Back when we did it in Canada, I don't recall a single person I knew concerned about penny rounding. Everyone was sick of pennies. No one cared. Everyone was happy. And the math seems fair enough:
https://www.budget.canada.ca/2012/themes/theme2-info-eng.htm...
Basically, if something is $1.01 or $1.02, you round down. If it's $1.03 or $1.04, you round up. Rounding is to be applied after all taxes are paid, etc.
Of course, there was also central guidance and, well, everyone just followed it. It's called "having a society".
People blathering on about stores fixing the rounding are morons, there's no way to do so if you buy more than one item. No one gets ripped off with the above method. In the end, it just works out.
And really, who cares?! It's a penny.
If cash payments are rounded down, but debit card payments aren't, they are in violation of state law.
The article also points out that rollback of pennies in Canada and other places were planned, addressing these kinds of issues. USA is doing it with no such planning.
Hmm, maybe this is why it should be handled by Congress and not at the whim of the executive. They can handle all this in one piece of legislation.
I think most of the ones from previous years are all in people's junk drawers, couches, etc., and only go back into circulation when someone decides to dump them into a Coinstar machine. Retailers are already reporting shortages.
We unofficially drop the coins/bills when the reach ~US$0.03, so now we dropped the AR$50 bills and everythig in cash is rounded down to AR$100 (US$0.07).
(The only exception is the photocopy shop 2 blocks away from home.)
Credit cards are charged the exact ammount, with cents that are irrelevant.
The secret service probably won't cause a Waco out of it, but I'm sure they'll do something dumb.
Reality: the supermarket does it the common sense way, and never gets sued, but if they do get sued, the outcome is "you must now refund 2 cents from every SNAP transaction you ever did"
Please don't strawman this, there is ample evidence for rounding pennies on everyday transactions.
Here, it's a question of resolution, with a proven history that transitions screw the consumer, though maybe it won't be so. We're ok with arbitrary hundredths of a dollar, why were we not at thousandths? The American half cent disappeared a long time ago. You still need to include the cents in a tax bill that runs into the millions of dollars.
It's just an awkward stage in inflation. Eventually a US dollar will be worth what a Zimbabwean dollar was, and we won't have $100 bills anymore.
It's a degree scale: you can choose any number you want.
Not in all cases. The IRS does not use cents when you file your tax return, they say round to the nearest dollar.
Has that changed and it has to be dollars now?
Heard some pundits on the radio talking about the elimination of the penny and one of them who worked at the Secret Service as an analyst talked about why the US paper money only goes to $100 bills. He said it was to reduce criminals and illicit activity and criminals having to store it.
He related the story of Pablo Escobar's brother or cousin who was the accountant for the cartel. He said they were losing billions of dollars every year because of various kinds of attrition like rats chewing up the money, it getting too wet and disintegrating. They were losing so much because they had to store it and that wasn't always the best because they had so much of it on hand which seemed to lend credence to his story.
So if you were to get rid of the $100 bills that would further erode the ability of criminals to store so much of it.
Now, "illicit activity" more broadly speaking checks out to me. The EU stopped printing the 500 euro note because it was primarily used for illegal transactions and money laundering.
With bitcoin, it's moot.
A $100 is basically a tank of gas and a sandwich in CA.
Profit for the US government. Fixed by plastic bills.
Every $ printed but never redeemed is a significant profit (assuming other costs are low like printing).
Especially yummy when countries just want to hoard the currency - same as selling stamps that are never used:
estimate the stock of U.S. currency circulating in Argentina ... U.S. currency inflows during 1988-1992 totaled $20.8 billion
No, each number I enter into my tax form is rounded to the dollar. Not just the total, every input value.
It's not. Some US states have laws on the books that make it illegal for retailers to round up. The turmoil is that if the retailer can only round down to the nearest five cents, then they stand to lose from one to four cents per cash sale for any sale that is not a multiple of five cents. Add those one to four cent losses up over a large enough number of transactions and the retailer stands to lose a considerable sum over the course of a year. And many retail shops already operate with thin margins anyway, so the loss from "always round down" could erase whatever thin margins some shops already operate under.
Which is much less than they're paying the CC companies on card sales.
Same thing when people complain that raising minimum wage will increase prices, meanwhile prices have increased for 50 years completely separate from wages. They don't need the excuse to raise prices they're just gonna do it anyway.
If they want companies to not raise prices the only answer is regulation, but regulation is communism and therefore bad.
I'm so god damn tired.
Or competition. Consumer electronics are much cheaper than they were in the past, and that's not because of regulation. (To be clear, I'm not saying that regulation is wrong or anything, I'm saying that "use regulation to lower prices" and "remove barriers to competition to lower prices" are both tools in the toolbox.
For me, it's not about the pennies I'm losing. You're right, I don't care about them and the end of their minting doesn't mean much to me at all. No, it's about who is getting the pennies I'm losing. Let's say Nestle, a company I loath, has a box of instant noodles for $0.99 USD. Our hypothetical noodles are very popular, so everyone in the US tends to buy them.
Suddenly, pennies go away. Nestle thinks "hmm, so our customers were already paying $0.99, might as well just bump the price up to $1.00, nobody will care." And they'd be correct. As a typical consumer, I'd pay $1.00 for something that I was just paying $0.99 for because the difference is negligible to me.
But if everyone in the US buys them for lunch, that's not a negligible difference to Nestle. That's nearly $3,500,000 USD in extra revenue that week. If the consumer behavior remains consistent, that's an extra $182,000,000 USD per year. Maybe that seems like small potatoes compared to what Nestle grosses annually on a global scale, but even the richest of companies can do A LOT with that much extra cash.
But of course, that is an extreme and overly simplified example. However, it illustrates the idea that while the individual will not really feel the change, the collectives or corporations will.
I'm not an economics expert by any stretch of the imagination, but one thing I'm fairly sure about is when something like this type of change happens, the corporations are unchallenged at finding ways to exploit it, which usually translates to more money going up to them and less coming back down to the individual.
If you as a consumer care about rounding, then just buy three of them: 3× $0.99 = $2.97, which rounds down to $2.95 USD, netting you a $0.02 bonus (the maximum possible).
The rounding is done at the end of the transaction, not per item. I speak from experience in Canada - it is indeed possible to execute this transaction in real life. And basic food items have no sales tax, so the price you see on the shelf is the price that you pay at checkout. It is 100% realistic to go into a food store, grab 3 items at $0.99 CAD each, and pay $2.95 CAD in cash.
Because you as a consumer has control over the transaction, I find any arguments against rounding to be ridiculous.
Since we got rid of the half penny in the UK there simply isn't half penny pricing. (I do remember 2-for-a-penny sweets though, but they'd probably be at least 5p each now anyway.)
I’d bet most Americans don’t even know they are getting rid of the penny. Or if they saw it on the news, they forgot about it a day later. It ranks pretty low on general concerns.
Social media commentary about the issue are a tiny minority - first people need to come across the topic, then they need to muster up the effort to actually comment. People who don’t care don’t comment.
I see this mistake with a lot of people. Issues they think are top of mind across people aren’t even known by the vast majority.
You'd have to ensure a positive expectation value over not only every item, but every combination of items a consumer could by. You could focus only on the most likely possible orders (assuming you have the data, I don't know how many stores actually track combination of items bought), but it's not obvious to me that there's a tractable top n most likely orders that gives a reasonable enough estimate of expectation value.
On top of that, you would be interfering with whatever system you already have that sets the cents of each item (whether marketing with 99¢, or % discounts, or a system that tracks that 97¢ means lowest sale, etc).
That must be nice.
Nice concept.
But they usually have a little bowl of bronze slugs (or old pennies) just for the machines now.
We getting rid in Europe of 1 and 2 cents which are more valuables than pennies and nobody gives two damns.
Even roundings in Italy, by law, now are 5 cent based: meaning you can't have a bill that ends with 5 cents it has to get rounded to the nearest multiple of ten cents.
Seriously, nobody cares.
So everything's going to be $1.03 or $1.04. Not sure why you think retailers (or any sellers) would ever, ever, ever let this play into customers' advantage.
But apparently pointing out that obvious truth makes me a "moron," because you can think of some clever ways to get around it that retailers surely won't work around.
Never mind this: When was the last time you bought something in person, in cash, and bought only one thing? Just think it through for a second.
Hypothetically if you incur 10,000 transactions per year with the max rounding up of $0.04 per transaction, you're out $400.
This doesn't make a huge impact to individuals, but it absolutely will to large volume businesses.
They have historical data, so they know on average people buy 5 things, and they will have data on what impact on purchasing behavior the changes have. Most likely they will tune for increased volume as people spend more to avoid losing a couple of cents.
"In cash" is entirely separate from the rounding debate and is just the "people use cards, anyway" argument. It's not relevant to this discussion. This discussion is about cash. I do buy single items at stores sometimes.
> If you buy two things at $1.03 or $1.04, it's $2.06 or $2.07 and rounds down to $2.05 more often than it's $2.08 and rounds up to $2.10.
Where's the law preventing stores from imposing an accounting fee for multi-item purchases, conveniently totaling a few cents?
Rounding would apply on the total transaction, not individual items (because otherwise the individual posted item prices would just be false.) So, if there is an abuse route with round-half-down, it is that optimizing buyers would structure purchase to always total $x.01 or $x.02, possibly splitting planned purchases into multiple purchases to achieve that.
But even that isn't realistically a significant issue.
But yeah, this isn’t a real issue regardless.
it'll come out in the wash. there are much bigger things to worry about.