CANADIAN RETAILERS REAP $3-MILLION A YEAR WITH DEMISE OF PENNY

Dec 18, 2017

By Jane Brown

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A University of British Columbia researcher believes Canadian grocery stores have benefited from the demise of the penny, but retailers disagree.

Economics and mathematics student Christina Cheng has released research that contends Canadian grocers are pulling in more than $3-million a year from rounding up prices to the nearest five cents.

She and a friend documented 18,000 prices at grocery stores and found that most ended in .99 or .98, meaning they’d be rounded up for cash transactions if tax wasn’t applied.

Cheng then used a computer simulator to create “grocery baskets” with various items and concluded that retailers have been profiting from penny-rounding.

But a statement from the Retail Council of Canada says Cheng’s research doesn’t reflect real grocery baskets or take into account various provincial taxes on bill totals.

It also says its members have found that penny-rounding is about 50-50, with half of the bill totals being rounded up and benefiting stores, and half being rounded down and benefiting consumers.

The penny was minted in Canada from 1858 to 2012.

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