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Comment by RossM | Hacker News Reader

Forgive my ignorance, but doesn't there need to be a minimum-value coin in circulation to facilitate transactions? For example, I go to a shop and buy something for £4.99 and pay with a £5.00 note - do I get any change in return?

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This is handled by rounding. In the US many businesses already opt out of pennies and just round things down to the nearest 5 cents. It's just an extension of the rounding they already do (for instance when an 8.5% sales tax is added to a 1 dollar purchase, the half cent will be rounded even when the business uses the penny).

Interesting historical note is that when the US half penny was removed from circulation due to it being nearly useless, it was worth approximately 8 cents in today's money.

Most places that have abolished low-denomination coins use Swedish rounding (or at least that's what Wikipedia calls it): when paying with cash, round to the nearest (sometimes this will be up, sometimes down) payable price.

https://en.wikipedia.org/wiki/Swedish_rounding

You are clearly too young to recall the Half New Penny piece. I visited the UK in '84 as a young'un, and recall the half-penny being useless, since you had to have two of them together to purchased the cheapest things (at a penny). Before decimalisation, what was the previous smallest coin? The farthing was pretty common, but at one stage it got down to the quarter-farthing (roughly one-four-thousandths of a pound sterling). We also see it in modern currencies, as Bitcoin gets traded in smaller and smaller amounts.

Ultimately, the smallest useful transaction is the smallest value you need a coin (or token) for. Here in Australia, we abolished our 1c and 2c pieces decades ago, and apart from very temporary hand-wringing from some quarters, it's never been an issue. People just weren't purchasing things with a value of 1c and 2c, and getting that in change meant that you had to collect a bunch of them in order to purchase something else.

http://en.wikipedia.org/wiki/Halfpenny_%28British_decimal_co...

If you pay in cash it gets rounded up or down e.g. $1.03 becomes $1.05 if it's $1.02 it's $1.00 but if you pay via debit card or credit card it doesn't change.

Here is the government's explanation http://www.cra-arc.gc.ca/gncy/lmntnpnny/menu-eng.html

It depends. In Canada, legally, cash transactions may be rounded to the nearest 5 cents, so you wouldn't get change. In practice, many merchants round down, so you'd get 5 cents change.

Well there's GST+PST added in Canada depending on province so that $4.99 item would probably cost $5.58 then they round the price since the penny is gone, so $5.58 would be $5.60

Retailers are supposed to round up/down depending on amount but you will quickly find that everybody is rounding up unless you say something.

In Canada, no. Every transaction is rounded to 5 cents, so in your case, no change

If it was 4.97 it would go for 4.95 though

Unless you pay by credit in which case it's exact.

As to how it works, unlike VAT added into the price, we've HST (varies ~13%) or GST (5%) to round up or down by a few pennies on top of the stated price. I'm a bit surprised this is news. It's been well over a year.

You already round to the nearest penny on your transactions, rounding to the nearest 5c isn't that much different. Especially when it only applies to cash transactions.

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