The Central Bank of Ireland will be rolling out rounding of cash transactions on Wednesday 28th October 2015. The aim of this is to remove 1c and 2c coins from circulation because they cost more to mint than they are worth in monetary value.
In addition to the production costs, the vast majority of 1c and 2c coins are hoarded by individuals rather than circulated as part of sales transactions. Many stash coins in penny jars to be redeemed at a bank later, with an estimated value of €35 million. The cost saving exercise should yield a saving of around €10 million each year.
The key features of Rounding are:
- Rounding will be conducted on a voluntary basis
- 1c and 2c coins will remain legal tender
- Rounding will apply only to cash payments
- The total amount of any sale will be rounded down or up to the nearest 5c.
The sale total would be rounded as follows:-
- A transaction costing €10.21 or €10.22 would be rounded to €10.20
- A transaction costing €10.23 or €10.24 would be rounded to €10.25
- A transaction costing €10.26 or €10.27 would be rounded to €10.25
- A transaction costing €10.28 or €10.29 would be rounded to €10.30
Importantly, rounding only takes place on cash sales, so card transactions will remain at the original value. Rounding is currently only on a voluntary basis; a retailer does not have to inform the customer that rounding has been applied, any customer who wants their full change is entitled to it. Equally, the retailer does not have to round their sale totals.
Only the sale total is rounded, the items are still sold at their original value and subsequently the VAT allocation remains unchanged and VAT will only be paid on the unrounded amount.
Retailers should indicate that they are applying rounding through appropriate in-store signage; a notice on entrance-doors or at the till. The Central Bank will make suitable signage available to retailers, free of charge, prior to the rollout on 28 October
So, how can your TouchPoint EPoS software help?
Sale totals can automatically be rounded up or down to the nearest 5c. In drawer totals will adjust according to the modified sale value. The individual item values are not affected and therefore the NET, GROSS and VAT figures will remain the same, inline with the rounding rules.
Further information can be found at the Central Bank of Ireland website - http://www.centralbank.ie/paycurr/Pages/rounding.aspx