A Dunkin' Donuts Store Exhibits Penny Sanity

One Dunkin’ Donuts store is taking a stand against the penny. A sign at the store reads “We will be rounding your change to the closest nickel. For example, if your change is $2.03, we will give you $2.05. If your change is $2.22, you will receive $2.20. For any customer who still would like their pennies, please just ask the cashier and we would be happy to accommodate you.” The change is designed to speed up service. Here’s hoping the initiative goes viral. (HT: David McCall and Meir Lindenbaum) [%comments]

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  1. Bek says:

    Whatever happened to “a penny saved is a penny earned.”
    I will gladly take the extra change if rounded in my favor, but I also would have no reservations in asking for my extra two cents if rounded in the stores favor. The people who wouldn’t ask for their change are probably the same people who funded my last trip to Hawaii — paid for by a 5 gallon jug full of loose change that I picked up from people that didn’t want it cluttering up their night stands or pockets!

    @msollot – I would ask for my change regardless of the number of people present.

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  2. Jerry says:

    I wouldn’t be so thrilled to bid farewell to the penny. This is inflationary. It won’t take long until the rounding progresses to the dime. After all, it’s easier to round by decimals than nickels. And, then it will be the dollar.

    Welcome to the Weimar Republic.

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  3. Roo says:

    Whats next? Oh ya, will just round up to the nearest dime. Them dam nickels just weigh to much. Wake up, they are debasing and inflating our currency again. If you really think a penny is worthless, look at what a pre 1982 penny is actually worth in metal and you’ll get to see what their up too. Inflation is the most cruel and sinister tax a government can impose on its people.

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  4. twicker says:

    @Paul/# 20: Reread the post. They round to the *nearest* nickel, not up. Hence the reason that $2.22 in change becomes $2.20 in change (meaning the store keeps the other $0.02).

    As to the pricing (for those that commented):
    1) If the store is doing this, they’ve almost certainly found that the majority of the time, the rounding goes in their favor (and enough in their favor to offset any losses). They’re a business, not a charity.
    2) It’s absolutely possible to price things with tax included (possibly depending on the municipality). In most places, it should be possible to back-calculate the taxes a business owes on $X amount of revenue, no matter what the cost is to the customer (it’s algebra: Revenue = Price + Tax; Tax = Price*Rate; therefore, Revenue = Price + (Price*Rate); knowing Revenue and Rate, you have one equation & one variable — you can calculate “Price.” Tax man is happy, b/c you paid full taxes on all the after-tax revenue.).
    3) As alluded to above, the reason stores charge $X.99 (or, more sneakily, X.99 with no dollar sign — people pay more) is because it *feels* different, and better, than $(X+1). Thus, stores sell more. Thus, stores have little incentive to stop.
    4) When tax is *not* included in the published price, people see the published price and think of that price as *the* price. When it *is* included, people pay attention to the extra cost of the tax (which they ignored before). Therefore, the store can garner more good will, and more sales, by not including the price of taxes. Again: including taxes in the price is a trivial algebraic exercise. However, it results in a decidedly non-trivial loss of sales for the store.

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  5. Mike says:

    It doesn’t matter what price the individual goods are priced at as long as the CASH exchange for the TOTAL TRANSACTION is rounded.

    In Australia only cash totals are rounded (up for totals ending in 8 or 9, down for 6 or 7). If you pay by debit/credit card then the exact amount is used. The 5c piece may soon follow the 1 and 2c into numismatic oblivion.

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  6. The Sandwich Man says:

    I owned and operated 3 sandwich shops near Atlanta in the 1970′s. I always set my menu prices to round to the nearest nickel after sales tax was added. My cashiers and customers loved the smoother process. And I did not have to waste time with counting and depositing the worthless coins.
    I guess I was way ahead of my time!!!

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  7. DQKennard says:

    On the other hand, doesn’t WalMart use their odd penny pricing as some visual indicator of markdown? WalMart prices are things like $x.y7. If they’ve marked it down (“rolled it back”), it becomes something ending in 6. Another round of markdown gets another specific pattern. That’s why you end up seeing clearance items there with prices like $2.43. Managers can look around the store or at sales and pricing sheets and instantly get a sense of slow-moving stock or consumer response to a specific markdown. There’s a case where pennies can provide actual information.

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  8. notmelbrooks says:

    They should round to the nearest quarter .

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