According to the Royal Canadian Mint, pennies will not long be produced or distributed. The last set of pennies that was produced was back in May of 2020. Is your business ready to do away with the penny? Take a look and see how it may affect you.
Each year, the Canadian government takes the time to overview the budget and makes changes to help benefit the country. This year, they decided to take the penny out of circulation. This penny is the smallest pricing unit, but over the course of the next year it will be obsolete. Pennies that remain in circulation can still be used, but once they are gone there will be no more. This has created a need for businesses to round their prices up or down.
If you take cash as a form of payment at your business, then you will find that these changes can make a difference. It might be just a minor change, but make sure that you are ready for it.
Here are a few things that will not change:
- Cash registers
- Prices of items sold individually
- Total price when accepting debit or credit
Here are a few things that will change:
- Total price when accepting cash payment
- Payments must be either rounded up or down based on 5 cent increments
Guidelines for rounding:
- 1 cent – 2 cents – round down
- 3 cents – 4 cents – round up
- 6 cents – 7 cents – round down
- 8 cents – 9 cents – round up
- 0 cents and 5 cents – no change needed
Here are a few examples for you to consider:
- $1.01 or $1.02, you will round it down to $1.00 even
- $1.03 or $1.04, you will round it up to $1.05
If customers come in to make cash payments and they still have pennies to use, then you won’t have to round the price at all. It will only be a matter of time before the businesses will need to turn all pennies in to the government. People can also take their to the bank to cash them out. Once they have recovered the majority of the pennies, they will then be melted down and they will be reused for other things.