21 April, 2009
no more 5 cents coins?
Australia may follow New Zealand on getting rid of 5 cents coins from circulation. In Australia, the 1c and 2c pieces were phased out in 1993 following New Zealand's lead. (New Zealand removed 1 and 2 cents coins from circulation in 1990.) The 5c coins in New Zealand were withdrawn from circulation in 2006. It looks like Australia will follow, according to news report.
For those who are not familiar with the system, what do we do when paying for items ending at 99 or 98 cents? If you pay by cash, they round it up at cash register since there's no 1 or 2 cents coins in circulation. You lose one or two cents. (to Don: a good reason why people should pay by plastic cards instead of cash.)
Okay we understand why shops like to price at something like $9.99 or $19.99, those prices sound better than $10 or $20. However in real life, many shops like to have prices ending with 98 cents. In such case, when you buy one item with cash, you lose 2 cents. To some smart shoppers, they would buy two items and make the ending 96 cents, and hence rounding it down 95 cents, and the shoppers would think that they make 1 cent profit. However, they pay more, and the shop sells more items. Okay, the real and dirty reason for shops who like to price their items with 98 cents ending is simple: Shops do not pay the GST (tax) on rounding. In most cases, they are either making 2 cents tax free, or sell extra items when shoppers are paying with cash.
(to Don: still not convinced why you should shop with your Credit Card or debit card? You earn rewards points!)
news source: Five cent coin not worth the hassle, retailers say (Sunday Herald Sun, 19 April 2009)
IT'S Australia's most shunned shrapnel, the 5c coin - and if shopkeepers and retailers had their way, the echidna-clad currency would be ditched.
Posted by Antony on 21 April 2009 10:54 PM | newstalk
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