Trial run could signal end of 1c and 2c coins

People could find they have fewer coins to rub together after the Central Bank found there was strong support for getting rid of one and two cent coins.

In a recent trial run by the National Payments Plan in Wexford cash transactions were rounded off to the nearest 5c at the cash register, removing the need for 1c and 2c coins in change. All of the retailers in the town and 85% of consumers believe rounding should be applied nationally.

The trial that ran from September 16 to November 17 last year followed market research that found consumers and retailers disliked the coins.

NPP programme manager, Ronnie O’Toole, said five EU member states had already adopted a symmetrical rounding policy — the Netherlands, Sweden, Finland, Denmark and Hungary.

Belgium is currently in the process of removing the need for the coins.

Mr O’Toole said one of the concerns consumers had before the trial was that retailers would round up the price of goods, but a mystery shopping exercise found that rounding had no inflationary effect.

“We expected that the trial wouldn’t result in price rises. Rounding only applies to total bills, not to the prices of individual goods,” he said.

The Central Bank mints many more of the small denomination coins than other coins and they cost more to mint than their face value — a 1c coin costs about 1.3c to mint.

The coins also go out of circulation quickly because of stockpiling.

NPP chairman, Tony Grimes, said its steering committee had recommended the national rolling out of symmetrical rounding to the minister for finance and that it be run on a voluntary basis for consumers and retailers.

A national roll-out would require a widespread communications and education plan, with retailers given adequate time to prepare.

In the event of a national roll-out the 1c and 2c coins would remain legal tender.