••• The Netherlands has dispensed with using one and two cent coins.

Change suppliers in the Netherlands are increasingly discontinuing the supply of one and two cent coins to retailers. This development endangers the distinction of psychologically relevant and important purchase pricing (threshold prices). Without small denomination coinage, merchants are not always in a position to provide exact change for their customers at certain price levels. Therefore, merchants who wish to use small denomination coinage in the future must spend time and money importing it from other European countries.

act'o-soft has responded to this country specific challenge and offers an alternative. The cash register solution act'o-cash from act'o-soft has been expanded and now allows merchants in the Netherlands to completely do without small denomination coinage.

Background

The basic principle for the extraordinary abdication of coins in the Netherlands was established as a recommendation to Dutch merchants, which is subject to change, and which has come about in consultation with the most important consumer rights protection agency, banking associations and the Dutch Central Bank. It is left up to the retailers to round off their prices so that they can dispense with the use of small denomination coins.

In practice, however, rounding-off appears more difficult in the Netherlands. The one and two cent coins maintain their status as legal tender. In cases of cash payment a retailer may round off his prices so that no one or two-cent coins are needed as change. If a merchant decides to round off his prices, he must then round the entire value of a transactional purchase up or down in five cent increments. However in cases of debit card payment, retailers may not round prices and must collect to the cent.

To illustrate: Merchants may round up in the case of a cash payment and a transactional value of, for example, €12.87 to €12.90. However, in return, retailers who use this rule must also round down an amount of, for example, €12.84 to €12.80 in favour of the customer.

At the end of the day, this should be a zero-sum game because rounding-up and down should automatically offset each other so that neither the merchant nor the customer is disadvantaged.

Advantage

Rounding the transactional value in cases of cash payment alleviates the need for merchants to stock one and two cent coins in their stores. Many possibilities for cost savings immediately result from this for merchants who use rounding:

• The need for the costly acquisition of small denomination coinage is eliminated.
• The payment process and, in particular, the cash register count at the start and end of the day are accelerated, because the number of coins to be counted is reduced.
• Moreover, it is comforting for retailers to know that the Dutch are used to this kind of rounding from the guilder era. Results from a test phase have even revealed that customer satisfaction will rise via rounding and the abandonment of small denomination coinage connected to this.

The cash register software act'o-cash from act'o-soft supports this country specific feature in the Netherlands just as naturally as many others in other European countries.

written on Thu. 07.01.2010