From 1 January 2025, in all bricks-and-mortar points of sale the final price of the shopping basket must be rounded to the nearest five cents when paid in cash. The change in the law means that retailers no longer need to give 1- and 2-cent coins as change, and there will therefore be less need to put more such coins, which people very rarely use to pay with, into circulation in Estonia. Rounding the final price of the shopping basket is mandatory for all retailers who handle cash transactions. When paying by bank card, no rounding takes place.
From the new year, Estonia becomes the seventh euro-area country to apply a rounding rule, the aim of which is to reduce the number of 1- and 2-cent coins in cash circulation. Eesti Pank has so far put on average two truckloads' worth of 1- and 2-cent coins into circulation per year. Most of the small cents, however, never come back to the central bank, because although shops need them as change, people very rarely pay with them. Since this use of coins is not sensible, from the new year on, when paying in cash the final price of the shopping basket will be rounded to the nearest five cents.
What does the change mean for the consumer?
In the new year, when paying in cash in a shop, you should bear in mind that the retailer is required to round the final price of the shopping basket to the nearest five cents. The rounding can go either down or up by up to two cents. The prices of individual products and services are not rounded, so the rounding rule, by its nature, does not cause prices to rise. If you pay by another means, for example bank card, smart device, gift card or transfer, the purchase amount is still calculated to the nearest cent and no rounding takes place. So by choosing the means of payment, the buyer can decide whether rounding takes place, and the retailer has no choice in the matter. If the buyer wishes to use 1- and 2-cent coins to pay the rounded amount, they can still do so, because 1- and 2-cent coins remain official tender in Estonia and shops are obliged to accept all euro cents regardless of denomination. Under the law, the retailer is obliged to accept up to 50 euro cents regardless of denomination.
What does the change mean for the retailer?
The rounding rule will be mandatory from 1 January for every retailer selling goods and services to consumers for cash. The change first of all means making sure that point-of-sale systems and accounting software are ready to round the final basket total to the nearest five cents. It is also important to inform the customer about the rounding before payment, so the customer can decide whether to pay in cash or by bank card.
With the introduction of the rounding rule, retailers no longer need to obtain 1- and 2-cent coins as change, since from the new year the smallest required denomination of change will be 5 cents. As a result, retailers' costs of handling small coins will fall, and cash transactions will become more convenient and more sensible. After the rounding rule takes effect, 1- and 2-cent coins will remain official tender, and customers can pay with them if they wish.
As an exception, retailers may still give 1- and 2-cent coins as change, for example if there are not enough other cents in the till. This will be temporary, however, since after the rounding rule takes effect the number of 1- and 2-cent coins will start to fall. Retailers continue to be legally obliged to accept up to 50 euro cents regardless of denomination. More detailed principles, exceptions and examples that retailers should bear in mind regarding the rounding rule are set out in the information materials available on Eesti Pank's website.
So far, six countries in the euro area have introduced a rounding rule: Finland, the Netherlands, Ireland, Italy, Belgium and Slovakia. Alongside Estonia, Lithuania will also adopt the rounding rule next year, doing so from May 2025.
Eesti Pank, working with the Merchants' Association and the Ministry of Finance, has taken steps to ensure that the transition is smooth for both individuals and businesses. To that end we have prepared guidance and information materials for retailers, directly notified companies that handle point-of-sale software, and shared information through retailers' representative organisations, local governments and other representative bodies.
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