The Dirty Secret Behind the Death of the Penny

With the Harper governments abolishment of the penny now upon us, Canadians are now forced to accept the rounding up (just wait for it) of every shopping bill from here forward.  At first glance it doesn’t seem like that big a deal, and retailers certainly wont mind collecting those extra cents, but there is a real question about the impact on everyday Canadians.  There is literally tens of millions of dollars annually at play here but who stands to gain from it?

The reasoning behind the deletion of the penny from Canadian currency circulation is sound.  When it cost’s more to make something than it is worth questions need to be raised about the soundness of the process.  The pennies demise came down to inflation and makes perfect sence from the governments point of view seeing as they will save millions on the cost of production of the little (slighty) copper coins.

Retailers, especially big chain store with millions of transactions a year are introducing a new phrase into their dialogues, Strategic Pricing.  The numbers 1, 2, 6 and 7 are bad while 3, 4, 8 and 9 are their new best friends, when referring to the final digit on your bill. Transaction’s with the biggest bump (a 2 cent rounding increase to the nearest 5 cents) have ending numbers of either 3 or 8, so expect to notice those numbers a lot when your final bill is tallied up on your next trip to the store.  Retailers easily have the most to gain as they can price products in an attempt to get an end number of 3 or 8 after taxes are included, gone are the days of the take a penny leave a penny trays beside the register.

As always seems to be the case, the only one with nothing to gain (instead millions to lose) is the everyday Canadian Consumer.  The government will save money with the death of the penny but no Canadian will ever see a cent (pun intended) of it,  Retailers are set to gain with the use of Strategic Pricing to maximize their profit, and then come the Consumers.  All the reassurances in the world by government officials that the pennies demise will even out in the end will not change the facts.  Consumers have no ability to select prices of products to maximize savings, instead they are at the mercy of retailers and their pricing policies and thanks to another government decision will be out many millions of dollars yet again.