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No. Most purchases are not made with cash and fewer people are using cash every year. You're basically saying that all consumers should pay more with every pu

No. Most purchases are not made with cash and fewer people are using cash every year. You're basically saying that all consumers should pay more with every purchase so that the mint can make <2% more revenue, a negligible amount in relation to the federal budget. https://www.frbsf.org/cash/files/figure-3-2015dcpc-share-of-transaction-number-by-payment-instrument-final.png https://www.frbsf.org/cash/files/figure-3-2015dcpc-share-of-...

eikenberry 8y ago
I bet in general it would save money. Many things price ends in .99 to trick people into thinking it is cheaper. All those things would switch to .95 in order to preserve the trick.
- wolco 8y ago
  You are forgetting sale tax which changes the final price (if there exists tax is your region)
  - jstarfish 8y ago
    That isn't the point; he's talking about the psychological difference we ascribe to seeing gas pegged at $4.00 a gallon versus a mere $3.99, since the first digit is the most significant. Tax is always going to be the same no matter which station in town you use, so it's not a useful metric for comparison shopping. (And actually gas stations take it a step further. The $3.99 you see on the sign isn't the actual price, it's $3.99 + 99/100 cents. If you look closely, you'll sometimes see the extra fraction of a cent in superscript.)
    - chatmasta 8y ago
      > Tax is always going to be the same no matter which station in town you use, so it's not a useful metric for comparison shopping. I grew up on the border of Maine (sales tax) and New Hampshire (no sales tax). There, tax is frequently used as a metric for comparison shopping. In fact there’s an entire street over the bridge into NH colloquially known as “gasoline alley.”
  - curun1r 8y ago
    Then if we could pass a law mandating that prices be displayed inclusive of sales tax, that'd be great. One of my favorite parts about going to Europe is being able to add up prices in my head and have it match up exactly with the final total. The US system is nonsensical and shouldn't be used to justify other nonsensical policies like the continued use of the penny.
    - djrogers 8y ago
      The problem with all prices being shown inclusive of tax is that the amount of the tax becomes forgotten over time. By having tax added and called out on the receipt at the register, everyone is reminded many times per day how much sales tax they're paying.
      - macintux 8y ago
        Additionally, sales tax is sometimes not required, either because the product or the reason for purchase is exempt. Computers can deal with the latter, signage can't.
        xyzzyz 8y ago
        Signage in Europe deals with this just fine.
        notahacker 8y ago
        For bricks and mortar stores, if the majority of people due to pay the tax are capable of rounding up a posted price of $fee + tax, the minority eligible for tax exemptions are capable of rounding down a posted price of $fee - tax Might be a little different for online stores where tax can't be calculated until they know which of the many different local tax codes the sale is being made under, but as you've already noted computers can handle updating the price before people confirm the purchase.
        Symbiote 8y ago
        European online retailers that expect significant sales to both businesses and consumers (e.g. computer components) either show both prices with different fonts, or have a button somewhere to switch between with- and without-VAT prices. Except for businesses, there isn't the situation as in the US, where the retailer is responsible for verifying that a customer is tax-exempt. People on the equivalents of food stamps pay the VAT; yes the money just goes in a circle back to the government, but it's probably easier accounting for everyone.
stevenwoo 8y ago
What I've been reading in the comments about this story on reddit is Canada and other countries already did this (eliminate the penny) and the final price is rounded to the nearest nickel, not always up.
- jesseb 8y ago
  Cash purchases in Canada are indeed rounded to the nearest nickel; it is not always up. Credit/debit purchases are still to the penny, as there is no reason for them not to be. All cash purchases average out to no change over time, and I don't know anybody who misses pennies. I wish they'd drop the nickel next.
cbm-vic-20 8y ago
Non-cash transactions would still be commonly made in $0.01 increments. $53.47, for example. The difference is, if you wanted to purchase a dozen things that total $53.47 at a store, if you use cash, you'd end up paying $53.45 or $53.50, depending on the store's policy. Many may end up rounding down, what a deal! Or they'll choose to be greedy and trade in that goodwill for three measly cents.
- lb1lf 8y ago
  Surely there must be a law outlining how rounding of sums will be done, rather than leaving it to the store owner's discretion? (Here in Norway, we've gotten rid of the 5, 10, 25 and 50 øre (cents, if you like) coins since I was a kid; the smallest denominations coin now in use is the 1 krone. Stores round like any mathematically inclined would -.01-.49 sums are rounded down, .50-.99 sums rounded up.
  - montecarl 8y ago
    Seems like this is handled differently in different countries: https://en.wikipedia.org/wiki/Cash_rounding https://en.wikipedia.org/wiki/Cash_rounding
will_brown 8y ago
It’s actually the people who use credit/debit cards to make purchases who raise the prices on all goods/services for people who pay cash. The average merchant pays 2.3-3.5% per swipe, as a result prices are increased across the board and passed on to consumers, no matter if they pay with card or cash.
- nostromo 8y ago
  Fair enough. But it doesn't follow that we should increase prices further by rounding up (as per the comment I responded to) because credit cards charge a fee.
- user5994461 8y ago
  It's actually Americans who raised price to serve Americans. In sane countries, the merchant fees are half of that.
- acdha 8y ago
  Those costs have been driven down by Stripe and cash isn’t without its own costs. I used to favor cash myself but a couple of local businesses here recently started requesting credit cards because it’s cheaper than dealing with counterfeiting.
  - ceejayoz 8y ago
    Stripe costs 2.9% + 30¢. Merchant accounts have long been below that, they were just a pain to get, and generally required hardware from the bank.
    - acdha 8y ago
      Merchant accounts weren’t that low until they started getting more competition.
      - ceejayoz 8y ago
        I had clients in the early 2000s with 1.9% rates, as well as one with 2.5% and no fixed per-transaction fee, and these were small mom-and-pop businesses - the Targets, Costcos, Apples, etc. of the world likely go way lower on volume. Stripe's selling point was never low fees. It was "you can be up and accepting cards in just a few minutes of coding", and that was well worth paying an extra percent or so.
mikestew 8y ago
You're basically saying that all consumers should pay more with every purchase so that the mint can make <2% more revenue I basically said what I said. I want all consumers to pay more so I don't have to have pennies rattling around everywhere, which I eventually accumulate to the point that it's worth going to bank to get rid of them. Pennies: the busy-work of finance.
- nostromo 8y ago
  So do what most people do: don't pay with cash. Asking everyone to pay more so you're not inconvenienced with change, even though you're asking for it by using cash, is quite self-centered. If you don't like pennies, then just give them away as soon as they're handed to you.
  - mikestew 8y ago
    So do what most people do: don't pay with cash. You mean tack on 2-3% processing fees on every transaction? is quite self-centered. * ahem * . All I'm asking is $0.04/transaction at most, regardless of transaction size. But because you don't want to use cash, you'd like much more than four cents tacked on?
    - adventured 8y ago
      > So do what most people do: don't pay with cash. > You mean tack on 2-3% processing fees on every transaction? No. The price you're paying at the store doesn't change for you just because you pay without cash. If you walk into Walmart or Target or a local convenience store, they're not changing all the prices at the POS if you pay in cash vs card. And your paying with cash isn't having a meaningful impact at reducing prices as a share of payment, cash is too far in the minority at this point and that's going to get worse.
- PKop 8y ago
  Coins: the busy work of business, that's why they mostly switched to credit cards, for similar logic you're using regarding pennies. Stores don't typically raise their unit prices when they decide to accept credit cards; they benefit from efficiency (and lack of theft) and receive more volume in sales as a result.
tantalor 8y ago
Then only round cash purchases.
greenshackle2 8y ago
Canada has already phased out the penny. Electronic transactions are not rounded. Cash transactions are rounded to the nearest nickel. It hasn't been a problem. As a customer you can 'abuse' this by paying with card when the price would be rounded-up, and cash when it is rounded down. But it's not really worth the effort.
- dexterdog 8y ago
  Not worth the effort? You underestimate my cheapness at your own peril.
  - cpncrunch 8y ago
    It's always worth paying with a card, as you can get 2% cashback with a decent card. Even if you purchase something for $1, you'll get at least 2c back.
- bxio 8y ago
  This is the basic premise of the rounding system - it's really not worth the effort of quarreling over the gain or loss of two cents. IMO Canada should've gotten rid of the nickel as well. One step at a time, I guess.

eikenberry 8y ago

I bet in general it would save money. Many things price ends in .99 to trick people into thinking it is cheaper. All those things would switch to .95 in order to preserve the trick.

wolco 8y ago
You are forgetting sale tax which changes the final price (if there exists tax is your region)
- jstarfish 8y ago
  That isn't the point; he's talking about the psychological difference we ascribe to seeing gas pegged at $4.00 a gallon versus a mere $3.99, since the first digit is the most significant. Tax is always going to be the same no matter which station in town you use, so it's not a useful metric for comparison shopping. (And actually gas stations take it a step further. The $3.99 you see on the sign isn't the actual price, it's $3.99 + 99/100 cents. If you look closely, you'll sometimes see the extra fraction of a cent in superscript.)
  - chatmasta 8y ago
    > Tax is always going to be the same no matter which station in town you use, so it's not a useful metric for comparison shopping. I grew up on the border of Maine (sales tax) and New Hampshire (no sales tax). There, tax is frequently used as a metric for comparison shopping. In fact there’s an entire street over the bridge into NH colloquially known as “gasoline alley.”
- curun1r 8y ago
  Then if we could pass a law mandating that prices be displayed inclusive of sales tax, that'd be great. One of my favorite parts about going to Europe is being able to add up prices in my head and have it match up exactly with the final total. The US system is nonsensical and shouldn't be used to justify other nonsensical policies like the continued use of the penny.
  - djrogers 8y ago
    The problem with all prices being shown inclusive of tax is that the amount of the tax becomes forgotten over time. By having tax added and called out on the receipt at the register, everyone is reminded many times per day how much sales tax they're paying.
    - macintux 8y ago
      Additionally, sales tax is sometimes not required, either because the product or the reason for purchase is exempt. Computers can deal with the latter, signage can't.
      - xyzzyz 8y ago
        Signage in Europe deals with this just fine.
      - notahacker 8y ago
        For bricks and mortar stores, if the majority of people due to pay the tax are capable of rounding up a posted price of $fee + tax, the minority eligible for tax exemptions are capable of rounding down a posted price of $fee - tax Might be a little different for online stores where tax can't be calculated until they know which of the many different local tax codes the sale is being made under, but as you've already noted computers can handle updating the price before people confirm the purchase.
        Symbiote 8y ago
        European online retailers that expect significant sales to both businesses and consumers (e.g. computer components) either show both prices with different fonts, or have a button somewhere to switch between with- and without-VAT prices. Except for businesses, there isn't the situation as in the US, where the retailer is responsible for verifying that a customer is tax-exempt. People on the equivalents of food stamps pay the VAT; yes the money just goes in a circle back to the government, but it's probably easier accounting for everyone.

stevenwoo 8y ago

What I've been reading in the comments about this story on reddit is Canada and other countries already did this (eliminate the penny) and the final price is rounded to the nearest nickel, not always up.

jesseb 8y ago
Cash purchases in Canada are indeed rounded to the nearest nickel; it is not always up. Credit/debit purchases are still to the penny, as there is no reason for them not to be. All cash purchases average out to no change over time, and I don't know anybody who misses pennies. I wish they'd drop the nickel next.

cbm-vic-20 8y ago

Non-cash transactions would still be commonly made in $0.01 increments. $53.47, for example. The difference is, if you wanted to purchase a dozen things that total $53.47 at a store, if you use cash, you'd end up paying $53.45 or $53.50, depending on the store's policy. Many may end up rounding down, what a deal! Or they'll choose to be greedy and trade in that goodwill for three measly cents.

lb1lf 8y ago
Surely there must be a law outlining how rounding of sums will be done, rather than leaving it to the store owner's discretion? (Here in Norway, we've gotten rid of the 5, 10, 25 and 50 øre (cents, if you like) coins since I was a kid; the smallest denominations coin now in use is the 1 krone. Stores round like any mathematically inclined would -.01-.49 sums are rounded down, .50-.99 sums rounded up.
- montecarl 8y ago
  Seems like this is handled differently in different countries: https://en.wikipedia.org/wiki/Cash_rounding https://en.wikipedia.org/wiki/Cash_rounding

will_brown 8y ago

It’s actually the people who use credit/debit cards to make purchases who raise the prices on all goods/services for people who pay cash. The average merchant pays 2.3-3.5% per swipe, as a result prices are increased across the board and passed on to consumers, no matter if they pay with card or cash.

nostromo 8y ago
Fair enough. But it doesn't follow that we should increase prices further by rounding up (as per the comment I responded to) because credit cards charge a fee.
user5994461 8y ago
It's actually Americans who raised price to serve Americans. In sane countries, the merchant fees are half of that.
acdha 8y ago
Those costs have been driven down by Stripe and cash isn’t without its own costs. I used to favor cash myself but a couple of local businesses here recently started requesting credit cards because it’s cheaper than dealing with counterfeiting.
- ceejayoz 8y ago
  Stripe costs 2.9% + 30¢. Merchant accounts have long been below that, they were just a pain to get, and generally required hardware from the bank.
  - acdha 8y ago
    Merchant accounts weren’t that low until they started getting more competition.
    - ceejayoz 8y ago
      I had clients in the early 2000s with 1.9% rates, as well as one with 2.5% and no fixed per-transaction fee, and these were small mom-and-pop businesses - the Targets, Costcos, Apples, etc. of the world likely go way lower on volume. Stripe's selling point was never low fees. It was "you can be up and accepting cards in just a few minutes of coding", and that was well worth paying an extra percent or so.

mikestew 8y ago

You're basically saying that all consumers should pay more with every purchase so that the mint can make <2% more revenue I basically said what I said. I want all consumers to pay more so I don't have to have pennies rattling around everywhere, which I eventually accumulate to the point that it's worth going to bank to get rid of them. Pennies: the busy-work of finance.

nostromo 8y ago
So do what most people do: don't pay with cash. Asking everyone to pay more so you're not inconvenienced with change, even though you're asking for it by using cash, is quite self-centered. If you don't like pennies, then just give them away as soon as they're handed to you.
- mikestew 8y ago
  So do what most people do: don't pay with cash. You mean tack on 2-3% processing fees on every transaction? is quite self-centered. * ahem * . All I'm asking is $0.04/transaction at most, regardless of transaction size. But because you don't want to use cash, you'd like much more than four cents tacked on?
  - adventured 8y ago
    > So do what most people do: don't pay with cash. > You mean tack on 2-3% processing fees on every transaction? No. The price you're paying at the store doesn't change for you just because you pay without cash. If you walk into Walmart or Target or a local convenience store, they're not changing all the prices at the POS if you pay in cash vs card. And your paying with cash isn't having a meaningful impact at reducing prices as a share of payment, cash is too far in the minority at this point and that's going to get worse.
PKop 8y ago
Coins: the busy work of business, that's why they mostly switched to credit cards, for similar logic you're using regarding pennies. Stores don't typically raise their unit prices when they decide to accept credit cards; they benefit from efficiency (and lack of theft) and receive more volume in sales as a result.

tantalor 8y ago

Then only round cash purchases.

greenshackle2 8y ago

Canada has already phased out the penny. Electronic transactions are not rounded. Cash transactions are rounded to the nearest nickel. It hasn't been a problem. As a customer you can 'abuse' this by paying with card when the price would be rounded-up, and cash when it is rounded down. But it's not really worth the effort.

dexterdog 8y ago
Not worth the effort? You underestimate my cheapness at your own peril.
- cpncrunch 8y ago
  It's always worth paying with a card, as you can get 2% cashback with a decent card. Even if you purchase something for $1, you'll get at least 2c back.
bxio 8y ago
This is the basic premise of the rounding system - it's really not worth the effort of quarreling over the gain or loss of two cents. IMO Canada should've gotten rid of the nickel as well. One step at a time, I guess.