Businesses set for penny phase-out, says Retail Council of Canada
The majority of Canada's retail businesses are prepared for the disappearance of the penny and intend to use the federal government's proposed rounding guidelines when it begins, according to a survey of small, mid and large retailers by Retail Council of Canada (RCC).
"On February 4, most of Canada's retailers will be ready at the cash register to handle the phase out of the penny phase-out," said Diane J. Brisebois, president and CEO, RCC. "While we have been supportive of this initiative all along, we are grateful that the government delayed implementing the changes until this point, as retailers have needed the extra time to prepare."
Brisebois went on to say that these changes are voluntary and that she expects retailers' decisions will be focussed on doing what is best for their customers. While it seems that the majority will follow the federal government's proposal, many will continue to make exact change until the supply of pennies runs out. Others will choose to employ other approaches to providing change to their customers. She also noted that rounding only affects cash transactions and does not affect electronic forms of payment such as credit and debit transactions.
The Canadian Mint stopped producing pennies in the spring of 2012. RCC advocated for the phase-out of the penny to be delayed until after the busy holiday season, and the government agreed. On February 4, the Mint will stop circulating pennies to financial institutions and will also be encouraging them to send back any pennies that they have on hand.
RCC surveyed its members as to: their readiness for the phase-out of the penny; the approach they intend to use for rounding; and the potential costs to their business. The survey found that 55 per cent of retailers are prepared for the phase-out. It also found that 74 per cent of small retail businesses and 75 per cent of medium businesses will round manually at the cash register. However, 63 per cent of large businesses will be changing their point of sale systems. It could cost them more than $100,000 to do so.
"While smaller businesses will do the rounding manually at first and then determine the appropriate course of action, both in relation to cost and customer service, it is not a practical approach for large retailers with thousands of employees," said Brisebois. "This of course represents a substantial cost for retailers to enable them to maintain standardization and meet consumers' needs and expectations."
To answer questions pertaining to the penny phase-out, RCC has created a webpage "The Penny Stops Here". It contains Frequently Asked Questions, such as how the government's proposed rounding policy would work, and useful links for further information.
Retail Council of Canada (www.retailcouncil.org) is the Voice of Retail. Founded in 1963, RCC is a not-for-profit association which represents more than 45,000 stores of all retail formats, including department, grocery, independent merchants, regional and national specialty chains,
— Source: The Retail Council of Canada