Swedish rounding
Encyclopedia
Rounding
Rounding a numerical value means replacing it by another value that is approximately equal but has a shorter, simpler, or more explicit representation; for example, replacing $23.4476 with $23.45, or the fraction 312/937 with 1/3, or the expression √2 with 1.414.Rounding is often done on purpose to...
the basic cost of a purchase which is to be paid for in cash
Cash
In common language cash refers to money in the physical form of currency, such as banknotes and coins.In bookkeeping and finance, cash refers to current assets comprising currency or currency equivalents that can be accessed immediately or near-immediately...
to the nearest multiple of the smallest denomination
Denomination (currency)
Denomination is a proper description of a currency amount, usually for coins or banknotes. Denominations may also be used with other means of payment like gift cards. See also Redenomination.-Subunit and super unit:...
of currency
Currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...
. The term "Swedish rounding" is used mostly in Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
, where such a method has been practised since the 1990s.
Details
Rounding becomes necessary where low denomination coinCoin
A coin is a piece of hard material that is standardized in weight, is produced in large quantities in order to facilitate trade, and primarily can be used as a legal tender token for commerce in the designated country, region, or territory....
s in a currency
Currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...
are withdrawn or otherwise made unavailable, but the currency's subdivisions remain the same. Since it may not be possible to make exact change for a purchase, rounding the total bill to the lowest available denomination of coinage is required if a customer is paying in cash
Cash
In common language cash refers to money in the physical form of currency, such as banknotes and coins.In bookkeeping and finance, cash refers to current assets comprising currency or currency equivalents that can be accessed immediately or near-immediately...
. If payment is being tendered using credit card
Credit card
A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services...
, debit card
Debit card
A debit card is a plastic card that provides the cardholder electronic access to his or her bank account/s at a financial institution...
, EFTPOS
EFTPOS
EFTPOS is the general term used for debit card based systems used for processing transactions through terminals at points of sale. In Australia and New Zealand it is also the brand name of the specific system used for such payments...
or cheque
Cheque
A cheque is a document/instrument See the negotiable cow—itself a fictional story—for discussions of cheques written on unusual surfaces. that orders a payment of money from a bank account...
, no rounding is necessary.
The practice was introduced in Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
following the removal of 1 and 2 öre
Öre
Öre is the discontinued centesimal subdivision of the Swedish krona. The plural and singular are the same in the indefinite forms, whereas the singular definite form is öret and the plural definite is örena. The name derives from the Latin aureus , the name of a coin worth 25 denarii...
coins from circulation in 1972. It is called "öresavrundning", meaning "öre
Öre
Öre is the discontinued centesimal subdivision of the Swedish krona. The plural and singular are the same in the indefinite forms, whereas the singular definite form is öret and the plural definite is örena. The name derives from the Latin aureus , the name of a coin worth 25 denarii...
rounding". A similar system was later adopted by the Reserve Bank of New Zealand
Reserve Bank of New Zealand
The Reserve Bank of New Zealand is the central bank of New Zealand and is constituted under the Reserve Bank of New Zealand Act 1989. The Governor of the Reserve Bank is responsible for New Zealand's currency and operating monetary policy. The Bank's current Governor is Dr. Alan Bollard...
in 1990, when the 1 and 2 cent coins were removed from circulation, and the Reserve Bank of Australia
Reserve Bank of Australia
The Reserve Bank of Australia came into being on 14 January 1960 as Australia's central bank and banknote issuing authority, when the Reserve Bank Act 1959 removed the central banking functions from the Commonwealth Bank to it....
which did the same for its own currency in 1993. At this time, the phrase "Swedish rounding" came into use in both countries.
Rounding with 5c intervals
This was used in Sweden from 1972 to 1985, New ZealandNew Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
from 1990 to 2006, and is used in Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...
(always rounded down), Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
, Bosnia and Herzegovina
Bosnia and Herzegovina
Bosnia and Herzegovina , sometimes called Bosnia-Herzegovina or simply Bosnia, is a country in Southern Europe, on the Balkan Peninsula. Bordered by Croatia to the north, west and south, Serbia to the east, and Montenegro to the southeast, Bosnia and Herzegovina is almost landlocked, except for the...
, Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
, Finland
Finland
Finland , officially the Republic of Finland, is a Nordic country situated in the Fennoscandian region of Northern Europe. It is bordered by Sweden in the west, Norway in the north and Russia in the east, while Estonia lies to its south across the Gulf of Finland.Around 5.4 million people reside...
, Hungary
Hungary
Hungary , officially the Republic of Hungary , is a landlocked country in Central Europe. It is situated in the Carpathian Basin and is bordered by Slovakia to the north, Ukraine and Romania to the east, Serbia and Croatia to the south, Slovenia to the southwest and Austria to the west. The...
, Malaysia (though 1 sen coins are still legal tender), The Netherlands, Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
, Switzerland
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
, and sometimes Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
(almost always rounded down) and Turkey
Turkey
Turkey , known officially as the Republic of Turkey , is a Eurasian country located in Western Asia and in East Thrace in Southeastern Europe...
(even though the 1 kuruş coin can still be used). In Chile, where 1 peso coins are legal but rare, prices are rounded to the nearest 5 pesos using the same system.
- Prices are rounded down to the nearest multiple of 5 cents for sales ending in 1c, 2c, 6c, 7c;
- Prices are rounded up to the nearest multiple of 5 cents for sales ending in 3c, 4c, 8c, 9c;
- Values ending in 0c or 5c remain unchanged.
Rounding with 10c intervals
- round down to the nearest 10 cent value for sales ending in 1c, 2c, 3c, 4c;
- round up to the nearest 10 cent value for sales ending in 6c, 7c, 8c, 9c;
- It is up to the business to decide if they will round 5c intervals up or down. The majority of retailers follow government advice and round it down.
In the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
, coins smaller than ¥
Chinese yuan
The yuan is the base unit of a number of modern Chinese currencies. The yuan is the primary unit of account of the Renminbi.A yuán is also known colloquially as a kuài . One yuán is divided into 10 jiǎo or colloquially máo...
0.10 are now rare though still valid. As a result, many shops simply truncate their bills down to the next ¥0.10 increment, giving the customer a discount of up to ¥0.09.
In Sweden between 1985 and 1992, prices were rounded up for sales ending in 5 öre.
Rounding with 25 øre intervals
The following system was used in DenmarkDenmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...
until the 25 øre was demonetised on 1 October 2008:
- Sales ending in 1-12 øreØreØre is the centesimal subdivision of the Norwegian and Danish krones. The Faroese division is called the oyra, but is equal in value to the Danish coin. Before their discontinuation, the corresponding divisions of the Swedish krona and the Icelandic króna were the öre and the eyrir...
round down to 0 øre. - Sales ending in 13-24 øre round up to 25 øre.
- Sales ending in 26-37 øre round down to 25 øre.
- Sales ending in 38-49 øre round up to 50 øre.
- Sales ending in 51-62 øre round down to 50 øre.
- Sales ending in 63-74 øre round up to 75 øre.
- Sales ending in 76-87 øre round down to 75 øre.
- Sales ending in 88-99 øre round up to the next whole Danish kroneDanish kroneThe krone is the official currency of the Kingdom of Denmark consisting of Denmark, the Faroe Islands and Greenland. It is subdivided into 100 øre...
.
Rounding with 50 øre intervals
The system used in NorwayNorway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
since 1993 and in Denmark since 1 October 2008 is the following:
- Sales ending in 1-24 øreØreØre is the centesimal subdivision of the Norwegian and Danish krones. The Faroese division is called the oyra, but is equal in value to the Danish coin. Before their discontinuation, the corresponding divisions of the Swedish krona and the Icelandic króna were the öre and the eyrir...
round down to 0 øre. - Sales ending in 25-49 øre round up to 50 øre.
- Sales ending in 51-74 øre round down to 50 øre.
- Sales ending in 75-99 øre round up to the next whole KroneKrone-General:* Crown * ADC KRONE, formerly The KRONE Group, a German telecommunications company acquired by ADC Telecommunications* KRONE LSA-PLUS, a popular telecommunications connector* Krone an der Brahe, the German name for Koronowo, Poland...
.
In practice, the proportion of transactions rounded upwards is greater, due to psychological pricing
Psychological pricing
Psychological pricing or price ending is a marketing practice based on the theory that certain prices have a psychological impact. The retail prices are often expressed as "odd prices": a little less than a round number, e.g. $19.99 or £2.98. The theory is this drives demand greater than would be...
of items ending in 90-99 øre. Rounding is only done on the total sum of a purchase, which makes that effect smaller. In many shops all prices are already rounded to the whole krone, so that no rounding takes place.
Rounding with 1 krona intervals
The system used in SwedenSweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
since 30 September 2010 and to be used in Norway
Norway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
from May 1 2012.
- Sales ending in 1-49 öreÖreÖre is the discontinued centesimal subdivision of the Swedish krona. The plural and singular are the same in the indefinite forms, whereas the singular definite form is öret and the plural definite is örena. The name derives from the Latin aureus , the name of a coin worth 25 denarii...
/øreØreØre is the centesimal subdivision of the Norwegian and Danish krones. The Faroese division is called the oyra, but is equal in value to the Danish coin. Before their discontinuation, the corresponding divisions of the Swedish krona and the Icelandic króna were the öre and the eyrir...
round down to 0 öre/øre. - Sales ending in 50-99 öre/øre round up to the next whole kronaSwedish kronaThe krona has been the currency of Sweden since 1873. Both the ISO code "SEK" and currency sign "kr" are in common use; the former precedes or follows the value, the latter usually follows it, but especially in the past, it sometimes preceded the value...
/kroneNorwegian kroneThe krone is the currency of Norway and its dependent territories. The plural form is kroner . It is subdivided into 100 øre. The ISO 4217 code is NOK, although the common local abbreviation is kr. The name translates into English as "crown"...
.
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(from 1 April 2002 onwards), rounding is done to the nearest 5c - Swedish kronaSwedish kronaThe krona has been the currency of Sweden since 1873. Both the ISO code "SEK" and currency sign "kr" are in common use; the former precedes or follows the value, the latter usually follows it, but especially in the past, it sometimes preceded the value...
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Rounding related social issues
- Efforts to eliminate the penny in the United States
- Take a penny, leave a pennyTake a penny, leave a pennyTake a penny, leave a penny refers to a type of tray, dish or cup often found in gas stations, convenience stores, and other small stores in North America, meant for convenience in cash transactions...