Tuesday, 2 November 2010

Rounding to the nearest penny

Just seen this (linked from Marginal Revolution). A doughnut shop in the US is getting rid of pennies - and intends to round their customers' orders to the nearest penny (rather than taking the, presumably more popular route, of always rounding up). The bizarre part about this story is... why on Earth wouldn't they just change their prices so that they were all integer multiples of $0.05 in the first place?


Matthew said...

An obvious answer is US sales tax: this is a given percentage (which varies according to which state you're in) of the advertised price of an item. Presumably Dunkin have the same untaxed prices nationwide, and don't want to change this, so their taxed prices can't be made divisible by 5c.

Steven E. Landsburg said...

This reminds me of the days when those little penny jars near the cash register were a brand new idea that everyone was talking about. They all had signs like "Need a penny? Take one. Got a penny? Leave one."

One day I went into a restaurant that had a sign saying "Need a penny? Take one. Need two? Get a job."