LogFAQs > #977281119

BoomerKuwanger posted...

I did some math based on some figures I googled and Walmart would get an extra ~$170 million a year if they gained just a penny from each transaction being rounded up in the US. That number is already so unfathomable to me I thought fuck that, then I googled some more and apparently they get 600 billion in revenue a year, so that really is pocket change to them. Good lord.

This shit should be round down for that reason though, I know it isn't going to affect my wallet much, but these corporations don't need anything more

Remember that every transaction being rounded up by a penny isn't overly realistic. For starters, that requires every transaction to be in cash, and while there are a few holdouts who insist on using cash as often as possible who will bear close to the maximum brunt of whatever personal loss rounding can create, cash transactions are always going to be a minority on the broader scale. Beyond that, with normal rounding, the difference is going to range from -2 to +2 cents, with a small bias toward retailers making more because of the prevalence of $X.99 prices (I don't have any concrete data for this, but intuitively, I believe it's more common to see people buy 1-2 things at a time than to buy 3-4 without it being a larger trip. I could be mistaken and I welcome correction), and that means it'll mostly even out. For those that care enough to min/max it, there's also the option of paying cash for cases where it rounds down and using credit/debit for cases where it would round up since the consumer has the power to make that decision. All of this adds up to substantially reduce the retailer's gain below the hypothetical maximum.

That said, I do like the round down approach. Not only does it always work in the consumer's favour (indirectly benefiting customer service staff that consequently don't have to deal with Karens that don't understand how rounding works freaking out over a nickel), businesses generally won't even feel the loss because it's absorbed by the benefits of cash transactions. Not having to pay the 3-4% credit cards often charge is a much bigger deal than losing 2 cents per transaction, so making cash purchases more attractive by giving them an inherent "discount" works out in their favour (to the point that many businesses already give discounts for using cash). Bonus points where it's mostly smaller businesses that benefit from that where the Walmarts of the world have been able to negotiate lower credit card fees with their larger market shares.