Swedish rounding
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Cash rounding or Swedish rounding (
New Zealand English New Zealand English (NZE) is the variant of the English language spoken and written by most English-speaking New Zealanders. Its language code in ISO and Internet standards is en-NZ. It is the first language of the majority of the populati ...
) occurs when the minimum
unit of account In economics, unit of account is one of the functions of money. A unit of account is a standard numerical monetary unit of measurement of the market value of goods, services, and other transactions. Also known as a "measure" or "standard" of ...
is smaller than the lowest physical denomination of currency. The amount payable for a
cash In economics, cash is money in the physical form of currency, such as banknotes and coins. In book-keeping and financial accounting, cash is current assets comprising currency or currency equivalents that can be accessed immediately or near-i ...
transaction is rounded to the nearest multiple of the minimum currency unit available, whereas transactions paid in other ways are not rounded (for example
electronic funds transfer Electronic funds transfer (EFT) is the transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems. The funds transfer process generally consists ...
such as with
payment card Payment cards are part of a payment system issued by financial institutions, such as a bank, to a customer that enables its owner (the cardholder) to access the funds in the customer's designated bank accounts, or through a credit account and ...
s, or
negotiable instrument A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, whose payer is usually named on the document. More specifically, it is a document contemplated by or consisting of a ...
s such as
cheque A cheque (or check in American English) is a document that orders a bank, building society, or credit union, to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued. The person writing ...
s). Cash rounding typically occurs when low-denomination
coin A coin is a small object, usually round and flat, used primarily as a medium of exchange or legal tender. They are standardized in weight, and produced in large quantities at a mint in order to facilitate trade. They are most often issued by ...
s are removed from circulation owing to inflation. Cash rounding may be a compulsory legal requirement if such coins are no longer
legal tender Legal tender is a form of money that Standard of deferred payment, courts of law are required to recognize as satisfactory payment in court for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything ...
, or a voluntary practice where they remain in circulation but are scarce or impractical. Cash rounding () was introduced in Sweden in 1972 when 1 and 2
öre Öre () is the centesimal subdivision of the Swedish krona. In the Swedish language, the plural of ''öre'' is either ''öre'' (indefinite) or ''ören'' (definitive). The name ''öre'' derives from the Latin word ''aereus/aurum'', meaning gold. T ...
coins were withdrawn from circulation, and has continued to be applied at incremental levels as smaller denomination coins have been withdrawn. The current level of cash rounding in Sweden is to the closest whole krona, after the 50 öre coin was withdrawn in 2010. The Reserve Bank of New Zealand used the name "Swedish rounding" in 1990 when withdrawing their 1- and 2-cent coins. In Canada, cash rounding to the nearest nickel (5 cents) due to the elimination of the
penny A penny is a coin (: pennies) or a unit of currency (: pence) in various countries. Borrowed from the Carolingian denarius (hence its former abbreviation d.), it is usually the smallest denomination within a currency system. At present, it is ...
in 2013 is also called ''penny rounding''. When small-value coins are withdrawn, an alternative to the implementation of cash rounding is instead to increase the minimum unit of account to the smallest remaining currency unit and to round all prices and bank accounts to this value. Whereas cash rounding is an ongoing process, this alternative is a one-time conversion. It was done, for example, when the British farthing was withdrawn in 1960.


Practice

Rounding is applied to the total of a bill, not to the line items on the bill. Typically, the total is rounded to the nearest multiple of the smallest denomination, which may be higher or lower than the unrounded total. Where the unrounded total is an equal distance from two multiples, practice varies: merchants may be required or encouraged to round down rather than up, giving the benefit to the buyer. An equal distance is possible when the rounding interval is an even number. The introduction of cash rounding is typically accompanied by publicity campaigns for awareness among both consumers and implementing merchants; smaller campaigns will accompany the extension of an existing rounding system to a higher rounding interval.


Rounding with 0.05 or 5 intervals

* Prices are rounded down to the nearest multiple of 5 cents for sales ending in 1¢ & 2¢ (rounded to 0¢) and 6¢ & 7¢ (rounded to 5¢). * Prices are rounded up to the nearest multiple of 5 cents for sales ending in 3¢ & 4¢ (round to 5¢) and 8¢ & 9¢ (round to 10¢). * Values ending in 0¢ or 5¢ remain unchanged.


Rounding with 0.10 or 10 intervals

This is currently used in New Zealand, which eliminated its 5-cent coin in 2006, and in Hong Kong, which eliminated its 5-cent coin in 1989 and 1 cent note in 1995. In practice only utility bills, petrol stations and banks still keep the cent. All other businesses use only ten-cent intervals as follows: * Prices are rounded down to the nearest 10 cents for sales ending in 1 to 4 cents. * Prices are rounded up to the nearest 10 cents for sales ending in 5 to 9 cents. * It is at the discretion of the business to decide if it will round 5¢ intervals up or down: the majority of retailers follow government advice and round it down. In Sweden between 1985 and 1992, prices were rounded up for sales ending in 5 öre. In China, coins smaller than 1 jiao (10 fen or ¥0.10) are now rare though still valid. As a result, many shops simply truncate their bills down to the next 1-jiao increment, giving the customer a discount of up to 9 fen; however, many other stores round sales to the nearest jiao values, and 5 fen is usually rounded up. In Chile, the 1 and 5
peso The peso is the monetary unit of several Hispanophone, Spanish-speaking countries in Latin America, as well as the Philippines. Originating in the Spanish Empire, the word translates to "weight". In most countries of the Americas, the symbol com ...
coins were withdrawn on 1 November 2017 (but still legal tender), and rounding for cash transactions was implemented, prices are rounded down to the nearest 10 pesos if the value is $1–5, and rounded up if the value is $6–9. Most prices are already rounded to the nearest 10 pesos, and many small businesses round to 50 or 100 pesos due to the low value and availability of lower denominations. In Israel, 5 agorot coins were removed from circulation on 1 January 2008, after 1 agora coins had already been removed in 1991. Transaction amounts can still be specified to the nearest agora. Cash purchase totals are rounded to the nearest 10 agorot. A 5 agorot total is rounded up to 10 agorot. In
South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia. It constitutes the southern half of the Korea, Korean Peninsula and borders North Korea along the Korean Demilitarized Zone, with the Yellow Sea to the west and t ...
, the 1- and 5-won coins are not used (but still legal tender). Prices are generally rounded to the nearest 10 won (though generally to the nearest 50 or 100 won in many stores apart from supermarkets), and cash payments are rounded to the same. In
Ukraine Ukraine is a country in Eastern Europe. It is the List of European countries by area, second-largest country in Europe after Russia, which Russia–Ukraine border, borders it to the east and northeast. Ukraine also borders Belarus to the nor ...
, from 1 October 2019, the 1-, 2- and 5-
kopiyka The ( ; , ''hrn''; currency sign, sign: â‚´; ISO 4217, code: UAH) has been the national currency of Ukraine since 2 September 1996. The hryvnia is divided into 100 kopiykas (). It is named after Grivna, a measure of weight used in Kievan Rus' ...
coins were demonetized and withdrawn from circulation, with the 25-kopiyok coin softly withdrawn. From then all cash payments would be rounded to the nearest 10 kopiyok. In
Peru Peru, officially the Republic of Peru, is a country in western South America. It is bordered in the north by Ecuador and Colombia, in the east by Brazil, in the southeast by Bolivia, in the south by Chile, and in the south and west by the Pac ...
, the 1-céntimo coin was discontinued in 2011, and the 5-céntimo followed in 2019. Prices are now rounded to the nearest 10 céntimos. In South Africa, the production of 1 and 2-cent coins was discontinued in 2002, followed by 5-cent coins in 2012, primarily due to inflation having devalued them, but they remain legal tender. Prices are nowadays rounded to the nearest 10 cents.


Rounding with 0.25 intervals

The system used in Denmark from 1989 to 2008 was the following: *Sales ending in 1–12
øre Øre (plural ''øre'', , ) is the centesimal subdivision of the Danish and Norwegian krone. The Faroese division is called the ''oyra'', but is equal in value to the Danish coin. Before their discontinuation, the corresponding divisions of the ...
are rounded to 0 øre. *Sales ending in 13–37 øre are rounded to 25 øre. *Sales ending in 38–62 øre are rounded to 50 øre. *Sales ending in 63–87 øre are rounded to 75 øre. *Sales ending in 88–99 øre rounded up to the next whole krone. This system is used in the
United Arab Emirates The United Arab Emirates (UAE), or simply the Emirates, is a country in West Asia, in the Middle East, at the eastern end of the Arabian Peninsula. It is a Federal monarchy, federal elective monarchy made up of Emirates of the United Arab E ...
and
Qatar Qatar, officially the State of Qatar, is a country in West Asia. It occupies the Geography of Qatar, Qatar Peninsula on the northeastern coast of the Arabian Peninsula in the Middle East; it shares Qatar–Saudi Arabia border, its sole land b ...
, as the smallest coin in general circulation is the 25-fils/dirham coin, with the 1-, 5- and 10-fils/dirham coins being rarely encountered due to their negligible value.


Rounding with 0.50 intervals

The system used in Sweden from 1992 to 2010, in Norway from 1993 to 2012, and in Denmark since 1 October 2008 is the following: *Sales ending in 1–24
öre Öre () is the centesimal subdivision of the Swedish krona. In the Swedish language, the plural of ''öre'' is either ''öre'' (indefinite) or ''ören'' (definitive). The name ''öre'' derives from the Latin word ''aereus/aurum'', meaning gold. T ...
/
øre Øre (plural ''øre'', , ) is the centesimal subdivision of the Danish and Norwegian krone. The Faroese division is called the ''oyra'', but is equal in value to the Danish coin. Before their discontinuation, the corresponding divisions of the ...
round down to 0 öre. *Sales ending in 25–49 öre/øre round up to 50 öre. *Sales ending in 51–74 öre/øre round down to 50 öre. *Sales ending in 75–99 öre/øre round up to the next whole krona. In practice, the proportion of transactions rounded upwards is greater, due to psychological pricing of items ending in 90–99 öre. Rounding is only done on the total sum of a purchase, which makes that effect smaller. In some shops, all prices are already rounded to the whole krone, so that no rounding takes place. This system is also used in India after the 25-paisa coin and lower denominations were demonetised in 2011. This system is also used in Nigeria since 2007, when all coins issued before 2006 were demonetised, leaving the 50 kobo coin the only circulating denomination below one naira.


Rounding with 1.00 intervals

The system used in Sweden since 30 September 2010 and used in Norway since 1 May 2012 when both countries withdrew their 50-
öre Öre () is the centesimal subdivision of the Swedish krona. In the Swedish language, the plural of ''öre'' is either ''öre'' (indefinite) or ''ören'' (definitive). The name ''öre'' derives from the Latin word ''aereus/aurum'', meaning gold. T ...
/
øre Øre (plural ''øre'', , ) is the centesimal subdivision of the Danish and Norwegian krone. The Faroese division is called the ''oyra'', but is equal in value to the Danish coin. Before their discontinuation, the corresponding divisions of the ...
coins. *Sales ending in 1–49
öre Öre () is the centesimal subdivision of the Swedish krona. In the Swedish language, the plural of ''öre'' is either ''öre'' (indefinite) or ''ören'' (definitive). The name ''öre'' derives from the Latin word ''aereus/aurum'', meaning gold. T ...
/
øre Øre (plural ''øre'', , ) is the centesimal subdivision of the Danish and Norwegian krone. The Faroese division is called the ''oyra'', but is equal in value to the Danish coin. Before their discontinuation, the corresponding divisions of the ...
round down to 0 öre/øre. *Sales ending in 50–99 öre/øre round up to the next whole krona/ krone. Same system is used in Czechia, after the 10, 20 and 50 hellers were withdrawn from circulation in 2003 and 2008. This is also the system similarly used in
Jamaica Jamaica is an island country in the Caribbean Sea and the West Indies. At , it is the third-largest island—after Cuba and Hispaniola—of the Greater Antilles and the Caribbean. Jamaica lies about south of Cuba, west of Hispaniola (the is ...
since 15 February 2018, when all coins smaller than one
dollar Dollar is the name of more than 25 currencies. The United States dollar, named after the international currency known as the Spanish dollar, was established in 1792 and is the first so named that still survives. Others include the Australian d ...
were demonetised. India also uses a similar system since 2019, as the 50-paisa coin is seldom seen in circulation due to its negligible value. In Mexico there is a trend for most supermarkets to ask customers whether to round the total to the nearest 50¢ or the whole
peso The peso is the monetary unit of several Hispanophone, Spanish-speaking countries in Latin America, as well as the Philippines. Originating in the Spanish Empire, the word translates to "weight". In most countries of the Americas, the symbol com ...
to automatically donate the difference to charities. Should the customer choose the latter option, this system is used.


See also

* Charity rounding up * Mil (currency) * Penny debate in the United States * Take a penny, leave a penny


References

{{reflist Cash