Rounding to the nearest nickel for cash purchases proposed by Alaska lawmaker

Suzanne Cohen says she hasn’t had trouble coming up with enough pennies when making cash purchases. But since the copper coins are no longer being minted she doesn’t object if future purchases are rounded off to the nearest nickel.

“If they’ve gotten rid of it it seems like it’s only a matter of time, so this is probably the right thing to do eventually,” she said during the noon hour on Monday at Rainbow Foods.

A hour earlier and a block away at the Alaska State Capitol, a bill was introduced rounding cash purchases to the nearest five-cent sum by Rep. Dan Saddler, R-Eagle River. House Bill 281 is similar to legislation introduced in other states following the Trump administration’s decision last year to stop making new pennies.

“After the U.S. Treasury decided last fall to stop minting pennies, they’re disappearing from circulation faster than they expected,” Saddler stated in an email to the Juneau Independent on Monday. “As pennies get more scarce, we should make sure businesses can’t round transactions up or down to their advantage. My HB 281 simply sets consistent, fair standards for how cash transactions should be rounded to the nearest nickel, to protect Alaska consumers and businesses.”

Practically applied, it means a shopper handing $2 to a cashier would get no change back from a $1.98 purchase, but a nickel back from a $1.97 purchase.

“If the total ends in one cent, two cents, six cents, or seven cents, the total is rounded down to the nearest amount divisible by five cents; (2) if the total ends in three cents, four cents, eight cents, or nine cents, the total is rounded up to the nearest amount divisible by five cents,” the text of HB 281 states.

Dyoni Smith, a section manager at Rainbow Foods who was working at one of the registers on Monday, said there hasn’t been a noticeable shortage of pennies yet either at the store or for the cash purchases she still makes regularly.

“We have a few people who actually pay to the penny with cash,” she said. “And then we have some, like one guy who comes in and he’ll pay cash, and he’ll put the remainder in the donation jar. And then another guy who comes in and sometimes he’ll pay to the penny — sometimes he’ll get change out of the change jar. So there’s quite a few people who I see who use cash.”

President Donald Trump last February ordered the U.S. Treasury Department to stop minting new pennies — something long discussed by other policymakers since the coins cost more to make than they are worth. The U.S. Mint reported that a penny cost about 3.7 cents to make in fiscal 2024, up from 3.1 cents the previous year.

Among the factors to be considered in states implementing rounding laws are possible legal challenges, impacts to retailers and what happened when Canada stopped distributing its penny in 2012, according to a policy summary by the National Conference of State Legislatures. But generally the organization states such laws are worth supporting.

“While states may approach this issue differently due to their own unique circumstances, there is a growing consensus among retailers, economists, and other stakeholders, recognizing symmetrical rounding, (up or down) to the nearest nickel, as the fairest method to all parties when applying to cash transaction,” the policy summary notes.

• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.