Business Irish

Thursday 2 October 2014

Time for change as 85pc want to banish coppers

Published 15/03/2014 | 02:30

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THE few coppers at the bottom of purses and pockets could become a thing of the past – there is strong support among consumers and retailers for getting rid of the small coins.

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A new national survey shows that they favour the withdrawal of 1c and 2c copper coins. Some 85pc of consumers surveyed were in favour of extending an initiative nationwide to round up and down prices.

The research, carried out by Millward Brown Lansdowne, found that consumers were frustrated by small coins, especially as they are not accepted in parking meters and toll bridge machines. This just reinforced the view that the coppers have very little value.

More often than not the small coins end up being shoved into a jar and even when counted they get forgotten about, the research found.

The survey follows a pilot programme in Wexford where prices in shops were rounded to the nearest 5c at cash registers.

The Central Bank has now recommended the roll-out of a voluntary scheme across the State aimed at cutting the use of 1c and 2c coins.

The plan received overwhelming support in Wexford. It meant that retailers round all cash transactions to the nearest 5c at the cash register, removing the need for 1c and 2c coins in change.

The idea is to get rid of small denomination coins because they go out of circulation quickly due to stockpiling.

Each 1c coin costs 1.3c to mint, so there would be significant savings to the Exchequer if the coins were eventually withdrawn, the Central Bank said.

Five EU member states have already adopted a rounding policy that dispenses with the need for the small-denomination coins.

INFLATION

The countries include the Netherlands, Sweden, Finland, Denmark and Hungary, while Belgium is currently in the process of adopting it.

One of the concerns that consumers had before the Wexford trial was that retailers would round up the price of goods at the cash tills.

However, a mystery shopping exercise showed that in fact rounding had no inflationary effect.

Ronnie O'Toole, head of National Payments Plan, said he never expected prices to rise during the trial.

The Central Bank leads the National Payments Plan initiative, which is aimed at encouraging consumers to stop using cash in favour of electronic payments.

"Rounding only applies to total bills, not to the prices of individual goods. Quite simply, the price of almost all goods tracked over the nine weeks of the trial remained unchanged," Dr O'Toole said.

A decision to move to a voluntary system of rounding prices up and down nationwide will now be made by the Minister for Finance.

But even if Michael Noonan opts for rounding, the one and two cent coins would still keep their status as legal tender.

Irish Independent

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