As of today the Royal Canadian Mint stopped shipping pennies to retail stores and banks. The death of the penny was announced nearly a year ago in the federal budget. The Mint actually stopped producing the penny last May, but it wasn’t until today that the supply actually stopped.
The federal government has given retailers flexibility in their rounding calculations, but has provided guidelines that the majority of retailers will follow. The guidelines are simply elementary school rounding calculations. Round $.01 & $.02 down and $.03 & $.04 up – not rocket science. Research in countries like Australia and New Zealand, which have eliminated their penny equivalents show that the rounding evens out the plusses and the minuses.
Most retailers won’t invest in cash register upgrades and instead will leave it to the cashier to calculate the rounding. Although there’s some concern that this will cause delays at the checkout, it shouldn’t take the average clerk more than an hour to nail down the new system.
Although you may encounter some cash rounding this week, many retailers are phasing in the change over the next 4 weeks. By March you can expect all your cash transactions to be rounded.
How will this impact your mortgage? It won’t. The change only applies to cash transactions. All credit card, debit, cheque, or automatic withdrawal transactions will continue calculating to the nearest cent. Your bank account, credit card statements and investments will also keep calculating to the nearest cent.
It’s a welcome change for those of us frustrated by pockets full of heavy coins, that combined, couldn’t buy… well anything. Using cash is still a good way to budget our small daily purchases, and without pennies in our pockets we’ll be a little bit lighter and our bank accounts won’t be any poorer.