The last-ever penny will be minted today in Philadelphia

Some interesting complications with rounding I had not heard about before were mentioned here, worth noting I think, especially given the prominence of SNAP in the news lately:

>Four states - Delaware, Connecticut, Michigan and Oregon - as well as numerous cities, including New York, Philadelphia, Miami and Washington, DC, require merchants to provide exact change, according to the National Association of Convenience Stores (NACS).

>In addition, the law covering the federal food assistance program known as SNAP requires that recipients not be charged more than other customers. Since SNAP recipients use a debit card that’s charged the precise amount, if merchants round down prices for cash purchases, they could be opening themselves to legal problems and fines, said Jeff Lenard, spokesperson for NACS.

>“Rounding down on all transactions presents several challenges beyond the loss of an average of 2 cents per transaction,” Lenard said. “We desperately need legislation that allows rounding so retailers can make change for these customers.”

For the SNAP law, could they just round down SNAP purchases in the same way to be compliant?

just make the price a multiple of five cents

They probably will, but that means a POS software update on a tight deadline.

State and local taxes make this infeasible

Retailers don't, like, have to add sales tax on top of listed prices.

They just have to pay it.

Now is our chance to switch to European style "you pay the price it says on the shelf"!

> State and local taxes make this infeasible

I don’t see why that would be the case? In my country, most prices with VAT (which is what you’re charged) are nice, round numbers, but not the price without VAT.

I suppose the stores set a target price, and then adjust it a bit to make the price + VAT a “nice” number.

Is there a reason that couldn’t be done to make all prices + VAT multiples of 5c?

It's just American custom to exclude some taxes from the posted price. Many countries include all taxes in the price, something I've always wished we would do in America. After that, I'd love to see the elimination of the custom of always ending fuel cost per gallon in 9/10 of a cent.

No, it's illegal in many, looks like most states:

https://www.avalara.com/blog/en/north-america/2019/07/retail...

They can round down the card transactions too if it’s really a problem to charge differing amounts.

For those that seriously think this would be a major problem there was a comedy skit circulating in Australia when this happened. A guy would push his car to the petrol pump, fill with 2c of petrol, rounded down to 0. The guy at the counter just laughed at it. You could in theory do this 1000 more times (would take hours) for $20 of free petrol. At least until the worker got sick of it and enforced the whole right to refuse service.

Oh no, a made up problem that's easily solved by changing the price slightly in any direction, whatever will we do.

The SNAP equal treatment rule requirement works in both directions: Prices cannot be higher or lower for SNAP recipients. As a retailer, there is an option to request a waiver, though.

Rounding sales tax on each item will often result in a different price than rounding once for the total. The store will collect the wrong amount of tax that way.

How does this work with coupons, discount for loyalty card holders, etc.?

Presumably that's fine because a SNAP recipient has access to those same discounts. So wouldn't this be the same - the "cash rounding" discount is available to SNAP and people paying cash?

In the Netherlands cash payments get rounded to the nearest 5 cents, in both directions. Card payments are not rounded. If I’m not mistaken, you can still demand exact change according to the law and you’re allowed to pay the exact amount (cents are still legal tender). Most merchants wouldn’t be able to give you exact change, so it depends on the situation what would happen. I’ve never heard of such a situation happening, though.

Several reasons, it really is a mess.

The local tax is set by multiple independent tax authorities that change their taxes independently, the tax you see is the aggregate of those independent authorities computed separately, which do not coordinate with each other.

Some of these taxes are conditional at point-of-sale, late-binding the taxes, such that different customers are subject to different rates across these tax authorities such that it is unlikely to round to exactly 5c.

It is widely illegal to not display the true price and taxes paid separately. Trying to retcon a price and taxes for rounding purposes that is also strictly consistent across customers so as to not violate the law is not trivial.

And on top of all of this, the Federal government does not have the authority to regulate the way States and various locales structure their sales taxes. It is a herding cats problem.

So, that sounds like a yes, they could round up or down SNAP purchases just like cash purchases.

IIRC, in New York it’s illegal to absorb sales tax on individual items because by law it’s a consumer tax collected by the business and explicitly not a tax on the business itself, but - and it’s a pretty big exception - anything sold as a bulk good can include the tax in the price. That includes things like liquid fuels, grains or candy by the scoop in the supermarket, loose sand/gravel/salt/whatever for outdoor use, and things like that. It’s been a long while since I had to set up an ecommerce site for New York though.

That makes too much sense, which is why it won't happen. Though I'd be all for it.

With some 5th grade algebra, one can adjust the total of a transaction to result in a round number after taxes.

Besides that, the law (at least where I live) is that the tax must be paid, but it does not specify by whom. It's completely feasible for a retailer to pay the 2 cent difference in the tax and charge the customer a round number.

Is this really the state of American education where a percentage calculation makes a very simple situation literally impossible? You can think of no other way to overcome the complicated calculations of checks notes x times 1.06?

No, because they'd still be paying less/more than people paying with credit cards, debit cards, or checks.

Come on, this is not complicated. It's elementary algebra. You sum the rounded prices, then add a credit or surcharge of 2 cents to make the tax come out to a round number.

The tax is on the actual, real amount in your transaction subtotal. You are charged sales tax on the actual, real money you pay for the entire transaction. Then you multiply by 1.06 or whatever the tax rate is. That's how sales tax works.

If one rearranges the equations as we all learned in 5th grade, one can compute the amount that the subtotal must be to get a round number after tax. Then you charge or credit the customer the difference.

Alternatively, the retailer can simply pay the 4 cent difference in sales tax.

That's it. You either do algebra or just pay the difference. It is not complicated.

It's not like pennies just cease existing. You just can't buy them from the mint anymore.

I bet if you give customers an easy and free way to deposit change or to turn it into larger denominations you easily get enough pennies to delay ther update a couple years

You have to do this algebra per state and locale, and your reward is higher advertised prices than the shop next door. I think you both underestimate the problem and overestimate everyone involved in retail, especially the consumer.

I’m not saying it’s hard, I’m saying there is enough friction where it’s just not going to happen without legislation mandating it.

Round them all. Why is this so difficult?

Just show the price including tax. (half-sarcastic, because obviously that would be an unpopular change for sellers because it makes the visible number go up, but it would solve two problmes...)

They could still set the post-tax price to something that results in round numbers, at downside of the pre-tax price having more decimals.

There are a lot of solutions, as everyone has mentioned. The problem is not hard, it’s “what color to paint the bikeshed” territory. But we’re still having to solve a problem on a tight deadline based on a tweeted proclamation with no federal legislature specifying exactly what solutions are allowed and what solutions conflict with existing law.

I had this same idea and seem to recall even trying it, but it was mostly thwarted when they added minimum liquid delivery amounts.

It's the same way with the penny.

Tax on a 0.99 item isn't coming out to an exact penny multiple.

So stores are already dealing with this situation

> it’s just not going to happen without legislation mandating it.

Obviously, and I don't think anyone said otherwise.

> It is widely illegal to not display the true price and taxes paid separately. Trying to retcon a price and taxes for rounding purposes that is also strictly consistent across customers so as to not violate the law is not trivial.

Having lived in Europe, this should be changed. It makes it infeasible to keep track of your total bill as you shop. The amount without tax should be printed on the receipt, if you care to reference it.

So, lobby for changes to the structure of those taxes so that's not a problem. Tthe simple solution is changing them from surcharges adding a percent onto posted prices to making them a percentage taken out of the posted price; so that coin availability is only an issue in the improbable event that you are paying your sales tax bill in cash.

Of course, retailers don't want tax-inclusive posted prices, but... ::shrug::

If someone demands exact change is it allowed to give them more? What if you don't have the exact change?

I've seen stores advertise "we pay your sales tax" like furniture outlets. Wouldn't this allow for legal priced items?

The issue is that the legal change would have to be made independently across thousands of decentralized tax authorities. Herding that many cats is infeasible so it can't be part of a plausible solution. In some jurisdictions, the legal process required to make the changes have effectively insurmountable voting thresholds.

It may not be convenient but any realistic solution has to recognize the hard facts that shape the nature of problem.

Right, but getting fined in this situation means the government is incompetent. They should just tell retailers the "right" thing to do and not fine any retailers that follow the guidelines.

The idea that this is complicated legally is an example of why so many Americans are so frustrated with their government. Common sense should rule the day, not mindless legalism.

> Just show the price including tax.

With a tax rate as precise as 1000ths of a percent in many jurisdictions*, you'd need extreme precision on the price tag (e.g. $11.798625), OR you need to substantially overcharge for tax (rounding up the tax to the penny or nickel on each individual item, instead of on the total of ALL items).

And sales tax rates can even be different from ONE CITY BLOCK TO THE NEXT.

* Arizona: 10.725% Hawaii: 4.712% Minnesota: 7.875% etc. https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_Stat...

Even with just a 6% tax, you end up with prices that need 4 digits of precision after the decimal (e.g.: $11.6494). That issue extends over a wide range of pre-tax/input prices, so one would have to DRASTICALLY change the prices so that the price including 6% tax rounds to even a penny, let alone a nickel.

While you could calculate a price that (after tax) would round a single item to the nearest nickel, it's completely IMPOSSIBLE to do so with unknown numbers of multiple items.

In addition, tax rates in the real world aren't just single-digit percentages. They have precision of 1/1000th of a percent, making such a calculation much more challenging.

Arizona: 10.725% Hawaii: 4.712% Minnesota: 7.875% etc.

https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_Stat...

And sales tax rates can be different from ONE CITY BLOCK TO THE NEXT, so a company with more than one location would find it IMPOSSIBLE to advertise their prices at all.

The issue with "common sense" is there's no way to run anything based on it because you'll get 100 different ideas of what that means in any situation. 90% of customers would be fine with the rounding to the nearest 5 cent plan but there's a streak of stubborn people who'd refuse to accept it and waste some legal time trying to get proven 'right' so the stores want legal clarity so they don't have to deal with that.

Anyone can have a coupon the law is about not special fees or discounts to SNAP recipients, and since EBT/SNAP cards are essentially debit cards them always being charged exact change could be litigated as differential pricing in theory, which in a country as big and sue happy as the US means someone will try it eventually.