The old adage about looking after the pennies and the pounds looking after themselves is about to become much harder for Irish shoppers as the Central Bank aims to get rid of all one and two cent coins.
Yesterday it announced plans to extend a scheme that allows retailers to round bills with the consent of the shopper. The initiative was piloted in Wexford in 2013.
Bills ending in 1c, 2c, 6c and 7c will be rounded down to the nearest 5c and those ending in 3c, 4c, 8c and 9c will be rounded up to the nearest 5c.
The nationwide scheme, which will begin on October 28, will be voluntary and shoppers can still ask for their exact change. It will only apply to cash transactions and will be used on the final cash total of a bill, not to individual goods.
Ronnie O’Toole, an economist and progamme manager of the Central Bank’s National Payments Plan, said 1c and 2c coins would still be produced and accepted.
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“The coins still remain legal tender. The Central Bank will judge the demand for them in the new year and decide how many they need to produce,” he said. “They’ll still be produced but it’s likely that it’ll be at a much lower level. We expect demand to fall sharply.”
Mr O’Toole said the initiative was not expected to add to inflationary pressures. “The key thing about rounding is that the prices of goods on the shelf don’t change at all. We’ve talked to our Dutch colleagues who have had the scheme for 11 years now and it hasn’t affected inflation there,” he said.
Madeleine Quirke, chief executive of Wexford Chamber of Commerce, said there was no difference to prices during the pilot scheme.
“A very high percentage of the businesses in the county took part in the trial. We really had very little negativity in terms of feedback and it was embraced wholeheartedly. Both the consumers and the retailers appreciated the convenience of it,” she said.
Ms Quirke said the only concern was from some local charities. “They were worried that people might not give them their change, but hopefully people just started donating 5c instead. People usually put more than 1c and 2c coins into donation boxes anyway I think.”
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Since the euro was introduced in 2001, Ireland has spent €37 million issuing 1c and 2c coins, minting the coppers at three times the rate of the rest of the eurozone.
Catherine Noone, a Fine Gael senator who had campaigned for the initiative, said the scheme should save the state money.
“Most people find them [one and two cent coins] to be a complete nuisance. They build up in jars, on top of fridges and in furniture. They had started going out of circulation anyway because people weren’t using them,” she said.
“It costs more to produce them than they’re worth and the Central Bank is reluctant to continue producing them because they’re a cost to the state. A one cent coin costs 1.7 cents to produce and a two cent coin costs about 2 cents so it doesn’t make sense.”
Three eurozone members — the Netherlands, Finland and Belgium — have already introduced rounding policies.