurants, a service charge of 5% sometimes put on your bill but this money most likely not going to the pocket of workers. So, if you are happy with service provided, tipping should be given directly to the recipient.
The following amounts are per person suggestions based on local considerations and feedback from our past travelers:
In local restaurants, if you are a single diner, then a tip of around US$1 is appropriated. It is from 10% to 15% of your bill in the more up-market restaurants. If you are in group then depends on the group size, a gather of US$4 or 5 is good.
For drivers, we suggest US$5 if you are single traveler and an amount of US$10-15 from the whole group per day can be used.
For your tour guides or group leaders, tipping is much depending on their services. The amount is entirely a personal preference, however it is US$5-7 per day or US$2-4 per person in group tour is appropriate.
Of course you are free to tip more or less as you see fit, depending on your perception of service quality and the length of your trip. Remember, a tip is not compulsory and should only be given when you receive excellent service.