Goodbye to the penny
Business and banking practices to change on Feb. 4
Wednesday, Jan 30, 2013 06:00 am
Taking the hammer to the piggy bank was never so easy.
Come Feb. 4, the Royal Canadian Mint will stop distributing the one-cent coin to banks across Canada. With a production cost of 1.6 cents per penny, this will save Canada about $11 million.
That same day, businesses will start rounding prices to the nearest nickel, as long as customers pay cash. Card payments and cheque deposits will still go to the cent, and the GST will be calculated on the pre-tax price.
All that comes with changes to prices in businesses, and banking options.
If you want to deposit a sum that includes pennies, say $3.53, “we give you three choices,” said Mike Dickinson, spokesperson for St. Albert’s Servus Credit Union.
“We can deposit the amount right into your account, or you can deposit all of the loose pennies and donate them to the Alberta Food Bank Network Association, or if you have another two cents to round it up we give you the nickel.”
Non-members can open an account to keep their pennies, or choose from the other two options.
Banks will not give out pennies after Feb. 4. That’s why rounding up money in your bank account is not a bad idea, he added.
Nelson Braz, branch manager for ATB Financial St. Albert North, said people started bringing in rolls of pennies in the past weeks. He expects a lot will also continue holding on to their piggy banks.
“Human nature is to procrastinate until the actual deadline. Pennies represent your work and people are still collecting them,” he said.
He added that ATB Financial will continue to accept pennies but will ship them out to the Canadian Mint come February. Cheques with penny amounts included are deposited as usual.
For those wanting to hold on to their favourite copper-coloured coin, local merchants intend to keep a few in their back pockets.
La Crema Caffe is currently repricing its menu according to government guidelines. Like most businesses, it will round down prices below three cents and round up prices above three cents to the nickel.
Owner Robert Logue said he won’t miss the penny. In fact, business may get a little easier not having to deal with it, he said.
But he’s keeping a few coins – just in case.
“I don’t think it will be a really big issue and if it is I have a jar of pennies and I’ll give the customers a penny if they want one,” he said.
Angela Chatwin at The Bookstore on Perron Street is holding on to one or two of her pennies as well.
While rounding up and down prices doesn’t worry her, she’s a little annoyed about having to change her book manager program.
“As a merchant it will be a pain. We have to fix all of our computer programs and there’s a lot of work other people have to put in this,” she said.
While most people don’t pay with cash anymore, she won’t argue with those not wanting to pay the extra penny to round up the price.
“If they want to give me $6.99 I take it. We won’t argue with customers over the penny,” she said.
“I think it will be a little confusing for a while but you get used to it. They phased out the dollar bill and the two dollar bill and we will just get used to it.”
Dickinson said a lot of people are moving toward electronic purchases now, already viewing the penny as a nuisance.
And banks will have an easier time handling cash without it, he said.
“I think that’s part of the movement, just the convenience. And from the Mint’s point of view there will be savings of millions of dollars annually,” he said.
Braz expects the penny won’t be gone from people’s pockets for at least five years. And banks are good about accepting phased-out tender, he added.
“There are a lot of piggy banks out there and we need to be mindful of that,” he said.