EST CB/EST GVT is looking for ways to remove small denominations of Eurocents.
Follows LTH CB Jun. 2023, proposals to use small coins more efficiently, see #177040.
Summary
Average of 50 tons of 1 and 2 cent coins into circulation annually, but much less end up in circulation again, thus due to production costs it is not practical to produce them.
People mostly get these coins as change at store, but rarely use them for shopping, the coins are clunky in the wallet, tend to get lost, and have little purchasing power.
In addition, the production and handling costs and environmental impact of 1- and 2-eurocent coins are disproportionately high compared to their actual value.
In order to reduce the need to use 1 and 2 eurocent coins, the Ministry of Finance, in cooperation with Eesti Pank, sent out a draft for consultation to interest groups to start rounding the price of the shopping basket to the nearest 5 cents at store checkouts.
This would be possible to prevent the waste associated with the production of coins.
According to the plan, consumers can continue to pay in Estonia with 1 and 2 eurocent coins, but consumers will no longer be able to return them as change in shops.
Rounding would only apply to the final price of the shopping cart when paying in cash at checkout, thus, the price of a cash purchase will decrease/increase by up to 2 cents.
The implementation of price rounding would result in a one-time cost for merchants who would have to reconfigure point of sales systems as well as business software.
Effectiveness
Feedback must be submitted within a month.
Mar. 2024 Bill Approved by Government
On Mar. 28, 2024, EST GVT issued an announcement stating a bill has been approved that will reduce the need to use 1 and 2 cents when paying with cash from 2025.
According to the plan, from 2025, when paying with cash at the cash register, stores will mathematically round the final amount of the shopping cart to the nearest 5 cents.
This eliminates the need to give back 1 and 2 cents as exchange money.
1 and 2 cents will remain valid and can be used when paying for purchases, however, as a change, the store would receive the smallest return of 5 cents from 2025.
There are no plans to round up to nearest 10 cents, or 5 cents as exchange money.
Rounding the pricing policy of stores and service providers does not change and the store will continue to be able to use any amount for pricing, be it 9.99 or 2.21 euros.
May. 2024 Bill Approved by Parliament
On May 15, 2024, EST GVT confirmed parliament approved draft establishing rounding rule for cash payments in shops, to no longer return 1- and 2-cent coins as change.
From 2025, when paying in cash, shops will round final cost of shopping to the nearest 5 cents and will no longer return small change, reducing need for 1- and 2-cent coins.
A purchase amount ending in one, two, six or seven euro cents will be rounded down, and an amount ending in three, four, eight or nine euro cents will be rounded up.
Rounding does not affect payment for purchases in 1 and 2 cents, if the buyer wants to use them, stores will continue to accept them and there are no plans to change this, however, from 2025, the 5-cent coins will then be the smallest changeable currency.
Rounding will only take place only when paying with cash, and it is the final amount of the shopping cart that is rounded, not price of each product or each service separately, however, nothing changes when paying by card, and the prices for that stay the same.
The payment method is always chosen by the buyer, and the merchant has no right to exclude one or another payment method, giving the consumers choice over payments.
For example, if the purchase invoice is rounded up and a consumer does not want to pay the merchant 2 cents more, they can choose to pay by card, rather than cash.
When buying in online stores, billing is done electronically and there is no rounding.
Answers to various questions on the process are provided in FAQs provided by EST CB.
President of EST CB Madis Muller, commented the rule is laid out so merchants have no reason to raise the prices of goods, with only final price of a shopping cart rounded up, not price of each separate product, and so merchants do not control purchases.
Aug. 5, 2024 Preparations Required
On Aug. 5, 2024, EST CB explained the 1 and 2 euro cent rounding rule, where from Jan. 1, 2025, the final price of the shopping cart will apply in all Estonian sales points.
Final price of cash purchases must be rounded to the nearest 5 cents at points of sale.
Merchants must set up POS systems, business software, be ready to notify customers.
Estonian Merchants' Association said despite rounding rule making cash payments quicker and coin handling costs lower, the change requires a one-time major effort, e.g., updating cash register systems, training staff, explaining changes to customers.
