Canada To Stop Producing Pennies In 2013 362
First time accepted submitter master_kaos writes "Canada is going to stop producing pennies in February 2013 to help save the tax payers $11 million per year. Cash transactions will be rounded to the nearest nickel. Cheque/Credit Card transactions are not affected."
Excellent; (Score:2)
Re:Excellent; (Score:5, Informative)
As a Canadian I can tell you that the pennies will disappear quickly, because the banks have been told to collect them.
The place I get my morning breakfast has already started rounding to the nearest nickle. My breakfast comes to $3.66 total, and I am always asked for $3.65
I for one, say "About bloody time!"
Re:Excellent; (Score:4, Insightful)
What's a penny? What's a nickel? ;)
Here in Switzerland we have done away with them since a very very very long time ago. BTW a Swiss Franc is slightly worth more than a USD or CAD. I personally prefer it that way. Actually I prefer the debit transaction system we have. I can have a 100 CHF in my pockets and it will last me for about 1 to 2 months.
The one dollar bill of the US just confounds me.
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What's a penny? What's a nickel? ;)
Here in Switzerland we have done away with them since a very very very long time ago.
I guess Wikipedia is lying to me then, as it implies that the 1 rappen coin was in production until 2006 and the 5 rappen coin is still in production ("nickel" is the nickname of the USD and CAD 5 cent pieces).
The one dollar bill of the US just confounds me.
Good thing Canada doesn't produce dollar bills any more and instead uses the $1 loonie coin and $2 toonie coin.
The US has had a $1 coin in regular circulation since 1999 (and special printings in 1979-1981 before that). However, the government hasn't been able to convince people to use them instead o
Re:Excellent; (Score:5, Informative)
In Canada the banks were told to collect $1 bills and turn them over to the mint. It took about a year for the $1 bill to disappear.
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No, because the DERP squad is pumping out many megabytes of emails and Facebook postings that say "FWD: FWD: FWD: RE: RE: FWD: FWD Don't accept the dollar coins because they don't have 'In God we Trust'' on them!!!!!!"
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The US has had a $1 coin in regular circulation since 1999 (and special printings in 1979-1981 before that). However, the government hasn't been able to convince people to use them instead of dollar bills.
They don't have to persuade. They just have to stop printing dollar bills, and continue to withdraw used dollar bills that come into the banking system in a worn state. Problem solved.
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Here in Switzerland we have done away with them since a very very very long time ago
This is because in Europe the value-added taxes are built into the price, whereas here in Canada they are added to the price. As a result, you end up with an item priced at $6.99 costing costing $7.83 when it comes time to pay. You rarely see prices like that in Europe, so there's little use for a 'penny' or a 'nickel.'
I do question cashier's ability to cope, though. Even today, if I'm buying an item that is $7.83 and
Re:Excellent; (Score:5, Insightful)
I still can't fathom how posting "prices" that are different from what you actually pay may be considered a good idea.
It adds to customer confusion, cashier's work, and the benefit is... what? That it stresses how much the government gouges you for? That's not useful for anything but a political statement, and if so, it should note the credit card robbery as well.
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It adds to customer confusion
Not really. The only customers who are confused are tourists from outside North America. Everyone here understands that when the price says $6.99 they will be expected to pay more than $6.99 - So no, there's no confusion.
cashier's work
Well, the cash register does all the math so there's little extra work other than the 1.5 seconds it takes to count out four or less pennies.
and the benefit is..
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The only customers who are confused are tourists from outside North America. Everyone here understands that when the price says $6.99 they will be expected to pay more than $6.99 - So no, there's no confusion.
Which is a problem if you have only a small amount of cash on you, and don't know whether you're ok or you'll need to run to an ATM machine.
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This is because the cashier is required to balance their till at the end of the day, and a discrepancy of more than a tiny threshold in either direction will have
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Damn straight! As an American expat in Canada, I truly truly hate returning to the states and getting a wallet full of ones. Having $1 and $2 coins makes money so much easier to deal with. I say let's go the next step now: throw out the nickel and quarter, and give us a $.50 piece.
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Re:Hidden-ish cost (Score:5, Informative)
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Pay with a credit card then.
Re:Hidden-ish cost (Score:4, Informative)
1. The Currency Act [justice.gc.ca] already has provisions for jokers like you. The penny is not legal tender for a payment of over 25 cents. Similar limitations are in place for all coins.
2. Worn? You're talking about a steel disc. Pennies don't wear out, they get considered worthless and tossed in jars (or worse, the trash) and more need to be made to maintain its availability for circulation.
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This dreck is modded up to +5? Shame on you slashdot. This is Econ 101. If they could raise the price they already would have.
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If you RTFA, you'll see that the Canadian Mint his issued rounding guidelines. 1c & 2c round down. 3c & 4c round up.
Whilst clearly a business could try to ignore that and always round up, they'd tend to lose more trade through bad feeling than they could ever make up in stealing pennies.
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This is an interesting part. I've noticed recently there have been more and more places where the Cash price differs from the Credit price. It used to be this way growing up, and they're going back to it because of all the problems and costs associated with Credit. And yes, it's Cheaper to pay with Cash. (a few gas stations here charge 10 cents or more per gallon for credit over cash transactions.)
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Did you miss the part where it said only CASH transactions would be rounded? Seems to me that cash transactions themselves are becoming increasingly rare and this is a pretty big non-issue in a plastic money world.
Have you ever run a business? Having a books balancing issue because a even few transactions are in cash will encourage all prices to the nearest nickle. Its just too much of a hassle to have every transaction in the cash register off by a couple cents. Cash businesses would go nuts trying to get their books to balance.
Re:Excellent; (Score:4, Insightful)
If and only if I buy only one item. I buy 3, all ending in 9, and the total transaction ends in 7. Therefore rounding down to the nearest nickel. Whee!! I screwed xCorp out of 2 cents!
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I suggest your experience will prove to be atypical.
In most cases rounding will go UP by a penny or four, because of the tendency to price things at xxx.99.
Because taxes do wonder things to multiplying x.99 to things that also end in values that need to be rounded up. Sure.
To be clear, I'm being sarcastic.
[...] because retailers will round ALL prices up to the next nickle, whether payment is by cash, credit, or check.
Yes, I know the definition of rounding, but mark my words, nobody will be rounding down.
Except that rounding only happens for cash transactions. Debit/credit/etc pays the same not-rounded-to-a-nickle amount as before, regardless to whether the user would have saved or spent a few pennies more.
Hell, because of that rule, Canadians have more power to save money. Just debit when you'd have to round up, and pay cash when it rounds down!
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Depends on who is saving does it not?
If the idea was to save the government 11 million by dropping the penny, and government suffers from lower tax revenue as a result,
then the savings are imaginary at best.
They are bound to come back and raise the taxes to make up the difference.
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Re:Excellent; (Score:5, Insightful)
The reason the penny costs so much to keep in circulation is not solely the cost of minting. If a penny costs $0.02 to mint but is used in 10,000 transaction in it's life time that would be ok.
The problem with the penny is that they don't get spent. The mint needs to keep producing new ones for retailers to give out and people go home and throw them in a coffee can.
Oddly, this is the exact argument in favour of $1, $2, and $5 coins. People don't spend coins as easily, they tend fall between couch cushions or collect in jars. Until those jars are emptied, and the couch cleaned those coins are basically a kind of interest free loan the government.
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No, it's a problem. Negative seigniorage is a bad thing; a government expects to make money when it's making money.
Re:Excellent; (Score:5, Informative)
The higher denominations are always more likely to be spent though. If you have a jar of 1c coins vs a jar of $1 coins, a person is more likely to dip into the $1 jar than the 1c jar. Who wants to count out 1500c for a 6 pack of beer? I'd rather I with the 15 $1 coins.
As a side note, us Aussies got rid of our 1c & 2c coins years ago, hasn't hurt our economy, & our dollar is at US$1.05.
Re:Excellent; (Score:5, Funny)
1.03 this morning but I will assume you rounded to the nearest .05 as you Don't have Pennies.
Re:Excellent; (Score:5, Insightful)
Yes, you're right, it costs 1.6 cents per penny.
citation: metro news [metronews.ca]
No, that is not right. Your own source specifies that 1.6 cents is the MANUFACTURING cost, not the price of the metal in the penny.
If the metal in the penny was worth more than the penny people would be melting them down, as they did with gold coins. Clearly that is not happening.
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Sorry, totally my fault, I was reading too quickly and I didn't read the first part of your sentence - "The metal used to make"
Thanks for the correction, I don't want to mislead anyone.
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Yes, it did happen. Then they made it illegal. There's not enough money in it for that; if you're going to do something illegal to make money, you're going to want something that makes more money than this.
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You're looking at the wrong country. Canada's pennies were copper until 1997, when they went zinc, and then they went to steel in 2008.
US military did this (Score:5, Informative)
It's about time (Score:5, Insightful)
I have wondered for years how long it would take us Canadians to finally get rid of that awful piece of currency. Especially given that it takes more money to produce it than it is actually worth. No one can buy anything with pennies anymore and they really are nothing more than just metal wasting space. Plus, vending machines have never taken them which has made them even more useless than before.
Actually we stopped making them in 2012 (Score:5, Informative)
Re:Actually we stopped making them in 2012 (Score:5, Informative)
Actually, it's not unclear. Right in the Mint's website (linked to in the article): "Moreover, pennies can still be used in cash transactions indefinitely with businesses that choose to accept them."
The penny will remain legal tender for as the foreseeable future. As you stated, the only thing happening now is that the mint will no longer be distributing pennies after February 4th, 2013.
It's not mentioned on the website, but I have also heard that if you bring your pennies to the bank on or after Feb 4, they will be collected and returned to the mint where they will be destroyed.
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Meanwhile, in the USA, Gasoline at 9/10s (Score:3)
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Re:Meanwhile, in the USA, Gasoline at 9/10s (Score:5, Interesting)
I can't remember the last time I paid cash for gas in Canada. In fact, I think the only time in my life I paid cash for gasoline was in Florida when the pump wouldn't accept my Canadian credit card. I had to go in, give $50, buy my gas, and then go in again to get my change.
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A quick reprogramming of the pump will fix that to always increment in 5 cent increments.
So the first drop you pump, it would go from $0.00 to $0.05, then where it would've said $0.06-0.09, it would read $0.10. So the pump always magically rounds up.
Of course, if you ch
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Watch as millions of Canadians pump just the right amount of gas into their tank so that the price is always rounded down.
Hey, that's most of a plot for a Superman VII movie. Or, Captain Canuck #1, as it were.
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We still have 9 tenths of a cent per gallon on USA gasoline sales. Maybe we can look forward to rounding it to a penny.
In Canada, they still have variable tenths of a cent per liter, !
http://www.ontariogasprices.com/ [ontariogasprices.com]
U.S. too? (Score:2)
Though I'm not sure how much faith one can put into this article. I've tried looking for more concrete news about this, but I have yet to turn up anything. Anybody else hear about this?
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Though I'm not sure how much faith one can put into this article.
I would have approximately no faith in that article, because the way that the company who wrote it makes its money is by convincing people to buy precious metals, which means it's in their financial interest to spread stories that create a potentially false impression that US currency is worthless.
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They kindly provide a link to the "Original Source". It's a dead link, and to a site that doesn't look any more trustworthy than theirs.
It's all about zinc (Score:5, Interesting)
The US has pennies only because of lobbying from the zinc industry. [pennies.org] The U.S. Mint pays $0.011 [pennies.org] for a penny blank.
Ah inflation (Score:2)
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I'm fairly sure people will be able to convert their pennies to dollars if they have anything approximating a useful amount.
Wish the US would do this (Score:4, Insightful)
I hate pennies .. they are evil and need to be banished from the earth. But Americans would scream blue murder if the gubmint tried to take their precious away.
But the funny/bizarre thing is that the US public has already been conditioned to rounding the bill through the use of the give/take-a-penny trays in innumerable stores across the country.
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This reminds me of what happened when the $5 and over denominations were redesigned a few years ago. Tom Selleck, who turns out to be another crazy right-wing bastard, was interviewed and complained that our currency was now "funny money." No it's not... it was just redesigned, you prick.
Yeah... you'd see a lot of the same idiocy getting rid of the penny and it would all be complaints about how change (no pun intended) is bad.
The USA should accept reality too (Score:4, Insightful)
The penny is just as pointless in the USA as it is in Canada. Of course, the USA is considerably behind Canada in recognizing the changes wrought by inflation. In addition to abolishing the penny, it should abolish the dollar bill and introduce a $2 coin as Canada did many years ago. (If you wanted to be really far-sighted, you could establish a plan for when to abolish the nickel and the $5 bill and introduce a $5 coin.)
Unfortunately, currency reform would not only face stiff opposition from the zinc lobby (because penny is largely zinc now), but from the politically well-connected Crane Company in Massachusetts, which manufactures all of the paper used in printing US currency. The absurdity of vending machines and tollbooths needing to accept paper money (much more expensive than coins) counts for nothing as against a corporation with skilled lobbyists.
IMO, this is a bad idea (Score:2)
But that's just my 2 cents.
Other contries manages just fine without 'pennies' (Score:2)
Here in Norway we been doing this for years: - The 1 øre and 2 øre coins disappeared in '74 - The 5 øre and 25 øre coins were withdrawn in '84 - The 10 øre coin ended being legal tender in '92 - The 50 øre coin was withdrawn May 1st last year. So while I can still recall putting a 5øre coin in my piggy-bank, there is now no coins circulating that is worth less than 1 Norwegian krone... but you know what? The wast majority of Norwegians pay by card anyhow, and the prices ha
Australia did this years ago. (Score:5, Informative)
Australia got rid of 1 cent and 2 cent coins, and 5 cent coins are looking endangered. Nobody cares.
Retailers round the final total at the till, not the individual item prices, so unless you're just buying just one item your bill is just as likely to go down as up.(by a whole 2 cents maximum). Electronic transactions are not rounded.
We also replaced one dollar and two dollar notes with coins, again with no dramas.
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Correct! It's closer to 2.5 billion combined.
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I was correcting the statistic, not your assertion.
I agree that there are only so many resources to go around; consequently, prices will change based on the demand and availability of those resources until they reach an equilibrium. If there isn't enough copper *at all*, people will need to make due either without or with a substitute (or expensive reserves in the ground will be more appealing to dig up).
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Since when has a low inflation rate been a bad thing?
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It depends on what is causing the low inflation.
In America, right now, we have a huge overhang in housing, bad debt, and underemployed people. Because of low prices these things have been pulled from the market – but when prices go up these things pop back on the market driving prices back down. So, if you are trying to sell your house or your labor (or even trying to get a raise) it’s tough.
Japan has been struggling with this for a better part of a decade now. The Fed, via QE, has been dumping
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I dont know of anyone who pretends inflation doesnt exist.
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Well, since most pay raises many of us have seen over the last few years are below inflation, lots of employers are pretending it doesn't exist for their staff.
Re:Copper prices (Score:5, Informative)
There hasn't been any significant copper in a canadian penny since 1996.
94% steel, 1.5% nickel, 4.5% copper (as plating)
A big problem is that the penny is just useless. Nobody uses them, except maybe a handful of annoying old grannies who take 25 minutes to buy a cup of coffee.
So, they just get tossed into coin jars. Since they disappear from circulation almost immediately, and the government is (was) minting increasing amounts to make up for this. They don't get used either, just tossed into coin jars.
Those old copper pennies, from pre 1996, are worth ~2 cents, but the value of copper fluctuates pretty wildly.
The fact that there is such a thing as inflation is no shock to anybody, and not really a part of this story.
Death to Pennies (Score:3)
The video makes the very informative point that when you're fiddling around with actual physical pennies at the register you're wasting not only your own time, but the time of everyone in line behind you. The difference of plus or minus a couple pennies literally isn't worth the
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I really doubt this will happen. For the 3 to 4 cents you might gain it is just not worth the risk that someone might pull out their phone, calculate it and throw a major fit in your store. Even if no one ever throws a fit, word will get around, (See internet) and people will simply not shop at retailers who do this.
I usually have very little faith in people, but in this case I will tend to believe in honesty.
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Advertised price 9.96 = 10.00 (Score:2)
Re:Advertised price 9.98 = 10.00 (Score:5, Informative)
9.95 == 9.95
9.96 == 9.95
9.97 == 9.95
9.98 == 10.00
9.99 == 10.00
10.00 == 10.00
Re:Advertised price 9.96 = 10.00 (Score:5, Insightful)
No, Advertised price at 9.96 would round down to 9.95. Then the price should increase to 10.05 or so, then jump to 10.95.
http://en.wikipedia.org/wiki/Psychological_pricing [wikipedia.org]
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This.
Plus, the rounding will present such a hassle, that pricing will all be to the nickle, nobody is going to want to balance books that could be off by several hundred dollars over the course of a busy day.
All prices will end in 0 or 5 and no merchant is going to go down, everyone will just set prices directly to the next higher multiple.
More of interest, is the sales tax. Does Canada have sales taxes anywhere? Are they going to be adjusted to the nickle as well?
Will the tax authority accept taxes that
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The books will not be "off by several hundred dollars" because the rounding will go down 50% of the time, and up 50% of the time, averaging out to a net zero loss/gain.
What is this concept of rounding DOWN? I've never encountered that in the market place. Is it some new Canukistan voodoo?
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Sensible merchants would just use divisible-by-5 prices to avoid issues with rounding.
This doesn't always work. A common example where it doesn't work is grocery stores where certain items are sold by weight.
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it is just not worth the risk that someone might pull out their phone, calculate it ...
I have no idea what the antecedent for "it" is here. Calculate what? The price rounded down? How many people will need a smartphone to calculate a rounded-to-a-nickel price? Not many.
...and people will simply not shop at retailers who do this.
People will get over this pretty quickly, if they even notice the two or three cent price increase on every product that is currently ending in 1, 2, 6 or 7. People who buy 10 widgets that used to cost $0.67 and is changed to $0.69 will pay twenty cents more overall. Everyone who buys just one will pay three cents more than t
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it is just not worth the risk that someone might pull out their phone, calculate it ...
I have no idea what the antecedent for "it" is here. Calculate what? The price rounded down? How many people will need a smartphone to calculate a rounded-to-a-nickel price? Not many.
The need for calculation here is because we have a 13% "Harmonized Sales Tax" in Ontario, and various combinations of Federal and Provinical taxes across Canada depending on which province you're in. Thus, when you pick up a can of Pringles for $2.99, it really costs $3.38 after tax - which would round up to $3.40. If they mark the Pringles down to $2.97, after tax it's $3.36, which _should_ round to $3.35, but some retailers will try to charge $3.40 anyways, and blame the difference on "tax" - since the
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Cash registers are not going to show the rounded cost, there are going to show the actual cost. The rounding will be done manually IF you pay cash. The law stipulates rounding down for 1,2 and up for 3,4 cents.
Nothing changes except your change. The government collects the same taxes, the merchants balance sheet is the same, the ONLY change is the FEW cash transactions.
Re:Ask a stupid question... (Score:5, Informative)
Let's assume the transaction is right around $1:
0.98, 0.99, 1.00
1.03, 1.04, 1.05, 1.06, 1.07 = $1.05
1.08, 1.09, 1.10, 1.11, 1.12 = $1.10
It ends up working pretty evenly.
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Yes, when I can buy more than one item at a time. The rounding is on the entire transaction.
If the customer can buy 3 or more random items at a time, please demonstrate a pricing scheme that would consistently cause the customer to pay an extra $0.02.
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Oh, wait. No. That's impossible.
Jackass.
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The merchant can declare no such thing. Transactions ending in 1 or 2 round down to the 0. Ending in 6 or 7, down to the 5. Period, end of story.
And again, it is for the entire transaction. Over time, your personal purchases average out.
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When I was in Australia in the '90s, they had already eliminated their coins smaller than 5 cents, and the common practice was to always round down cash transactions. So, if your total was $1.99 and you paid with cash, you'd only get charged $1.95. If you paid with EFTPOS (debit card) or a credit card, you'd be charged the full $1.99.
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Why the transaction will ALWAYS be in the merchant's favor of course!
Depends. I suspect that "We always round cash down!!" will be plastered in quite a few front windows to try to attract customers. Of course it's easy for merchants to game the original price so this always works out in their favor. Depending on how much the CC companies are gouging the merchant, always rounding in the customer's favor might actually save both the customer and merchant money if more people pay cash.
In any case, I wouldn't really care. Given the amount of cash transactions I make every year,
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Not necessarily. In Finland they did the rounding too and I would sometimes get things rounded in my favor (not sure if Swedish rounding used). However the majority of the time with prepackaged goods the prices were pre-rounded anyway (and included tax). So the rounding that I noticed only came when buying something that had to be weighed.
Consider it this way. What do the stores do today if the actual price ends up with a fractional part of a penny left over? Is it rounded in your favor or towards the
Re:Bad move. (Score:5, Informative)
How so? The entire transaction is rounded up or down, to the nearest nickel. If you buy more than one item, that screws the 1 or 2 cent price fixing scheme.
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while it is entirely conceivable (and probable to occur) to rig prices to always cause a round-up, even with taxes... that really only applies for single item purchases where the final price can be exactly determined.. and then it's only for the cash transactions. overall, that combination of a single item and cash sale is probably pretty small. multiple item purchases will balance out, as their totals and whether they will round up or down can't reliably be determined ahead of time. and of course, non-cash
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I don't get it. I sell things. You sell things. Everyone rounds to nickels unless the transaction isn't using hard currency. Who is losing money?
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I don't get it. I sell things. You sell things. Everyone rounds to nickels unless the transaction isn't using hard currency. Who is losing money?
You sell something for [insert-your-favorite-currnecy-here]1.996. Customer pays 2.00, you can't give 0.004 back. Customer decides it's ok.
Now repeat it a thousand times per day.
This is 0.004 * 1000 * 30 * 12 = 1440.00 per year.
Since you declared in the invoice 1.996, you pay the tax for 1.996. That 1440.00/year incoming is not taxed, and when correctly masked by a good accountant, it's plain, untaxable profit.
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I get it the currency has lost value, just move the decimal point.
That's actually not so dumb. France did this in 1970 [wikipedia.org], except they moved two decimal points.
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The problem with that idea isn't that it doesn't make sense, but that it would have a negative psychological appeal. Everyone who isn't a 10+ millionaire would suddenly stop being a millionaire. Million dollar houses wouldn't be.
And who wants to work for $10,000 per year? Or work for 75 cents an hour on minimum wage?
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Next time know what you are talking about before you start typing.
From the Canadian mint website. The cost to phase out the penny is 37M, with as saving of 11M a year.
In only 4 years there is a profit.