Humor. It is a difficult concept.
On every transaction, the store would lose between zero and four cents, for an average value of two cents.
In an extreme case, a store handling a thousand cash transactions per day (say a fast food restaurant, or a convenience store) with an average value of $20 would be losing $20 per day, or a 0.1% loss in revenue.
In return they get faster cashier work with fewer interruptions, because there is one less change slot to refill. And perhaps fewer and faster trips to the bank.
As for people paying with pennies, the number of people who pay with pennies when the purchase rounds to $0.05 must be vanishingly small.
The more I think about this, the more I like it. Storekeepers, lead the way!
(And I’m not asking storekeepers to do anything I haven’t done myself, because every penny I get goes straight into the garbage.)
It’s the thousand cash transactions per day I was wondering about. I don’t know if that’s a realistic number given the number of card transactions these days.
Also, the cashiers won’t have to count and account for pennies before and after each shift, nor will a manager have to go get a roll of pennies from the safe/vault when the cashier runs out, etc.
Actually, the problem could be solved easily…if anybody in the US DOT had any brains. Use plastic bills (like Australia, Canada, etc.) These last 100X as long a paper notes.
But see, this will never happen, because there is a paper company in Massachusetts (Crane Paper, Dalton, MA), that makes the papaer for US currency. It has a hamerlock on the business (thanks to the late Senator Ted Kennedy.
So this will never happen.
Crane got a contract with the Bureau of Engraving and Printing in 1879 - I had no idea Teddy was so influencial during that period of American history. But it is nice that you had an opportunity to share another of your delightful half-remembered almost-facts that somehow manage to be a political jab. Well done.
And even before that, Crane made paper for banknotes during the American Revolution. They also make paper for Sweden, the UK and other countries. So it’s not like Senator Kennedy threw the contract to some new startup in his state; the company is the largest manufacturer of currency paper in the world.
BTW, I saw a documentary on PBS a few years back about the testing that the Bureau of Engraving and Printing goes through before approving changes in the currency. One of the tests involved crumpling a dollar bill to a tiny size and then seeing if it’s still usable when flattened out. I believe the Bureau decided that plastic currency was not durable enough. There are very good reasons that they continue to use cotton paper.
If the dollar coin happens, I would think Crane would be happy to hear $2 note production will likely increase.
Why? It’s the same paper.
If the feds stop printing $1 notes in favor of coins, I would think it would likely increase printing of $2 notes, and Crane will be not entirely unhappy about completely gutting US fed’s demand for Crane paper.
Why would the law ban them from doing what they’re already doing when they round to the nearest cent?
I assume current law allows rounding up to the nearest cent and not all the way up to the nearest nickel, but I don’t know. My thought is that if a store put an item up for sale at $X plus Y% sales tax, then that’s what the customer expects to pay, and no more than that. The store might get in trouble for trying to sell things above advertised price if the store starts trying to round transactions up to the nearest nickel. Maybe the store would call it a transaction fee for all transactions ending in certain digits. I don’t know, just a WAG.
I presume he’s saying changing the price tag.
I believe that the exchange stores used by US military overseas round transactions to the nearest nickel. So if the DoD can do so without violating any laws, I can’t see why a private retailer would get into trouble for doing so.
I can see where state and local consumer protection laws would be in effect for the public and perhaps not for overseas military.
I have a hard time imagining walking into a retail store to buy an item with a $1 price tag in a county with an 8% sales tax and then the store asking me to pay $1.10 instead of $1.08 at the register. False advertising, bait & switch and all that.
Seems almost like found money but we all know it isn’t. You pay the price by going to the ATM more often. On the other hand, I can see how it does work as petty cash in Canada, since if you can grab a handful of coins that includes a few loonies or twonies you actually have something you can use. Obviously that doesn’t work south of the border.
It’s just as hard as imagining buying something that costs $1 in a county with a sales tax of 7.75% and being asked to pay $1.08 instead of $1.0775. Or just as hard as imagining buying a single gallon of gas and being asked to pay $3.14 instead of $3.139. That is to say, it’s not hard to imagine at all, and nobody cares or even thinks about it when shopping.
People do care and notice. People notice when a store price scanner rings things up at higher prices than listed on the shelf. Stores get busted for that kind of thing AFAIK.
But if people care and notice, why will most people just ignore a penny lying on the pavement, and some people will even throw away any pennies they come home with?
In other words, I don’t think people will mind if a store chooses to round all transactions to the nearest nickel, particularly if the store posts signs indicating that they’re doing so.