Penny profit: Is it possible to make a mint on Canada's new rounding rules?
Published Monday, February 4, 2013 8:12AM EST
Last Updated Monday, February 4, 2013 1:14PM EST
As the Royal Canadian Mint officially stops distributing the penny today, and merchants wade into the unexplored frontier of rounding transactions to the nearest nickel, is there a way to profit from the change?
Under the new system, cash transactions will now round up or down to the nearest nickel once taxes are added in. That means, potentially, there's profit to be made if you shop carefully enough. If the majority of your purchase prices end in .01 or .02, or .06 or .07, they will typically be rounded down to the nearest .00 or .05. If your purchases tend to end in .03 or .04, or .08 or .09, however, store owners will typically round up.
So if you make 100 cash purchases (remember, rounding doesn't apply to debit or credit card transactions) that all result in rounding down, you could potentially save a buck or two. For bored penny pinchers, it might just be worth all the hassle.
But remember, this is a new frontier for Canada, and Ottawa isn't setting hard and fast rules. The rounding guidelines set out by the Mint are just that, guidelines. Store owners could decide to round up on all transactions -- a decision which would render your profiteering plan, much like the penny, obsolete.
The Royal Canadian Mint stopped making the coins last year, and is no longer distributing them as of today. The penny will continue to be accepted as legal tender, but as stores and customers use up their own supplies in the coming weeks and months, they will become less and less common and will eventually disappear altogether.
"We are today marking the end of an era in Canada's coinage history -- the final distribution of the penny," said Ian Bennett, president and CEO of the Royal Canadian Mint, at a ceremony Monday in Ottawa. "After producing this coin in Canada for the last 105 years, the sun is finally setting on one small part of our currency system which once played a large part in our daily lives."
Bennett said 35 billion pennies have been circulated in Canada since the coin was first struck on Jan. 2, 1908 at the Mint's inauguration in Ottawa. The final penny was struck last summer, on May 4, 2012.
"This coin was retired with as much respect as it was launched," Bennett said.
Bennett said retailers are now returning their pennies to the Mint and will not be distributing them to customers. He urged Canadians to collect their pennies, many of which have been hoarded in jars and piggy banks for years, and donate them to charity penny drives.
"We hope this will bring back pennies that have been sidelined for years and instead benefit worthwhile social and community projects," he said.