- Swedish rounding
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Swedish "öresavrundning" receipts (click to enlarge): Swedish rounding is a method by which the total monetary cost of a purchase is rounded to the closest unit of physicalcurrency . The term is used mostly inAustralia andNew Zealand . Most other English-language countries do not round. Many countries with other languages have similar rounding, but use other terms.Rounding may become necessary due to the lack of, or elimination of, low denomination coins. Since it may not be possible to make exact change for a purchase, rounding to the lowest denomination of coinage is required.
Rounding is applied to the total of all purchases, and only if a consumer is paying by
cash . If payment is being tendered usingcredit card ,debit card ,EFTPOS orcheque no rounding is necessary.History
The term came to popular use in New Zealand in 1990, when the 1 and 2 cent
coin s were removed from circulation. The method adopted by theReserve Bank of New Zealand for rounding was one based on a system then commonly used inSweden , following the removal of 1 and 2öre coins from circulation in 1972. It is called "öresavrundning" in Sweden, meaning "öre rounding".The
Reserve Bank of Australia followed New Zealand's lead, and usage of the term, when 1 and 2 cent coins were removed from circulation inAustralia in 1993. This method of 5c rounding has not been used in Sweden since 1985, when the 5 and 25 öre coins were canceled.In November 2006, New Zealand eliminated the 5 cent piece; rounding now takes place to the nearest ten cents.
The mechanics of Swedish rounding
Rounding with 5c intervals
This is the historical algorithm used in
New Zealand , but is still in standard use inAustralia . It involves rounding to the nearest 5 cents:
* round down to the nearest multiple of 5 cents for sales ending in 1c, 2c, 6c, 7c;
* round up to the nearest multiple of 5 cents for sales ending in 3c, 4c, 8c, 9c;
* values ending in 0c or 5c remain unchanged.Rounding with 10c intervals
* round down to the nearest 10 cent value for sales ending in 1c, 2c, 3c, 4c;
* round up to the nearest 10 cent value for sales ending in 6c, 7c, 8c, 9c;
* according to normal rounding rules, values at a 5c interval are rounded up to the nearest 10 cent value, but many retailers round down as a courtesy. [cite web|title=SUBMISSIONS of the NEW ZEALAND RETAILERS ASSOCIATION to the RESERVE BANK OF NEW ZEALAND in respect of THE 2004 COINAGE REVIEW|publisher=New Zealand Retailers Association |url=http://www.retail.org.nz/coinagereviewsubmission.html|accessdate=2008-07-12]In New Zealand, after the 5¢ coins were withdrawn from circulation on
September 30 ,2006 , the majority of retailers adopted a policy of rounding 5¢ down to the nearest 10¢ value. No new 5c coins had been minted since 2004.Rounding with 50 öre intervals
The system used in
Sweden since 1992 is the following: [cite web|title=Svensk författningssamling (SFS) — Lag (1970:1029) om avrundning av vissa öresbelopp|publisher=Parliament of Sweden |url=http://www.riksdagen.se/webbnav/index.aspx?nid=3911&bet=1970:1029|accessdate=2007-12-31]
*Sales ending in 1–24öre round down to 0 öre.
*Sales ending in 25–49 öre round up to 50 öre.
*Sales ending in 51–74 öre round down to 50 öre.
*Sales ending in 75–99 öre round up to the next whole krona.This means that upward rounding is more likely (50/48) than downward rounding. If a sale ending 25 öre were rounded downward, there would be no theoretical bias. In reality, however, the amount of transactions rounded upward is far greater, due to
psychological pricing , usually ending in 90 öre.Eurozone issues
Finland and theNetherlands practice Swedish rounding (by 5c) officially. The method is also commonly, though unofficially, used throughout many other parts of theEurozone . Often shops avoid rounding by having all prices already rounded.ee also
Related currencies
*
Swedish krona
*Australian dollar
*New Zealand dollar
*Malaysian ringgit (fromApril 1 ,2008 onwards)
*Hungarian forint (fromMarch 1 ,2008 onwards)
*South African rand (fromApril 1 ,2002 ), rounding is done to the nearest 5c [cite web|url=http://www.info.gov.za/speeches/2002/020402946a1001.htm|title=CESSATION OF MINTING OF 1 CENT AND 2 CENT COINS |date=2002-03-22|publisher=South African Government Information|accessdate=2008-08-14]Rounding related social issues
*
Efforts to eliminate the penny in the United States
*Take a penny, leave a penny References
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