This article was posted in Time and I've copied same without the paywall / ads. House Passes Common Cents Act to Help Phase Out Penny Since the final batch of American pennies for circulation was minted in November last year, consumers and businesses across the country have resorted to various ways of managing transactions pennilessly. A bipartisan proposal, however, offers to standardize the process in support of the smallest-value coin’s phaseout. On Tuesday, the House of Representatives passed the Common Cents Act, which would introduce rounding guidelines for cash transactions when exact change is unavailable and would legally end penny production other than for sale as numismatic or collection items. Under the bill, the penny would remain legal tender and would keep its one-cent value, but the bill outlines how persons and businesses may—but are not required to—round cash transactions if exact change cannot be provided. Generally, if an amount has 1, 2, 6, or 7 as the last cent digit, it can be rounded down to the nearest nickel. On the other hand, if an amount ends with 3, 4, 8, or 9 as the last cent digit, it can be rounded up. For small-amount transactions worth $0.01 or $0.02, the amount may be rounded up to $0.05 for those seeking to pay with cash. Electronic transactions and other non-cash payments like checks and gift cards would still use the exact amount to the last cent for the transaction. The U.S., under President Donald Trump, bid the penny goodbye last year, as the cost to make one cent is nearly 3.7 times its face value. But while the government has stopped manufacturing new pennies for circulation, the Treasury Department said the Federal Reserve will still recirculate roughly 114 billion pennies “for as long as possible.” Because of the phaseout, however, some businesses and consumers raised concern over increased costs related to rounding transactions to the nearest nickel. The National Restaurant Association argues that many restaurant operators, out of fear of possible litigation, have opted to round down costs to the nearest nickel when exact change wasn’t available. A prolonged period of rounding down could cost restaurants up to $168 million yearly, the association added. Meanwhile, the Federal Reserve Bank of Richmond projected in a July brief last year that rounding to the nearest nickel could cost U.S. consumers about $6 million annually. Industry groups lauded the passage of the Common Cents Act, a bipartisan effort sponsored by Reps. Robert Garcia (D, Calif.) and Lisa McClain (R, Mich.). The bill now heads to the Senate. “The House recognized the need for certainty to protect cash transactions, support consistency across the country, and resolve an issue that has been negatively impacting millions of businesses nationwide,” Evan Armstrong, the senior vice president of government affairs of the Retail Industry Leaders Association, said in a statement. Sean Kennedy, chief advocacy officer at the National Restaurant Association, said in a statement that the bill’s passage could reduce “unnecessary friction between restaurants and the guests they serve” and inject “a degree of uniformity into the most basic transactions involved in running a restaurant.”
Funny.... Just yesterday I went to Zaxby's for lunch and they had a chart printed up and sitting in front of the cash register showing how they would begin rounding the cents up or down.... First time I saw that.
Also in the bill (text is at the link above), the nickel may change to a nickel-plated-zinc composition. So we may get self-destructing zinckels* to replace the self-destructing zincolns? Maybe a concession to the zinc lobby? *I may trademark that name
The simple solution is if a store is charging $.98 for an item and they have a 6% sales tax that makes the cost of the item $1.04. If the retailer doesn’t want to mess with the change, they just need to lower their price to $.94. When you add in the 6% sales tax it’s now a dollar even. The retailer can round up or down the price they’re charging to make it come out to an even five or zero. Ending in a five or zero I believe that works out to a nickel, a dime, a quarter, a half dollar, a dollar coin or a dollar bill. That to me that is the simple solution. Now Congress is involved and so is the treasury which wants to distribute all those pennies, it’s all ridiculous. We need smart retailers.
You may be on to something, Nut..... If we have to sacrifice a portion of our change then perhaps the DOR can sacrifice some of theirs too!
Just to head off the inevitable social-media outrage: That's a bit less than two cents per person. PER YEAR. And I'm not even sure how they're getting a total that high, given that true rounding is precisely neutral over a large enough number of random transactions. Unless they used some sort of model that incorporates tons of actual prices and sales tax rates, in which case I'd like to know more about the model...
According to the report, 4,671 adults logged 3,559 cash transactions over a 3-day period. They found rounding up would occur more often than rounding down. Then they extrapolated this to all transactions ever. It's been a long time since my college math and statistics classes but I have trouble with this conclusion. I mean, if I flip a coin 100 times and get 53 heads and 47 tails, what have I proved?
I throw this out there sometimes when this issue come up - time to eliminate the hundredths place, all prices would end in tenths. Get rid of the nickel and the quarter, keep the dime and dollar coins exactly as they are, redesign the half dollar to be about the size of a nickel. Eliminate the $1, $5 and $20 bills and create a new $5 coin a little smaller than the current half. $10, $50, $100 bills and a new $500 note.
If their model is correct (huge if*), then I guess we (the U.S. Consumer) are currently losing 0.2 cents per person. *edit to add: actually reading the report does offer insight into their assumptions and data used in the model.
Or more likely, the retailer can make the price end in 3 or 8, and they earn an extra $.02 on every cash transaction. Now look up how many transactions someone like Walmart does a year and do the math.
The current retrofitting of all the self serve machines in my area give you back a nickel when you are supposed to get a penny. And if you are supposed to give a penny or more, it reduces it to zero. They all accept pennies. There are still hundreds of billions of pennies in circulation. Since 2010 not even including S cents, over 100 billion pennies were produced. This doesn't even account for all the pennies in circulation before that. Maybe if all the idiots weren't hoarding copper cents thinking they are going to get rich, there would be even more.
It's a brilliant plan... as long as they make you pay for each item separately. At which point I will start using a credit card for every transaction. And all those claims about the millions of dollars merchants lose by rounding down to the nearest nickel? They completely ignore the fee the merchant pays on every non-cash transaction. Debit or credit, I think even the largest retailers pay a flat fee that's more than a nickel, plus the percentage surcharge. So, yeah, if a merchant wants to price everything ending in 3 or 8 cents, and ring up every item individually, and go cash-only - cha-ching! Until the sales tax auditors show up.
