If you hadn’t already heard, Canada is phasing out the penny. Long maligned and ignored, the tiny bronze-coloured coin will no longer be distributed as of February 4th, 2013. Despite its impending doom, the penny won’t be disappearing any time soon — that is, if retailers and other institutions choose to accept it (it’s not required by law). Regardless if a merchant welcomes it or not, existing one cent coins will continue to be a valid form of payment for the time being. Retiring the penny will save Canadians an estimated $11 million a year.
The Royal Canadian Mint is asking businesses to round their cash payments, either up or down. For example, a total that comes to $9.48 would be rounded up to $9.50 where as a total of $9.42 would be rounded down to $9.40. So, any total ending in 1 or 2 will be rounded down to 0, with 3 and 4 being rounded up to 5. Totals ending in 6 and 7 will rounded down to the nearest 5 with 8 and 9 rounded up to the nearest 10. This will take some getting use to.
Transactions that are paid for with a debit card, credit card, or cheque will not have the final total rounded. Electronic transactions (e.g. bank transfers, Paypal, etc.) will not require rounding.
An example posted by the Mint:
Tax (5%): $0.23
If you’re paying with a debit or credit card, your account will be charged $4.92. If you’re paying with cash, the total would be rounded down to $4.90 as the 92 is closer to 90.
Still have plenty of pennies lying around the house or car? You can still take them into the bank, exchange them for a wish at a fountain or well, donate them through a charity coin drive, plus many other useful applications.
For further information on the elimination visit the Royal Canadian Mint web site or call 1-800-O-CANADA (1-800-622-6232).