A penny for your thoughts will now be harder to come by. Rounding up or down to the nearest five-cent increment begins February 4 , with slightly more than half (53%) of businesses saying they are ready for the change and 56% set to adopt the federal government’s proposed rounding guidelines, according to a poll by Retail Council of Canada.
“On February 4, most of Canada’s retailers will be ready at the cash register to handle the penny phase-out,” said Diane J. Brisebois, president and CEO of RCC. “While we have been supportive of this initiative all along, we are grateful that the government delayed implementing the changes until this point, as retailers have needed the extra time to prepare.”
The Canadian Mint stopped producing pennies last spring but RCC advocated that the Mint keep them in circulation until after the busy holiday shopping season. The government agreed and pennies remained in circulation until February 4. The Mint has now stopped distributing them and financial institutions will send every one they receive back to the Mint.
For the survey, RCC asked small, medium and large retailers about their readiness for the phase-out of the penny, the approach they intend to use for rounding up or down and what this phase-out might cost their business. Three quarters (75%) of medium-sized businesses and 74% of small businesses say they plan on rounding totals manually at the register. However, 63% of large businesses plan to change their point-of-sale systems, at a potential cost of $100,000 or more.
“While smaller businesses will do the rounding manually at first and then determine the appropriate course of action, both in relation to cost and customer service, it is not a practical approach for large retailers with thousands of employees,” said Brisebois. “This, of course, represents a substantial cost for retailers to enable them to maintain standardization and meet consumers’ needs and expectations.”
While most businesses are likely to round a cash purchase such as $8.11 to $8.10, effective immediately, some may continue to make exact change until their stash of pennies is gone, says Brisebois. She notes that the changes are voluntary and says she expects retailers to make their decisions based on what they believe is best for their customers.