The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A Bahamian retailer yesterday said adjusting computer and point of sale (POS) systems to the one cent coin's retirement at year-end 2020 was “not as easy” at it appears.

Margo Farrington, chief marketing officer at Lorene’s, told Tribune Business the company was having difficulties adjusting pricing mechanisms for the "rounding to the nearest five cent increment" that will be required once the Bahamian one cent coin's use as legal tender ends.

She argued that the one cent coin should have been eliminated from use in all forms of payment, including debit and credit card, and other electronic transactions, rather than just cash sales as this would make it simpler for merchants to adjust.

Ms Farrington said: “We're trying to figure out how we're going to work it in our system. It's not going to be that easy for us because of how our system is, and especially because they want to only do it on cash sales. So that's going to create a problem for us with returns and all sorts of things. But we're hoping that they will just do it on everything and it'll make life much simpler.”

With the one cent coin's elimination, the Central Bank is warning retailers, restaurants and other merchants that they must round transaction totals to the nearest five-cent increment based on its guidelines.

Explaining that this only applies to cash sales, and not electronic payments, the Central Bank said totals ending in the digits 'one' or 'two' be rounded down to zero. Those totals ending in 'three' or 'four', or 'five' and 'six', are to be rounded up and down, respectively, to the nearest 'five' digit. And sales ending in 'eight' or 'nine' are to be rounded up to zero.

James Sands, Lorene’s chief financial officer, said: “Our software people in the US are trying to figure it out, because you're asking the computer to round things only.

"Let's say you have one loaf of bread, and it's $4.31. So they want you to round that down to $4.30, and then if you want to get two loaves of bread, and that becomes $8.62, you have to round them both down.

"But if you get three, then it's supposed to go [round] up to $12.65. It doesn't round on every item; it only rounds on however many items you are going to purchase in the end, and that is where those pennies come into play.”

Arguing that this can become very complicated for computer systems to calculate on every sale, Mr Sands said: “Then they only want you to round it if it becomes a cash sale, as opposed to a credit card or a cheque, so you're asking the computer to do the whole calculation until the end, and then you have to determine what type of sale it's going to be and then determine if it's going to round up or round down.”

Mr Sands added that it would be easier for the computer to round off on a particular item rather than at the end-sale. He also warned against the removal of the one cent as being difficult for setting sales and discounts.

He added: “You also have to account for when you have a discount. Every discount doesn't fall to a flat price. It could be one cent, two cents, three cents, five cents, six cents or seven cents.”

“When you're doing a discount, you have to tell the computer again, when it is going to decide to do the rounding, when you're doing a discount. What if there are multiple different prices? It’s not easy to program a computer to make those calculations on multiple sales a day."

Dwayne Higgs, chief executive officer of WHIM Automotive, said: “We started rounding up or down on July 1, so we are already used to the process. The computer handles everything so it has been simple for us.”

He added that the auto parts supplier did not want to deal with implementing this change at Christmas time, so it went ahead and adjusted its prices ahead of the holiday season.

"Some days we round up more, and others we round down, so it has not been significant," Mr Higgs said. "This is just for cash sales and does not affect electronic transactions. For card sales, charge sales and online sales it does not round up or down.”

Bradley Rolle, assistant general manager of Centreville Food Market, said: “I don't see any real damage other than we're just getting used to not working with the penny. So what we would have been doing over the last month now was rounding off, or rounding up or rounding down, all of our prices to the nearest five cents or ten cents.”

He added that the only likely problem is VAT at 12 percent forces some goods on the shelves to be priced at the one cent margin, and the Government may need to round that off to either 15 percent or 10 percent to accommodate the change in pricing.