Ever since the U.S. government stopped producing pennies last year, convenience store owner Hammad Warraich has struggled to make change.
He was even threatened with a lawsuit from a customer who bought a 99-cent item at his Milwaukie store, River Road Mart, when he couldn’t make the proper change.
“I’m like, ‘Bro, I don’t have pennies. It’s really hard to get them,’” he recalled.
Now, retailers like Warraich are getting behind a bill in the Oregon Legislature this session that would allow stores to round the cost of items up or down to the nearest nickel.
If a price ends in 1 or 2 cents, or in 6 or 7 cents, then the price has to be rounded down to the nearest nickel. If it ends in 3, 4, 8 or 9, then it needs to be rounded up.
Stores that choose to enact the proposed bill would have to display a sign about it.
House Bill 4178 passed the House on Friday and now heads to the Senate.
Who is behind the Oregon Penny Bill?
The Northwest Grocery Retail Association is championing the bill. It hopes Oregon House Bill 4178 will bring fairness to the marketplace.
“The bill says if you are going to do a rounding policy, this is what the rounding policy should look like,” said Amanda Dalton, the association’s president.
The legislation is similar to rounding policies adopted by other countries that have ended the use of pennies, like Canada, Australia and New Zealand.
Oregon Rep. Kim Wallen, a Republican from Medford, explained that stores will have to put up a sign if they adopt the new rounding policy.
“It tells their customers, ‘If you pay in cash, we will be rounding, so that we can give you exact change,’” Wallen said.
The bill aims to make the rounding process financially neutral, so that sometimes customers benefit and sometimes retailers benefit. Over time, neither party comes out on top.
Some large corporations have preempted the bill and are already posting signs explaining rounding activity.
Oregon’s proposed bill only applies to cash payments, not electronic payments, but Oregon law requires both types of transactions be treated the same. So, Dalton says, the bill is needed in Oregon so businesses don’t get sued for cheating their customers when they round up.
“Pennies add up quickly,” Dalton said. “We do think that there are real liability concerns.”
On the other hand, retail industry groups say businesses have lost millions by rounding down for customers.
Where did the penny shortage come from?
The penny shortage started last year when President Donald Trump ordered the U.S. Mint to stop production. It costs more than three cents to make a one-cent coin.
Greg Astley, with the Oregon Restaurant and Lodging Association, says business owners are now seeing real shortages.
“They used to get 10, 12, 15 rolls of pennies. Now they’re only able to get two or three to make change,” Astley said. “It has become very difficult.”
Despite the problem, Warraich agrees with Trump that pennies need to be phased out.
“People just don’t use pennies anymore.”
What are consumers seeing?
Back at the River Road Mart in Milwaukie, Jennifer Miller is buying a Monster Drink.
She’s noticed increased problems making change. When possible, she uses the dish by the cash till, where people leave a penny or take a penny. But she thinks new prices are going up rather than down.
“I do notice that they’re rounding them up,” she said. “Like you go to get gas and it’s $5.99 okay. So, I’m pretty sure they are going to round up.”
Related: National penny shortage has one Washington local government seeking federal fix
Isn’t this a federal problem?
The penny problem is not exclusive to Oregon. Most experts agree it ought to be fixed on the federal level. But the Common Sense Act has stalled in Congress. The lack of federal guidance has resulted in a patchwork of responses from businesses, local governments and now states.
At least 23 states, including Oregon, Washington and Idaho, are working on solutions.
“We are hoping that by states stepping up, it will force the federal government to step up their efforts,” said Greg Astley.
If passed, the federal Common Sense Act would supersede all state acts.
