Vermont Store Does Away With Pennies

Earlier this year, our upstairs neighbors in Canada decided to stop minting one cent pieces. Now that anti-penny sentiment has seeped across the border to the town of Morrisville, VT, where one sporting goods store has decided to just say no to copper coins.

Calling the penny an “outdated, outmoded, overpriced nuisance of coinage,” the owner of Power Play Sports says that on Sept. 1, the store started rounding its change up to the nearest nickel. Credit and debit card transactions will continue to be charged as they were before.

“I think pennies are unnecessary on a larger scale,” he explains to ABC News. ”Eighty-five percent of my transactions are by credit card or check, that’s why it was an easy thing to do… It doesn’t cost me much money because no one pays in cash currency anymore.”

He says that his customers are perfectly happy to not receive pocketfuls of pennies when they do make a cash purchase, and he’s not being hurt by having to occasionally round up a few cents.

“If the most that can be lost on a single sale is 4 cents, then the average per sale loss is 2 cents,” he explains.

Thanks to Lenny for the tip!

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  1. fantomesq says:

    How generous of him! What he should be saying is that he’s willing to TAKE his customers’ penny change in a transaction. If he really thought pennies a nuisance, he should be willing to eat the cost by rounding DOWN to the nearest nickel… I wonder what Weights & Measures will have to say about this… He is actually overcharging each cash transaction 0 to 4 cents. Real neighborly of him.

    • cameronl says:

      Read it again. He’s rounding the customer’s change up. If the customer’s change is $0.23, he’s giving him a quarter. His loss, not the customer’s.

    • fantomesq says:

      Nevermind. I misread… If he is rounding the CHANGE up to the nearest nickel, he’s covered… my bad.

    • dush says:

      He said he rounds up to not have to give pennies back. He’s willing to take as much as a 4 cent loss or an average of 2 cent loss on transactions.

    • psm321 says:

      I read change as charge the first time, got confused later when he said he wouldn’t LOSE much money, then had to go reread it a few times to figure it out. :)

  2. RandomLetters says:

    Rounding up to the nearest nickel? So he’s admitting that in some cases he’s overcharging his customers by as much as 2 cents? The man has no shame!

  3. rcojr says:

    I was stationed with the USAF in Great Britain in the 70s for 4 years, and since the British penny was the same size as the US penny at the time, we were not allowed to circulate any US pennies at on base establishments. The BX, commissary, service clubs, all rounded off, with a net gain or loss of close to zero. It worked very well, and I didn’t miss the pennies at all. The only establishment that didn’t round was the US Post Office on base, who gave you change in penny stamps. So about once a month, you would send a card home with 19 cents worth of miscellaneous stamps, which was kind of interesting. If everyone rounded down from 1, 2, 6, 7 and rounded up from 3,4, 8, 9, like we did then, I think it would work.

  4. hoi-polloi says:

    Are businesses like this and Chipotle rounding transactions because it’s just too much work to adjust prices? I agree that the penny lost its usefulness some time ago. I’m all too happy to leave them in dishes at the register rather than bringing them home.

    • TBGBoodler says:

      Sales tax will ruin your price adjustments.

      • JollySith says:

        just what I was going to say. State sales taxes vary from state to state, and in some states from city to city.

        • hoi-polloi says:

          Yes, but that’s a known value. Especially for an independent store like this, you can base the price on the total with tax. For national chains would have to loosen standardized pricing across different regions, but it could be done.

          • Such an Interesting Monster says:

            He stated that the majority of his customers pay via credit or debit card. It would be a lot more word to try and standardize his prices around this when only a small percentage of his customers are affected. Much easier to just do it as needed.

          • bluline says:

            It’s a known value of you purchase one item. For purchases of multiple items there’s no way to predict the final amount (or the final tax) until everything has been totaled.

            • RvLeshrac says:

              What? That’s silly. If I buy an item for $1 and an item for $5, my tax is (1*Tax)+(5*Tax).

              Sales tax doesn’t magically increase with the value of the purchase, unless your state is full of imbeciles.

              • lotswife says:

                Some states don’t have sales tax that stops at two decimal places like say .05%. The sales tax may be something like .0534%. In this case tax on $1 would work out to $.05 where as the tax on $3 would work out to $.16 instead of $.15. You could figure the tax for individual items, but if you purchase more than one item this will change things.

          • shepd says:

            As a sports store, I know this doesn’t count, but where I am, taxes change depending on how you bundle items. eg:

            Sandwich? Taxed.
            Soup? Taxed.
            Soup and Sandwich? Taxed.
            Soup and Sandwich and free water? No tax on anything.
            Soup and Sandwich and free water brought to your table? Taxes on it all.

            I know some states also charge different taxes on whether or not you dine in or take out. I’m sure there’s other wacky things, too.

            • shepd says:

              Oh, worse than that, the province beside me charges taxes on taxes, so that makes it almost impossible to come up with a round number (which means when you add items together, you will sometimes end up 1 penny over). It works like this:

              $1 item + 5% tax + 9.5% tax = $1.14975 total.

      • Not Given says:

        We have a liquor store that labels everything with tax included. Add your tax, round up, mark the price. Nobody would know the difference since the final price is the one that is marked.

    • Southern says:

      Two main reasons.

      They cost money to the business to count and handle on a daily basis.
      The cost the business money to buy (most banks charge businesses for change).

      There’s probably others, but those are the two I’m aware of.

      • hoi-polloi says:

        Sorry if I was unclear. I think until the U.S. does away with the penny, it would be a better long-term strategy for stores to adjust prices to eliminate pennies from transactions rather than adopting a policy to round transactions in the customers’ favor. As stated above, some areas would have to consider how sales tax will impact the total. That’s some pretty simple arithmetic.

        I don’t want to deal with pennies as an individual. I certainly wouldn’t want to deal with them if I ran a business. It would also benefit us to get rid of the paper dollar, but I confess I don’t like the idea of carrying around more coinage.

        • longdvsn says:

          The arithmetic isn’t as easy as you might think because of tax laws regarding rounding of the tax.

          Consider a simple example of 10% tax and suppose tax is always rounded down (I think it’s always rounded closest – but the same principle holds). If you purchase a $0.09 item, there would be zero tax. Now, suppose you bought 100 of them. You should have to pay a tax on the $9 worth of items ($0.90, in fact)….but under the price-adjusted method, there would be no tax on that transaction.

          …a very simple example, yes – but it does come into play for larger prices too.

          So it would require government tax overhaul to fix this issue.

          • hoi-polloi says:

            Well, that’s something I hadn’t considered! Thanks for the explanation.

          • RvLeshrac says:

            If you purchase 100 items, your tax would be (Items*Price)*Tax.

            You don’t round down on items if multiple are being purchased, unless someone purchases them one at a time.

            There’s a reason for that. They call it “Closing a loophole used by tax cheats.”

  5. Emperor Norton I says:

    Once again, I must remind everyone, as long as there are state sales taxes & people pay with cash [that includes coins], the penny is here to stay!

    Places that don’t have state sales taxes, such a military base exchanges, don’t have to bother with pennies.

    Anyone that doesn’t understand this is suffering from an advanced case of cognitive dissonance!

    • iamlost26 says:

      I disagree. What people need to wrap their heads around is that rounding goes both ways, and that your transactions are ALREADY being rounded because of sales tax. If the price comes out to $8.677 after tax, you are losing $0.003 cents, because you’ll need to pay $8.68. If it comes out to $8.674 after tax, the business loses $0.004, since you’ll be paying $8.67. Typically if you tell someone this, they won’t care, because $0.001 is not a lot of money. Well, hate to break it to you, but $0.01 is not a lot of money either.

      • Emperor Norton I says:

        See, you’re really suffering from an advanced case of cognitive dissonance.
        As we’ve seen on Consumerist in the last few weeks, some businesses were rounding up & it’s illegal to do so because then you are charging more than your posted prices!
        Sales tax rounding doesn’t count as that’s the law!

        Yes, 1/10 of a cent [a mill] is minor, but the pennies do add up either for poor people, who do need to watch their pennies. I’ve seen them having to decide how to spend a very small amount.
        And it will definitely add up for businesses that round up.

        To use an analogy, time the TV ads you see. They’re supposed to run 30 seconds. In fact the stations run then at 28-29 seconds. Since there are now at least 15 minutes of ads per hour, that’s 30 ads. But if you show only 28 seconds of an ad, you can squeeze in two more ads. At 29 seconds an ad, you get one more in.
        Small amounts add up & quickly

        • dru_zod says:

          Yes, small amounts do add up very fast. I don’t usually carry change with me, but what change I get from breaking a dollar I save in a drawer and I can get 100 pennies in no time. That’s a buck that I could have just thrown away because I didn’t want to be “bothered” with pennies.

        • iamlost26 says:

          In the hypothetical scenario where the US gets rid of pennies, I’d assume they’d put a policy in place where businesses would not be able to screw you through rounding up. In fact, it’s my personal opinion that there’s so much time and energy lost in dealing with pennies (transporting rolls, breaking them open, having employees count them), that a business would still benefit if they rounded everything down. You might think it only takes a few extra seconds to count out $0.98 vs. $0.95, but, as you say, all those seconds will add up over time, and before you know it, you’ve lost an hour that could have been used towards ringing up other sales.

    • AtlantaCPA says:

      You are making the assumption that businesses will continue to post pre-tax prices but they don’t have to!
      All that has to happen is businesses post prices that you actually pay, and they pay sales tax to the Govt as they normally do out of what you paid them. Some people would say that then you are ‘hiding’ the sales tax and that is basically true. It means that instead of people feeling a higher sales tax businesses would.

      There are a few businesses already doing this (a BBQ place near me does). Getting rid of the penny might make more or all of them do it. If they did it would make life so much easier for all consumers!

    • Mouton says:

      The Sales & Use Tax forms filed by businesses for many states don’t even a place for cents, just like the Federal Income Tax form (1040).

  6. Platypi {Redacted} says:

    When I worked in a movie theater in high school, all prices were set on the quarter. Most days, our tills never even saw anything smaller than quarters unless someone gave us a pocket of change. Made it REALLY easy to make change for the less bright teenagers!

    I would be inclined to do something similar if I ran a retail joint.

  7. Harry Greek says:

    This ‘business’ owner, is clearly a communist. How in GOD’s name, did he get in the US of A to begin with?!?!

  8. Chmeeee says:

    They removed the half cent from circulation in 1857 and then started rounding to the nearest cent. Adjusting for inflation, 1/2 cent in 1857 would be $0.12 today. By that standard, we could make an equivalent move by removing the penny, nickel, and dime; everybody would be forced to round to the nearest quarter.

  9. MaxH42 needs an edit button says:

    Hell, at our local farmer’s market a lot of vendors will just round down to the nearest quarter if I’m spending $5 or more.

  10. Torchwood says:

    It’s because of sales tax that we still have the penny. It’s because they advertise a product as costing $59.99 instead of $60 that we have the penny. That’s why we can’t eliminate the penny.

    Personally, I wouldn’t mind if the penny and the dollar bill be eliminated. I think that the dollar bill would cost less in the long run.

    • Southern says:

      Is there a marketing difference between $59.95 and $59.99?

      I know there is at $60, but I would bet the difference between .95 and .99 would be negligible from a marketing/pricing standpoint.

      • RvLeshrac says:

        Yes. $59.95 is so idiots will think you’re giving them a deal over the store across town.

        $59.99 is so idiots will think they’re getting it “for under $60!!!!!11!!1111!1111!1!111!!111ONEONEONEONEONE”

    • johnrhoward says:

      We don’t need pennies for things to cost 59.99.

    • AtlantaCPA says:

      The sales tax argument is not valid. They just need to post prices post-tax instead of pre-tax. This means their profit on each item would be different in different cities but there are other differences between states/cities anyway.

  11. frank64 says:

    I am perfectly OK with rounding both ways, I don’t think stores can really game the system because the sales tax could go either way. I would probably break even on average, but worrying about it is very petty.

  12. Portlandia says:

    I hate virtually all gyms. They’re scammy, and impossible to deal with. Every two years I go to Costco, buy a two year membership certificate and use that to renew. I never have any problems anymore.

    Not like the time Bally’s fitness Lied/forged my name on loan documents and took out a $2000 loan in my name to extend my membership. Bastards. NEVER AGAIN

  13. Bobster says:

    Getting rid of some coins and currency would be nice, but there is this thing called “Seigniorage”
    Which of course they say would cost the nations millions if not billions to take the money out of circulation.

  14. GreatWhiteNorth says:

    I, for one, am a supporter of Pennies and you won’t get any of mine until you pry them from my cold dead crusty sock under the foot of my dank old mattress in the guest room above the garage.

    Actually, I think the Canadian decision is correct and the cost savings to all concerned are valid.

    To those that suggest merchants will scam the new system to have it always round up… well that will be tough unless they make you pay for everything individually.

  15. haoshufu says:

    His accountant is going to hate him when doing bank and book reconciliations. Then comes the sales tax reporting error.

    • RandomLetters says:

      The sales tax will be right since its the change he’s rounding up. HIs cash books will be off at the end of the day though.

    • Southern says:

      There are no errors. He’s only rounding when giving change. If he owes someone 1¢ in change, he gives them a nickle instead. Nothing changes on the books, nothing changes in taxes, nothing changes in his register (other than he’ll be short in the cash drawer by a dollar or two a day at most).

      • RvLeshrac says:

        Some people have this really strange idea that sales tax calculations are done on a per-purchase basis, rather than an aggregate. As though 5% of 1000 $1 bills is somehow different than 5% of $1000.

  16. Mambru says:

    I thought pennies were made out of zinc now instead of copper

    • Cerne says:

      About 95% or more zinc IIRC. They’re still copper coated. Makes it really difficult if you’re trying to find pennies to copper coat quarters.

  17. AtlantaCPA says:

    I used to travel a lot in eastern europe and elsewhere, and everywhere I went I looked at what the smallest coin was in the context of their economy. Even in Hungary, where a single forint was 1/250th of a dollar at the time, it still bought you more over there than a penny would in the states. So the penny was worth less in its own economy. I didn’t go to every country in the world but everywhere I went the penny was still worth less than the smallest coin in its own economy.

  18. Fafaflunkie Plays His World's Smallest Violin For You says:

    Good for him. At least he’s being proactive to the potential shit-storm that will inevitably happen once pennies are eliminated for good up here. Although the Royal Canadian Mint has stopped minting those copper-coated hunks of crap that cost them more to mint than what they’re worth, they still have millions of them to circulate. Which would have stopped circulating right about now, except retail stores worried about dealing with Granny holding up checkout lines because she was being cheated out of 2 cents during the holiday shopping season. So those copper-plated pieces of sh*t will continue to circulate until next February.

    I see the retailers’ point on this, unfortunately. The last thing they need is for customers waiting behind Granny to be pissed off over something this trivial.

    • shepd says:

      The store should just give granny the 2 cents. Truth be told, the maximum the store will ever be out is 4 cents, and the average should be 2 cents.

      Most stores pay 3% per credit card transaction, and 15 to 50 cents per debit card transaction (now you are seeing why Tim Horton’s takes credit cards but not debit cards, I also have to assume they got a HOT deal with MasterCard and pay significantly less).

      That means that for any transaction $1 and over, the store will MAKE money by encouraging the customer to pay with cash by always rounding their change up. I know, myself, if stores refuse to round up all the time, I will pay with my debit. I pay nothing for debit transactions on my account, but the store will pay 15 cents.

      Stores need to realize they have pennies holding up a dollar. It’s the same with charging plastic bags where they aren’t required to charge for them by law (ie: Not Toronto). The profits made on them are slim enough that my decision not to shop at those stores requires HUNDREDS of new customers replace the lost income. I have noticed several stores here have relented due to, I assume, lost sales–the only steadfast holdouts are grocery stores, and that makes my life easy–WalMart price matches all their flyers, so I still save the same amount of money AND I don’t pay for bags, AND I don’t have to drive all over town to save my money. :^D

  19. shepd says:

    Fun fact: Change itself is completely optional. A store is welcome to keep your $20 bill in exchange for a 1 cent item (of course, you can choose to leave the 1 cent item there and keep your $20, but complaints they aren’t charging you fairly because they won’t give you change will fall on deaf ears).

    This, of course, means accurate change isn’t necessary either, though I assume if you aren’t going to be accurate in the store favour, you will need signage informing the customer of that fact.