THUNDER BAY – Business – The penny phase out will impact business. Ready to Round without the Penny? “While most small merchants and consumers may be aware of the plan to phase out the penny, they may not be clear on the specifics,” said Dan Kelly, CFIB president and CEO. “As we want to ensure the transition goes smoothly, CFIB has put together a set of on-line tools merchants can use to inform employees and customers.”
Penny Phase Out
The Government of Canada is encouraging businesses to start rounding after-tax cash purchases up or down to the nearest nickel. Since rounding will only occur during transactions involving cash, payments made through cheques, debit or credit cards will not be affected.
Effective February 4th, 2013, the Royal Canadian Mint will no longer supply pennies to financial institutions. On this page CFIB provides you with tools and tips to help your business make the transition to penniless cash transactions.
What does this mean for your business?
- Pennies are still legal tender, so if a customer has pennies on hand, they can still pay as usual.
- If a customer pays with cash and doesn’t have exact change, round their purchase up or down to the nearest five-cents. For example, if the total costs $1.01 or $1.02, it will be rounded down to $1. If it costs $1.03 or $1.04, it will be rounded up to $1.05.
- Rounding is done only on totals – that is, after the calculation of all applicable sales taxes. As such, don’t round prices on individual items. You also don’t need to update your cash register.
- There are no changes to cashless transactions using cheques, credit or debit cards.
“Many business owners like the idea of phasing out the penny,” added Kelly. “Since after-tax totals will be rounded both up and down, it’s important that consumers are properly informed.”