As and from 28th October 2015, consumers in Ireland began receiving cash change rounded to the nearest 5c. The aim of this initiative is to reduce the need for 1c and 2c coins. This follows on from the successful trial conducted by the National Payments Plan in Wexford in 2013, which showed that 85% of consumers and 100% of retailers in Wexford supported the national rollout of rounding.
The key features of rounding are;
- It will be conducted on a voluntary basis – consumers can opt out of rounding and ask for their exact change.
- 1c and 2c coins will remain legal tender.
- It will only apply to cash transactions (not to debit/credit/store card, electronic or cheque payments).
- The total transaction bill (and not individual goods) will be rounded down or up to the nearest 5c.
By way of example; a total bill can be rounded up or down as follows;
- A transaction 0f €10.21 or €10.22 will be rounded to €10.20
- A transaction of €10.23 or €10.24 will be rounded to €10.25
- A transaction of €10.26 or €10.27 will be rounded to €10.25
- A transaction of €10.28 or €10.29 will be rounded to €10.30
Since the introduction of the euro, approximately €37 million worth of 1c and 2c coins have been produced in Ireland. A 1c coin costs 1.65c to produce while a 2c coin costs 1.94c to produce. Accordingly, their production costs exceed their face value.
Where a retailer is engaged in the rounding initiative, they can apply it automatically without asking the consumer. It will be up to you as a consumer to say if you do not want rounding to be applied. It is likely that any retailers engaging in the initiative will indicate that they are applying rounding by displaying a notice on entrance doors or at the till.
Businesses across the country may be facing a cost in terms of software development and staff training especially for larger retailers. However, the feedback so far in relation to the voluntary policy initiative led by the Department of Finance and the Central Bank has been positive arising from the Wexford trial initiative.
The Central Bank is hopeful that rounding will be enthusiastically embraced by consumers and retailers alike throughout Ireland. Charities are also hoping to derive a benefit from this initiative and are calling on people to donate some of their hoarded coins. Ireland is not the first EU country to introduce such an initiative. Belgium, Denmark, Finland, Hungary, the Netherlands and Sweden have already adopted a symmetrical rounding policy.