Here’s a snippet from the article. I cut the part out about Canada that @Jeruba is referring to:
Americans accumulate pennies not because we desire them but because we are entitled to them. If we pay for something in cash with more than exact change, we expect to receive back the difference; if the difference ends in any number other than 0 or 5, we will receive at least one penny. We are entitled to pennies because they exist. But imagine a world where they didn’t. Imagine a world where it was Canada.
Many Americans will be surprised to learn that Canada eliminated its 1-cent coin more than a decade ago. Canadians are aware of this — how little Americans know of their world, and how bewildering it must seem in the rare instances we contemplate it. When I interviewed Canadians about their abolition of the penny, I often sensed from their responses that they were handling me gently. “Our country,” one official from the Royal Canadian Mint informed me with an almost apologetic smile, “is just as big as yours.” For all I know, he could be right.
Canada got rid of its penny in 2013 because it cost 1.6 cents to produce and had, like its American cousin, become essentially worthless. Here is the most important detail to understand: Canada eliminated only its physical coin, not the mathematical concept of 1 cent. Payment by credit card, debit card, mobile phone or check — any kind of noncash transaction — is calculated exactly as it was before the penny was abolished. If, after tax, a bill comes to, say, $20.11, a Canadian paying by credit card will be charged $20.11. A Canadian paying by cash can expect to pay $20.10.
The final digit of Canadian cash transactions is rounded to the nearest nickel: 1 and 2, nearest to 0 nickels, round down to 0; 3 and 4 round up to a nickel — 5; 6 and 7, also nearest to one nickel, round down — 5 again; 8 and 9, nearest to 10 cents, round up. I admit that the thought I might be asked to pay, say, $3.80 (cash) for something that, according to the laws of God and man, has been calculated to cost $3.79 (cash) is not only reflexively infuriating to me but a potential source of permanent confusion. The Canadian government mitigated one of those problems (no hope for the other) with an information campaign that included signs with simple charts dividing potential prices into two columns: “Round down” and “Round up.” I asked Karl Littler from the Retail Council of Canada if there were still signs at cash registers explaining the rounding. “It’s 10 years now, so even the most obtuse people have pretty much figured it out,” he said, and laughed.
Although they hardly ever use penny coins, fears of being deprived of one to two per transaction are a knee-jerk concern for Americans invited to contemplate a hypothetical world without them. Rounding opponents point out that a disproportionate number of prices end in double nines, e.g., a $5.99 gallon of milk. Retail legend claims that the “odd cents” pricing strategy (a Parisian trick imported by Rowland H. Macy to his New York City dry-goods store) proliferated after the cash register’s invention in 1879, as a tactic to prevent sales clerks from stealing. If a customer paid $3 for a $3 item, the logic went, a cashier could stealthily pocket the bills; if the price was $2.99, the customer would be owed a coin; to open the register, the cashier would need to key in the sale, thus creating, within the register’s hidden recesses, an incorruptible record of the transaction. That consumers tend to associate these prices with better deals (incorrectly, according to studies) was an added benefit.
But while it is theoretically possible that a retailer could see a surplus profit of up to 2 cents on every transaction, the number of variables that need to be precisely manipulated to pull off the feat would require such convoluted mathematical and psychological calculations that it stretches credulity to suppose anyone would bother.
Composing members:
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Composing members:
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