In the spring of this year, a bill was approved, which establishes a rounding rule for cash payments in shops, and from January 1, 2025, 1- and 2-cent coins will no longer be returned as change.
This means that stores will begin to mathematically round the final amount of the shopping cart to the nearest 5 cents when paying with cash at the checkout. According to the rounding rule, the purchase amount that ends with 1, 2, 6 or 7 euro cents is rounded down. An amount that ends with 3, 4, 8 or 9 euro cents upwards. The final amount of the shopping cart is rounded, not each product separately.
However, this change does not mean that you can no longer pay in stores with 1- and 2-cents – all currencies are official means of payment in the euro area, and it is still possible to pay for purchases with them. To date, six more euro area countries have introduced the rounding rule – Finland, the Netherlands, Ireland, Belgium, Italy and Slovakia. The last decision to abandon small cents was made by Lithuania, where this change will enter into force on May 1, 2025.
How does the rounding rule affect merchants?
The introduction of the rounding rule makes settling with cash faster and easier, and in the long run the costs associated with coin handling will also decrease. However, the implemented change also requires certain one-time efforts from merchants. For example, there may be one-time costs in the form of changes to cash register systems and economic software. A lot depends on the software in use here and the software partner/provider, but probably the change that takes effect will not require large development resources. It is definitely worthwhile to be ready and to find out in time whether or what steps are necessary to be ready on January 1.
Notifying customers should also be considered. In the case of cash payments made at a physical point of sale, the customer must be provided with information about the rounding of the final price of the goods or services in writing and in a clearly understandable way, e.g. on the wall or screen of the point of sale. You should also be prepared so that the customer service representatives are able to explain the situation to customers for whom the change comes as a surprise. At this point, it is possible to get more information from the website of Eesti Pank, where there is more detailed information and explanations about the change.
The rounding rule only applies to cash payments – nothing changes with a bank card or digital wallet, and the final amount of the shopping cart remains the same. Based on the data of the 1st quarter of 2024, there are still small businesses in Estonia that allow their customers to pay for goods/services only in cash. The share of such companies is about 2% and they are mostly active in the field of beauty services, vehicle repair or home and household work. As a comparison, it can be stated that the share of such companies in Latvia is almost 9% and in Lithuania 4%. From the point of view of merchants, they should be ready to offer the customer an alternative way to pay for goods/services in addition to cash payment. In certain cases, when paying with cash, the amount in the shopping cart may be higher than, for example, when paying by card, and the customer may therefore prefer card payment.
Riho Treumuth
SEB business segment sales manager
Source: online.le.ee
