|Soon to be a thing of the past?|
For the National Bank of Poland, producing zł.0.01 and zł.0.02 (one- and two-groszy) coins far exceeds their nominal value. The NBP is therefore exploring ways to at least reduce, if not completely eliminate, the coins from circulation.
Withdrawing the coins from the market altogether would be easiest solution, but would also be strongly opposed by retailers, who prefer to use prices ending in “.99” as a marketing tool. Customers would also likely oppose the measure, expecting prices for such products to rise.
Instead, the NBP is proposing that the prices be rounded up or down on cash payments only. “Our main goal is to make the cash transactions easier and more efficient. Our proposal would round the final cash payment to zł.0.05,” said the NBP’s Aleksander Proksa, who wrote the proposal.
The NBP hopes its idea will satisfy both retailers and consumers, while saving zł.40 million in coin-production costs. According to the proposal, prices would remain intact, but the total payment would be rounded up or down. For example, instead of paying zł.10.97, a customer would pay just zł.10.95 in cash. Payments made with credit cards, debit cards or by bank transfer would remain the same.
“There are currently 7 billion one- and two-groszy coins on the market, out of a total of 13 billion coins. These low denomination coins often go unused, and they rest in people’s drawers. Nearly a third of Poles admit this,” said Barbara Jaroszek, deputy director of the NBP’s cash & issue department.
The NBP claims that the move would not affect inflation. “According to our analysis, rounding the payments would have neutral effect on CPI. The individual customer would probably spend several dozen groszy more per year at most,”added Marcin Kaszuba, director of the public relations and marketing department at the NBP.
The retailers understand the problem, but they have some concerns of their own. “There is the cost of rounding the payments, and there will be costs involved, whether you’ll round the payments up or down, and these will be paid by the market. And that includes both customers and retailers. We don’t like being the only ones that would have to pay for it,” Mr Maria Andrzej Faliński, president of the Polish Trade and Distribution Organization (POHiD) told WBJ.
“There will be many instances in which the same product will have a different cost in the same place,” added Mr Faliński. “For example, when I buy something and pay cash for it, I could pay a different amount than if I were paying for it with a credit card. Also, something bought individually could have a different price than the same thing bought in bulk,” he said. He suggested that this could pose problems in accounting and taxation, and that he would like to see some regulations in tax law that would prevent potential disputes with the Tax Office.
Similar regulations have been implemented in other countries, where the production of low-denomination coins had become unprofitable. For example, in the Czech Republic all coins with a denomination lower than 1 Czech koruna were withdrawn from the market, but prices in stores still end in “.99”
“We can suspect that Polish stores would keep the ‘.99’ prices intact, for marketing reasons, or even lower them to ‘.95.’ ” Mr Kaszuba said.
The proposal was sent to the Ministry of Finance, where it will be reviewed. If passed by parliament, it would come into force from January 1, 2015.
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