All change as new rounding plan spells end of 1c and 2c
Published 20/10/2015 | 02:30
Nine out of every 10 retailers across the country are expected to embrace a new scheme to end the use of 1c and 2c coins in circulation here.
The Central Bank yesterday launched the new rounding scheme, which will see cash transactions rounded up or down to the nearest five cent, thus removing the smaller bronze coins.
Ireland is following the lead of six other EU countries in doing so.
A trial run has already been carried out in Wexford which, according to the Central Bank, was welcomed by both shoppers and retailers.
The changes will relate not to individual prices, but the final bill and therefore the change handed back to shoppers.
Amounts ending in 1 or 2 will be rounded down to the nearest five cent, as will amounts ending in 6 or 7 while other amounts will be rounded up.
So for example if a shopper buys two individual goods priced at €10.99 and €3.48, they will remain at these prices but the total bill (€14.48) would be rounded up and the shopper would received only 50c change, instead of 52c.
Despite some concerns from both shoppers and retailers, the Central Bank says the amount should even out over time. An analysis of the scheme in Wexford showed there was no impact on inflation.
The scheme, which rolls out from October 28, will work on a voluntary basis - with shoppers allowed to ask for the true change back it they wish.
Speaking at the launch, Dr Ronnie O'Toole from the Central Bank said he is hopeful that both retailers and shoppers will get behind the scheme which he said has proved popular in Belgium, Denmark, Finland, Hungary, the Netherlands and Sweden.
"We've seen in other countries where it has worked that take-up by retailers is 85pc - 90pc. It will take a little time to get up to those levels but we're very confident this will be a big success in Ireland given everything consumers and retailers have said to us about these coins," he said.
The advantage for the retailer, according to the Central Bank, is that they no longer have to count small coins at the end of the day's takings and deposit them in banks.
"All this takes time and money for coins which are very little value. One kilo of the coins is €4 so they're heavy, they're small, they're hard to determine and they cost a lot of money to manage even though they are of very little value in of themselves.
He added there are two and a half billion, or €37m worth, of 1c and 2c coins down the backs of couches and in jam jars in people's homes around the country which keeps them out of circulation.
Concerns have been raised that charities will miss out on the small change shoppers used to donate at the checkout.
However, Dr O'Toole said they have been liaising with charities and all are in support of the initiative.
"These coins drop out of circulation because retailers give them to consumers who put them in jam jars. If consumers were giving them to charities in a huge way then the charities would deposit them in banks ... It doesn't happen," he said.