Why do we round cash to two decimal points?

[phs3]

Somebody has to say it: Canada got rid of pennies years ago, and it works fine. Your bill comes to $4.93, you give them a $5; you get back a nickel.

It bothers my mild OCD if I’m visiting and in a cab where the increments aren’t even nickels, so every time it clicks I round it in my head, but that’s just me.

[don_t_ask]

@Princhester

Don’t tell me, let me guess. You do thousands of these reports per day and the rounded off cents get whisked into an account where no one misses them.

The account is controlled by Mr D. Ask

Ah no, you don’t understand. It’s very complicated.

[dtilque]

@engineer_comp_geek

Half disme $0.05
Cents $0.01
Half cents $0.005

So if you want to know who is to blame for the creation of the modern nickels and pennies, it’s the U.S. Congress in 1792.

Half di(s)mes are not the same as nickels. The half dime was silver coin which had half the amount of silver as the dime, so it was really small. It was replaced by a coin made up of copper and nickel in the middle of the 19th century.

As far as mills, property taxes are often denominated in mills. But since that gets multiplied by the total value of the land+building, the result is always in dollars.

I’ve seen reference to a higher denomination of US money: the Union is 10 Eagles. Not sure if that’s official. There’s never been any coins or bills issued in Unions, so likely it is not.

[SCAdian]

Double eagle = $20
Stella = $4

[Chronos]

Half dimes are the same as nickels, in the sense that the the coin commonly referred to as a nickel has a value of half a dime. Though it’s not marked that way any more, being instead marked as “five cents”. Though, the coin commonly called a dime is in fact still marked as being worth “One Dime”, not as “Ten Cents” or “Tenth of a Dollar”.

[Limmin]

@phs3

Somebody has to say it: Canada got rid of pennies years ago, and it works fine. Your bill comes to $4.93, you give them a $5; you get back a nickel.

Cool! As usual Canada takes the lead…

So how does it work? Do calculations often end in cents then get rounded manually, or are you more often handed a bill with the cents rounded to the nearest 0.05 or 0.10?

[naita]

Money started out as authenticated pieces of precious metal. (Or possibly royal propaganda came first.) Your one gold piece would be worth ten times more than a tinier gold piece with 1/10 of the weight. If you had a silver piece, the exchange rate would depend on how much gold was valued compared to silver. Exchange rates were likely sticky by nature and then by fiat, but that leads to weird hoarding behavior and you have to keep changing what the official differences are and you have several hundred years of related messes before every came to their senses and went for just full fiat money.

But in the formalization of exchanging different types of coin for each other various standards arose, the British one having pence, shillings and pounds. No decimal places, just counts of pence, shillings and pounds. Other countries had similar systems with two or three tiers of coins and occasionally they revised how many of one went into the other.

The US appears to have been one of the first with a truly decimal currency system, followed by France, who of course went for it all the way and made absolutely everything decimal (at least for a while).

Why didn’t everyone go to decimal coinage earlier? Remember nothing else was noted with decimals either, if you needed a sub-division you used a smaller unit.

The strange thing isn’t why we “round cash”, it’s how thoroughly modern thinking has been decimalized to make that a question one would think to ask.

[FinsToTheLeft]

@Limmin

So how does it work? Do calculations often end in cents then get rounded manually, or are you more often handed a bill with the cents rounded to the nearest 0.05 or 0.10?

It’s only on the total after tax. Many printed receipts say something like:

$10.92 cash $10.90

Credit and debit charges are still to the $.01. More than 75% of all payments in Canada are cashless.

[Limmin]

Ah, makes sense. If we were to do away with cash altogether we could (and do) embrace cents once again. True in any country that manages this feat.

[Bootb]

@Princhester

Don’t tell me, let me guess. You do thousands of these reports per day and the rounded off cents get whisked into an account where no one misses them.

I once read a novel where a hacker doing exactly that was one of the plot points.

[Exapno_Mapcase]

@ekedolphin

Who came up with the idea of nickels and pennies? Why don’t we have half-pennies? Why do we have cents at all?

Seriously. How young are you? When I was a kid pennies and nickels were valuable commodities.

@Chronos

For what it’s worth, the US actually has five monetary units, not two. There are ten mills in a cent, ten cents in a dime, ten dimes in a dollar, and ten dollars in an eagle. Nobody ever uses them as units, but they’re defined as such.

Technically, the eagle was a base-unit only for gold coinage. Silver, nickel and copper coins topped at a dollar.

@Chronos

Gas stations price in a multiple of mills, but they’re still not really using them as units. Gas isn’t two thousand, nine hundred and ninety-nine mills a gallon; it’s two point nine nine nine dollars.

Isn’t that like saying a yard isn’t thirty-six inches, it’s three feet?

[Chronos]

What I mean is, gas station prices are expressed in dollars. Even if nobody had ever defined a unit that was one thousandth of a dollar (or not even one that was a hundredth or a tenth), you could still define the price of a gallon of gasoline as 2.999 dollars. And in fact, most people who run gas stations probably don’t even know that the mill is a unit of money.

[markn_1]

@Bootb

I once read a novel where a hacker doing exactly that was one of the plot points.

It’s called “salami slicing” and has been done numerous times in real life as well.

[SCAdian]

@Limmin

@phs3

Somebody has to say it: Canada got rid of pennies years ago, and it works fine. Your bill comes to $4.93, you give them a $5; you get back a nickel.

Cool! As usual Canada takes the lead…

May 2012. Australian 1¢ and 2¢ coins were removed from circulation in 1991; New Zealand did the same in 1990, and then did awway with the 5¢ coin in 2006.

[Schnitte]

@Chronos

For what it’s worth, the US actually has five monetary units, not two. There are ten mills in a cent, ten cents in a dime, ten dimes in a dollar, and ten dollars in an eagle. Nobody ever uses them as units, but they’re defined as such.

Well, the Coinage Act of 1792 does give preeminence to the dollar as the monetary unit; it actually repeatedly uses the word “unit” as a synonym for dollar. The other coins that you list are all defined via their value relative to the dollar (plus their metallic content), but not by reference to the nearest neighbouring unit. So the act does not say that there are ten mills to a cent, ten cents to a dime, and ten dimes to a dollar; it says that the mill is a 1,000th of a dollar, and a cent 100th of a dollar. So I would say that the logic of the drafters of the act was to regard the dollar as the basis of the entire system and the other coins merely as multiples or fractions of the dollar; the system was not designed to be something like the pre-1971 British system, whereby you had 12 pence to a shilling and 20 shillings to a pound, with penny, shilling and pound being independent (but interrelated) monetary units coexisting in parallel.

[bob_2]

@Schnitte

the pre-1971 British system, whereby you had 12 pence to a shilling and 20 shillings to a pound, with penny, shilling and pound being independent (but interrelated) monetary units coexisting in parallel.

That’s incorrect. The system was based on the penny, which was one pennyweight (in troy weight) a unit of 24 grains or 1/20 of an ounce).

It took 240 of them to make a pound troy of silver so there were 240 pennies in a pound. Shillings, florins etc were just convenient multiples.

[DesertDog]

@SCAdian

May 2012. Australian 1¢ and 2¢ coins were removed from circulation in 1991; New Zealand did the same in 1990, and then did awway with the 5¢ coin in 2006.

Never gonna happen here, You see, the company that makes the zinc planchets used for US 1-cent pieces greases a lot palms makes political donatons on both sides of the aisle.

[DavidNRockies]

It’s odd to me that both the penny and the farthing have fallen out of favor, particularly since they made such a beautiful child together:

Penny-farthing

[Northern_Piper]

@Napier

Looks like pennies have been around since the 1300s at least, while dollars appeared in the 1500s

Much older than that. The system of pence, shilling and pound was developed by Charlemagne in the 8th century and spread throughout his empire. It was once the standard for western Europe:

£sd (occasionally written Lsd , spoken as “pounds, shillings and pence” or pronounced /ɛl.ɛsˈdiː/ ell-ess-DEE ) is the popular name for the pre-decimal currencies once common throughout Europe, especially in the British Isles and hence in several countries of the British Empire and subsequently the Commonwealth. The abbreviation originates from the Latin currency denominations librae , solidi , and denarii .[1] In the United Kingdom, these were referred to as pounds , shillings , and pence ( pence being the plural of penny ).

Although the names originated from popular coins in the classical Roman Empire, their definitions and the ratios between them was introduced and imposed across Western Europe by Charlemagne, King of the Franks. The £sd system was the standard across much of the European continent (France, Italy, Germany, etc.) for nearly a thousand years, until the decimalisations of the 18th and 19th centuries. As the United Kingdom remained one of the few countries retaining it into the 20th century, the system became particularly associated with Britain. It was King Offa of Mercia who adopted the Frankish silver standard of librae, solidi and denarii into Britain in the late 8th century…
…
The £sd system prevailed across much of Western Europe. In French, it was known as the livre , sous and denier , in Italian as lira , soldo and denaro , in German as pfund , schilling and pfennig and in English as pound , shilling and penny . The English name pound is a Germanic adaptation of the Latin phrase libra pondo ‘a pound weight’.[4]

[Siam_Sam]

Not every monetary system has subdivisions. In Japan, it’s just yen. No cents equivalent.