From January 1, 2025, a new rounding rule will be implemented for cash payments across businesses, impacting how we use euro cent coins, particularly the Euro Two Cent Coin. This change, mandated by the updated Act on the Introduction of the Euro, requires merchants to round the final price of a shopping basket to the nearest five cents when customers pay in cash. The primary goal of this rounding rule is to reduce the prevalence of one and two-cent coins in circulation. These small denomination coins are infrequently used in transactions and are resource-intensive to produce, yet they remain necessary for providing change. By implementing this rule, the need for continuous production of these coins will be diminished.
Key Aspects of the Rounding Rule
It’s crucial to understand the specific conditions under which this rounding rule applies. Here’s a breakdown:
- Cash Payments Only: The rounding rule exclusively applies to transactions made with cash. Payments made via card or other digital methods will not be subject to rounding.
- Final Basket Price: Only the total price of your entire shopping basket will be rounded. Individual item prices will remain unchanged. If you purchase a single item with cash, that item’s price becomes the final basket price and will be rounded at the point of sale.
- Partial Cash Payments: If you use a combination of payment methods, such as cash combined with a card, voucher, or loyalty points, only the portion paid in cash will be subject to the rounding rule, applied to the final purchase price.
- Cash Refunds: When you receive a refund in cash for a returned product or service, the refund amount will also be rounded according to the same principles as purchases. This applies regardless of the original payment method.
- Return of Packaging Deposits in Cash: Cash refunds for packaging deposits will also be rounded following the new rule.
How the Rounding Mechanism Works
When you pay in cash, the cashier will round the final price of your shopping basket up or down to the closest multiple of five cents. This means the final cash price might be slightly less or slightly more than the unrounded total, by a maximum of two cents.
Prices ending in one, two, six, or seven cents will be rounded downwards.
Rounding down euro cent prices ending in 1, 2, 6, or 7 cents for cash payments. Example of euro two cent coin rounding down.
Prices ending in three, four, eight, or nine cents will be rounded upwards.
Rounding up euro cent prices ending in 3, 4, 8, or 9 cents for cash payments. Example of euro cent coins rounding up.
Examples in Practice
Let’s illustrate with a couple of examples:
- Imagine your shopping basket contains two items priced at €2.28 and €15.33, and you choose to pay in cash. The individual prices remain as they are. However, the total basket price, €17.61, will be rounded down to €17.60 at the till. If you were to pay by card, the amount would remain €17.61.
- If you purchase a single item costing €2.28 and pay with cash, the price will be rounded up to €2.30 at the till. Again, using a card would keep the price at €2.28.
It’s important to note that this rounding rule does not restrict businesses from setting prices at any cent value, such as €3.99. This rule solely applies to the final cash payment amount.
Furthermore, one and two-cent coins, including the euro two cent coin, will continue to be legal tender even after the rounding rule is implemented. You can still use them for payments, and businesses are obligated to accept them. The removal of one and two-cent coins from circulation entirely would require a decision at the European Union level, and currently, there are no such plans. Estonian law mandates that businesses must accept up to 50 valid coins in a single transaction, regardless of their denomination.
