Comment by dyslexit
7 hours ago
The article also points out that some states and a lot cities require retailers to provide exact change. Congress would need to pass legislation to allow rounding nationally. I'm guessing in the meantime they'll continue holding pennies from previous years?
So, implement sales tax like Europe does VAT and include it in on the shelf price, and make sure all shelf prices end in 0 or 5. Then, adding up items in a cart will also end in 0 or 5, and the tax is already included, so there is no math beyond the addition that could change the total to anything ending in something that is not 0 or 5. No matter how people pay, cash or card, the price will be the same, and it will always end in 0 or 5. As an added bonus, customers don't have to wonder how much tax they'll pay, because that's already included in the price.
America is allergic to baked in taxes - you've got to keep the appearance of a deal even when there isn't one. America also embraces a lot of junk and hidden fees - ticketmaster is a great example of this.
I think consumers would love having baked in taxes and clear prices and were the government functional I'd hope that a consumer advocacy agency could enforce this - but that's simply not where we are right now.
Additionally, having baked-in taxes à la Japan would change how advertising works, since we don't have a uniform sales tax (unlike Japan). For example, I live in San Ramon, CA, which has a sales tax rate of 9.75%. If I drive just two miles north to Danville, the sales tax goes down to 8.75%. If I drive a few miles south to Dublin, the sales tax goes up to 10.25%. The reason is because California has a base statewide sales tax of 7.25% (with 1% of it going to local governments), and city and county governments are free to add up to 4% for local sales taxes.
By comparison, in Japan the consumption tax is 10% for most items (8% for groceries and takeout), and it's the same nationwide.
In addition, there are sometimes fees that are prohibited by law from being baked in. For example, California has a statewide ban on free "single-use" bags in grocery stores and some other businesses. These businesses are required to charge their customers for bags, and they are not allowed to bake it into the price. Some municipalities have extended this to disposable cups as part of an effort to discourage them in favor of reusable cups. For example, Santa Cruz mandates a 25 cent fee on disposable cups. The Costco $1.50 hot dog + drink combo is normally $1.50 + sales tax, but in Santa Cruz it's $1.50 + $.25 mandatory cup fee + sales tax (yes, the cup is taxable). I have yet to see someone bring a disposable cup to Costco or to other places where paper cups are sold, however.
Having baked-in taxes will require big changes about how taxes and fees work in America, the land of extra sales taxes, extra fees, surcharges, and tipping.
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Penalizing the poor further?
Is gas sold as a whole penny amounts in those locations? Where I am it's always something and 9/10ths of a cent.
Allowing gas stations to denominate their prices by the 10th of a cent has always struck me as a just an underhanded and extreme way to practice the "9.99" retail psychological trick. Why not allow retailers to price things 9.99999? Ridiculous.
It's because technically the dollar is divided into Dimes, Cents, and Mil. (this is why dimes say 'One Dime' on them instead of 'Ten Cents'.
So while the mil isn't really used anywhere else that regular people see any more due to inflation, it is a valid division of the dollar and that's why they are able to get away with it.
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Actually, I'd say by all means, allow them to price things $9.99̅ so we can all agree it's equal to $10 and be done with it.
of course 9.99...(repeating) is mathematically 10, so I have a hard time being against allowing that.
Turns out the station charges you a round number of cents per gallon. Then there are federal taxes, which are, IIRC, 24.5 cents per gallon. And then there's state tax, which varies from state to state but seems to always be x.4 cents per gallon.
So I don't think it's just "evil retailer tricks".
The amount is only rounded at the end of the transaction. Those fractions make a difference if you're buying more than a few gallons
Here in Argentina the law says they must be rounded down. Initially it was for 5 AR$cents, and some shops still has the oficial sign that says AR$ 0.05.
We unofficially drop the coins/bills when the reach ~US$0.03, so now we dropped the AR$50 bills and everythig in cash is rounded down to AR$100 (US$0.07).
(The only exception is the photocopy shop 2 blocks away from home.)
Credit cards are charged the exact ammount, with cents that are irrelevant.
> they'll continue holding pennies from previous years?
I think most of the ones from previous years are all in people's junk drawers, couches, etc., and only go back into circulation when someone decides to dump them into a Coinstar machine. Retailers are already reporting shortages.
If the national government literally stops creating a certain precision of money, i expect the "exact change" requirement should be invalid.
You volunteering your business to be the the test legal case for that? Or are you stocking pennies?
“change will be provided via Venmo” sign at the entrance :)
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