Thursday, April 25, 2024

$1 million savings


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THE CENTRAL BANK OF Barbados will save $1 million by taking cents out of circulation.
Stating that cents had not been profitable for the institution and that the production and handling costs continued to rise, advisor to the Central Bank Governor Celeste Wood said yesterday that effective May 7 one cent coins would no longer be issued.
While the cent will remain legal tender and is acceptable for transactions, the bank expects the cent to be gradually phased out in five years.
Wood explained that retailers will continue to take the cents, but will not be giving out change in that denomination. The same obtains for financial institutions.
She said the phasing out of the cent should not affect the cost of items.
“Prices are not to be adjusted because of unavailable cents. That is a very important message we want you to take forward. If they’re increased, [it is] not as a result of the shortage of one cent,” Wood said.
While consumers will continue to pay the calculated price for items if credit and debit cards are used, a rounding system will be introduced for cash transactions. If the total ends in one, two, six or seven it will be rounded down to nearest factor of five. Totals ending in three, four, eight or nine will be rounded up to the nearest factor of five.
“Individual prices should not be rounded. Wherever you go, the price should still be saying the same. If they go up, they should be for another reason but not because of our one cent. Only the final total is to be rounded. . . . The customer and the retailer will gain a maximum of two cents or lose a maximum of two cents. Non-cash transactions are not to be rounded and we’re going to be stressing this,” Wood explained.
Wood could not give an exact figure on exactly how many cents are currently in circulation, but she said more than $500 million worth had been issued over the years. She said more than $5 million had come in through the cent drive, which was launched in 2012.
The bank will be launching several programmes to sensitise both consumers and businesses to the phasing out and the rounding process.
There was mixed reaction from store owners and the man in the street to the news that the one cent is to be phased out.
Manager of the popular Ouch Boutique on Roebuck Street, Wilma Edwards, said they would not be adversely affected by the move.
“We don’t really use cents. Our prices are usually rounded off. That [move] will affect places like supermarkets and hair stores,” she said.
One shopper at Popular supermarket was happy to hear cents will soon be no more.
“Nobody uses them; they throw them in the street. I use them when I’m shopping. They’re not worth much so that will be a good thing. The only problem is if you are short of a few cents,” the middle-aged lady said.
Another lady was curious about the rounding system and whether shoppers will be disadvantaged.
“Every cent counts and I use them when I’m doing my shopping,” she said.

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