Central Bank finds strong support to get rid of one and two cent coins

Friday 14 March 2014 18.01
85% of consumers and 100% of retailers surveyed in Wexford believe rounding should be applied nationally
85% of consumers and 100% of retailers surveyed in Wexford believe rounding should be applied nationally

A new survey from the Central Bank has found strong support from retailers and consumers to get rid of one and two cents coins.

The survey follows a pilot programme in Wexford where prices in shops were rounded to the nearest five cent at the cash register.

85% of consumers and 100% of retailers surveyed believe rounding should be applied nationally.  

The Central Bank said its National Payments Plan's steering committee has now recommended to the Finance Minister that symmetrical rounding is rolled out nationally and that it is run on a voluntary basis for both consumers and retailers.

The Central Bank mints many more of these small denomination coins that other coins, but they go out of circulation quickly because of stockpiling - in people's jam jars - and shops constantly need more supplies for change. 

The bank said the direct average cost of producing these coins exceeds their face value - a one cent coin costs about 1.3 cent to mint - and there are significant other economic costs associated with the transport and storage of these coins in the economy.

The matter will be decided by the Minister for Finance and in the event of a rounding up decision nationwide, the one and two cent coins would keep their status as legal tender.

The trail in Wexford was run from September 16 to November 17 and was conducted after market research showed that both consumers and retailers do not like the coins.

Five European member states have already adopted a rounding policy - the Netherlands, Sweden, Finland, Denmark and Hungary. Belgium is also currently in the process of adopting it. 

One of the concerns consumers had before the trial was that retailers would round up the price of goods, but a mystery shopping exercise showed that rounding had no inflationary effect.

"We expected that the trial wouldn't result in price rises. Rounding only applies to total bills, not to the prices of individual goods. Quite simply, the price of almost all goods tracked over the nine weeks of the trial remained unchanged," commented Ronnie O'Toole, the National Payments Plan's programme manager.