On February 4, 2013, the Canadian one cent coin will be discontinued after 150 years in production.
Retailers will be faced with the question round up or round down in all of their cash transactions. For customers paying with debit or credit card, or by cheques, the exact amount to the penny will continue to be accepted and processed. However, when it is a cash transaction and the amount, for example, is $1.03 – what does the retailer charge? If they charge a $1.05 (rounded up to the closest nickel) then they are overcharging the customer. If they round down to $1.00, then they are loosing 3 cents. The cstore business has always been described as a penny business with low margins, so rounded down is not being welcomed with open arms. Pennies will slowly be phased out of circulation, and as expected, retailers will be stock piling pennies to tender to their customers while other retailers round up or round down. It will be interesting to see what back-lash if any, from consumers when round-up strategies are being used when they buy their favourite coffee in the morning. Why did the government eliminate the penny? Apparently, it costs the government 1.6 cents to manufacturer a penny. So that means the government has been in the business of loosing money for quite some time. What are your thoughts on the penny going bye bye?