Penny for Your Thoughts
Last week, the US Mint formally printed the last new one-cent pennies. Production, however, had already been significantly cut down in June following President Trump’s tweet that the coin should be abolished (it costs 3.69¢ to mint 1¢). In the last few weeks, access to pennies has already been drying up all over the country.
As a result of this, once you have run out of your supply of pennies and can no longer order more from the bank, we advise that you should put up some sort of sign at the register that says something like:
If paying with cash, please pay with exact change if possible. Due to the elimination of the penny by the government, cash transactions must otherwise be rounded to the nearest 5¢ increment.
You should not, even with notification, always round up, as there may be some legal risk in doing so. A few chains have announced that they plan to be rounding down all transactions, however in the aggregate that could prove very costly (unless those chains have increased all their prices first). Statistically, rounding to the nearest nickel should break even for both your business and the consumer overall.
The presence of our state sales tax of 6.625% makes it much harder to simply set all prices at nickel increments.
It’s unfortunate that the Administration has set out on this course without planning through all the outcomes. There is some concern that businesses may be opening themselves up to potential liability, both generally from unscrupulous trial attornies or under the Consumer Fraud Act, under the idea that the customer is not paying the posted price, or that sometimes they’re paying 1¢ more than if they used a credit or debit card.
Thankfully, we have heard that there is now a bipartisan consensus in Congress that this is a problem that needs an explicit national solution, and legislation will soon be introduced and moved swiftly to establish a national baseline set of rules, and protect all businesses from litigation.
We will keep you updated, as we may need your support to get the bill over the finish line in a quick fashion. If you run into any problems with this situation, please email Eric@njgca.org
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