The Royal Canadian Mint will stop doling out pennies on Monday, meaning consumers and retailers will have to brush up on their rounding skills when buying goods and services in Canada.
Until the one-cent coins are depleted, rounding off prices to the nearest nickel for cash transactions will be the new normal. The coin will still be legal tender.
After-tax transactions ending in 1,2, 6 or 7 should be rounded down, according to voluntary government guidelines for retailers. Those that end in 3,4, 8 or 9 can be rounded up.
Electronic transactions such as debit and credit cards don’t need to be rounded, and will not be impacted by the phase-out, the government agency said.
"We're going to adopt the government-recommended practice," said Tammy Smitham, vice president of communications at Shoppers Drug Mart Corp.
"We will still be accepting penny as a form of tender, but we will not be issuing pennies back in peoples' change."
The launch of the penny phase-out will be held at a Shoppers in Ottawa, said Smitham. Diane Brisebois, chief executive of the Retail Council of Canada and Shelly Glover, the parliamentary secretary to federal finance minister will kick-off the event, as well as Ian Bennett, head of the Royal Canadian Mint.
The Royal Canadian Mint stopped making new pennies in May. As of Monday, it will stop distributing them to retailers and banks. The move is expected to save Canadian taxpayers around $11 million a year, the government said.
Phasing out the penny
Some organizations including the Canadian Federation of Independent Business have set up web pages to help with the transition.
For example, a cup of coffee that costs $1.63, including tax, could be rounded up to $1.65 if the customer wants to pay in cash. The price of the coffee will remain $1.63 if the customer pays with a debit or credit card, the group said.
A sandwich that costs $4.66 could be rounded down to $4.65 if the customer wants to pay in cash.
"Many business owners like the idea of phasing out the penny," said Dan Kelly, the federation's president and chief executive. "Since after-tax totals will be rounded both up and down, it's important that consumers are properly informed."
In a release last week, the Retail Council of Canada said it surveyed its members and more than half of Canadian retailers are ready for the phase-out.
It also found that 74 per cent of small retail businesses and 75 per cent of medium businesses will round manually at the cash register. However, 63 per cent of large businesses say they will change their cashier systems, which could cost them more than $100,000, the council said.
Shoppers changed their so-called point of sale system, but Smitham declined to say how much the overhaul cost, but that it was not "material."
Home Depot Canada said late last week it will automatically round down to the nearest nickel for all cash transaction, even for items that would typically round up. On cash return items, however, it would round up to the nearest nickel.
The hardware company commissioned a poll this year on the penny phase-out. It found that 88 per cent of Canadians did not know it was happening on Monday, while 41 per cent were uncertain of how retailers would manage the transition.