The Poor, Poor Penny....

[Daradon]

Originally Posted by Burninator

It all adds up. Lets say a company like IKEA who has like 20 tills and lets day that half of them get that 4 cents a minute. That would add up to $288 a day and roughly a $100,000 dollars a year. Obvisouly this a maximum type of senario and unlikely.

I basically don't like giving my money away to companies for nothing.

Penny or no penny, many huge companies like Imperial Oil trade when banks close, so they make a profit when they stand still.

Same theory.

1 cent isn't much, but multiply it by a million over 2 days.

There are a lot of companies that make money trading in lending over a day or two.

Probably same theory

[Ford Prefect]

Wouldn't we have to get rid of the GST if we want to get rid of the penny? Or would the rounding up and down factor into a business's GST remissions to Revenue Canada. I can't see how this would work, unless Revenue Canada allows business's to "estimate" their GST remissions by rounding things off. In my experience, Revenue Canada is not that flexible.

[Mr. Ski]

Originally Posted by Burninator

It all adds up. Lets say a company like IKEA who has like 20 tills and lets day that half of them get that 4 cents a minute. That would add up to $288 a day and roughly a $100,000 dollars a year. Obvisouly this a maximum type of senario and unlikely.

I basically don't like giving my money away to companies for nothing.

If IKEA really wants your extra 4 cents now, all they have to do is raise their prices by exactly that. Nobody in business is going to view this as some special, previously-unavailable winfall.

Originally Posted by Ford Prefect

Wouldn't we have to get rid of the GST if we want to get rid of the penny? Or would the rounding up and down factor into a business's GST remissions to Revenue Canada. I can't see how this would work, unless Revenue Canada allows business's to "estimate" their GST remissions by rounding things off. In my experience, Revenue Canada is not that flexible.

Nope; I don't see why. Keep in mind that nearly every transaction is rounded now anyhow. With GST currently at 6%, it only works out to exactly even penny's at ending totals of exactly $X.00 and $X.50. Everything else -- fully 98% of all potential transactions -- are rounded to the nearest penny. Not a huge jump to round to the nearest nickle. Either way it's just elementry math.

[Burninator]

Originally Posted by Mr. Ski

If IKEA really wants your extra 4 cents now, all they have to do is raise their prices by exactly that. Nobody in business is going to view this as some special, previously-unavailable winfall.

What? I don't understand. Of course if they wanted an extra 4 cents they would charge more, but why stop there? Why not charge an extra 5, 10 dollars on everything? Because this is not the same thing. When IKEA charges $19.99 for a funky lamp that is how much money IKEA is getting, not more not less. This extra 4 cents is free money for them that they get with out changing the sticker price.

[Mr. Ski]

Originally Posted by Burninator

What? I don't understand. Of course if they wanted an extra 4 cents they would charge more, but why stop there? Why not charge an extra 5, 10 dollars on everything? Because this is not the same thing. When IKEA charges $19.99 for a funky lamp that is how much money IKEA is getting, not more not less. This extra 4 cents is free money for them that they get with out changing the sticker price.

Just to be clear I appreciate the conversation and am not trying to be a wise-ass. It's all good.

As you indicate, everything comes down to price-elasticity-of-demand. They charge $19.99 because that's how much they want to sell it for.

However, my point remains: does it really matter if the funky lamp ends up totaling $21.19 with tax (rounded up from $21.1894 to the nearest penny) or $21.20 (rounded to the nearest nickle)? I can't imagine you loose sleep over the current system where you're getting bilked out of $0.0006 here, or up to $0.004999999_ somewhere else.

Following the argument the other direction: What makes the penny the perfect place to stop the rounding. Would bringing in 1/2 or 1/4 or 1/10th penny coins make transactions more fair? In a sense, yes they would, except the modern world has decided that they aren't necessary to come to a fair & reasonable price for the goods and services we buy. Too much trouble for too little gain.

My point is only that the penny has moved into the same territory and in that regard, I don't care about the 4 cents IKEA might possibly gain even with advantageous rounding practices. That's all.

[Burninator]

Originally Posted by Mr. Ski

Just to be clear I appreciate the conversation and am not trying to be a wise-ass. It's all good.

As you indicate, everything comes down to price-elasticity-of-demand. They charge $19.99 because that's how much they want to sell it for.

However, my point remains: does it really matter if the funky lamp ends up totaling $21.19 with tax (rounded up from $21.1894 to the nearest penny) or $21.20 (rounded to the nearest nickle)? I can't imagine you loose sleep over the current system where you're getting bilked out of $0.0006 here, or up to $0.004999999_ somewhere else.

Following the argument the other direction: What makes the penny the perfect place to stop the rounding. Would bringing in 1/2 or 1/4 or 1/10th penny coins make transactions more fair? In a sense, yes they would, except the modern world has decided that they aren't necessary to come to a fair & reasonable price for the goods and services we buy. Too much trouble for too little gain.

My point is only that the penny has moved into the same territory and in that regard, I don't care about the 4 cents IKEA might possibly gain even with advantageous rounding practices. That's all.

Well not to be a wise-ass, but techincally the government takes the GST not the store. So the government is stealing that small percentage of a cent. But I am use to the government stealing my money so it's no skin off my back. But I understand your point.

Honestly if it came down to it and they abolished the penny I would not lose sleep over it. It's not that I am cheap, but I just don't like huge corporations taking my money for nothing.