Sunday 18 March 2018

Retailers reject claims that they are rounding up prices for profit

deposit photo
deposit photo

Charlie Weston Personal Finance Editor

RETAILERS have been accused of ripping off consumers when change is handed out in shops under the new rounding initiative.

Rounding is where prices are moved up or down to the nearest 5c. The Consumers Association has accused shops of profiteering.

But Retail Ireland RGDATA and Retail Excellence Ireland all denied retailers are profiting from voluntary rounding.

Rounding off coins on bills to the nearest 5c began at the end of October after a successful trial in Wexford in 2013.

The initiative, which is being led by the Central Bank, aims to reduce the use of 1c and 2c coins.

With a transaction of €9.98, the bill can be rounded up to €10, if the shopper agrees.

A bill for €9.96 can be rounded down to €9.95.

But the current issue of 'Consumer Choice', the magazine of the Consumers Association, claims retailers are profiteering, and consumers have not been told they can opt in or out of it.

The magazine said the fact that so many items were priced at €4.49, €0.99 or €1.99 placed consumers at a distinct disadvantage.

"We are seeing a direct inflationary action that is creating a significant accumulation of profit for the retail sector," a comment in the magazine said.

Chief executive of the Consumers Association Dermott Jewell said the assertions of profiteering were due to his own experience and complaints the lobby group has received. But Retail Ireland, which is part of IBEC, rejected the claims. Director Thomas Burke said: "Retail Ireland and our members worked closely with the Central Bank during the development and roll-out of the rounding project."

He said his members adhere strictly to the clear rules of the rounding project.

RGDATA, which represents smaller retailers, denied its members were profiteering from rounding. It said the Central Bank needs to do more to explain rounding to the public.

Retail Excellence said the majority of retailers are rounding down, as they see this as an opportunity to build goodwill.

The Central Bank said the rounding initiative is a voluntary process involving cash transactions only.

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