Canadian Convenience Stores Brace for Penny Expiration

The Canadian one-cent coin is set to expire on Feb. 4, but the Atlantic Convenience Stores Association expects confusion for both retailers and consumers.

January 22, 2013

OTTAWA - The Canadian penny has only a few days left in its long reign as the country??s lowest denominator coin. The one-cent coin was first struck in 1858, but due to rising labor, metal and other manufacturing and distribution costs, each penny now costs more than 1.6 cents to produce.

The Royal Canadian Mint will stop distribution of pennies to banks and other financial firms on February 4, The Telegram reports. After that, businesses don??t have to accept the penny as payment, according to the Canadian Department of Finance.

Retailers are expected to round the final amount or change owed in a "fair, consistent and transparent manner," but there are no formal rules in place as to what that means. "It will be a mess," said Mike Hammoud, president of the Atlantic Convenience Stores Association.

"Experience in other countries that have phased out low-denomination coins, such as Australia and New Zealand, has shown that fair rounding practices have been respected," according to the finance department??s FAQs.

The convenience store association would rather have the government issue specific guidelines instead of allowing the retailer to figure it out. Hammoud sees the first month of transition to be chaotic, especially since the government didn??t talk with businesses or provide enough help to consumers and retailers prior to the change.

"It's just amusing the onus always falls on the retailer," said Hammoud. "(Government) go and implement it and it is up to us to decide how it gets done. Everybody has to follow it and make it work."

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