Swedish rounding is rounding the basic cost of a purchase which is to be paid for in cash to the nearest multiple of the smallest denomination of currency. The term "Swedish rounding" is used mostly in Australia, where such a method has been practised since the 1990s.
Rounding becomes necessary where low denomination coins in a currency are withdrawn or otherwise made unavailable, but the currency's subdivisions remain the same. Since it may not be possible to make exact change for a purchase, rounding the total bill to the lowest available denomination of coinage is required if a customer is paying in cash. If payment is being tendered using credit card, debit card, EFTPOS or cheque, no rounding is necessary.
The practice was introduced in Sweden following the removal of 1 and 2 öre coins from circulation in 1972. It is called "öresavrundning", meaning "öre rounding". A similar system was later adopted by the Reserve Bank of New Zealand in 1990, when the 1 and 2 cent coins were removed from circulation, and the Reserve Bank of Australia which did the same for its own currency in 1993. At this time, the phrase "Swedish rounding" came into use in both countries.
In countries with 0.01 coins, many shops avoid the need for the smallest coins by having all prices rounded to e.g. 0.05 or 0.10.
Rounding with 0.05 intervals
This was used in Sweden from 1972 to 1985, New Zealand from 1990 to 2006, and is used in Argentina (always rounded down), Australia, Bosnia and Herzegovina, Brazil, Canada, Finland, Hungary, Malaysia (though 1 sen coins are still legal tender), The Netherlands, Singapore, South Africa (from 1 April 2002 onwards, rounding is done to the nearest 5c), Switzerland, and Turkey (even though the 1 kuruş coin can still be used). In Chile, where 1 peso coins are legal but rare, prices are rounded to the nearest 5 pesos using the same system. In the Republic of Ireland, a National Payments Plan prepared by the Central Bank of Ireland approved by the Government in April 2013 plans "to trial the use of a rounding convention in a pilot project in a mid-size Irish town", with the 1¢ and 2¢ no longer being minted while remaining legal tender.
- Prices are rounded down to the nearest multiple of 5 cents for sales ending in: 1¢ & 2¢ to 0¢; and, 6¢ & 7¢ to 5¢;
- Prices are rounded up to the nearest multiple of 5 cents for sales ending in: 3¢ & 4¢ to 5¢; and, 8¢ & 9¢ to 10¢
- Values ending in 0¢ or 5¢ remain unchanged.
Rounding with 0.10 intervals
This is currently used in New Zealand, which eliminated its 5 cent coin in 2006. This is also the case in Hong Kong, which eliminated its 5 cent coin in 1989 and 1 cent note in 1995. In practice only utility bills, petrol stations and banks still keep the cent. All other businesses use only ten cent intervals.
- round down to the nearest 10 cent value for sales ending in 1¢, 2¢, 3¢, 4¢, 5¢;
- round up to the nearest 10 cent value for sales ending in 6¢, 7¢, 8¢, 9¢;
- In NZ, it is up to the business to decide if they will round 5¢ intervals up or down. The majority of retailers follow government advice and round it down.
In Sweden between 1985 and 1992, prices were rounded up for sales ending in 5 öre.
In the People's Republic of China, coins smaller than ¥0.10 are now rare though still valid. As a result, many shops simply truncate their bills down to the next ¥0.10 increment, giving the customer a discount of up to ¥0.09.
Rounding with 0.50 intervals
- Sales ending in 1–24 öre round down to 0 öre.
- Sales ending in 25–49 öre round up to 50 öre.
- Sales ending in 51–74 öre round down to 50 öre.
- Sales ending in 75–99 öre round up to the next whole Krone/krona.
In practice, the proportion of transactions rounded upwards is greater, due to psychological pricing of items ending in 90–99 öre. Rounding is only done on the total sum of a purchase, which makes that effect smaller. In many shops all prices are already rounded to the whole krone, so that no rounding takes place.
Rounding with 1.00 intervals
- Sales ending in 1–49 öre/øre round down to 0 öre/øre.
- Sales ending in 50–99 öre/øre round up to the next whole krona/krone.
- "Cessation of minting of 1 & 2 Cent Coins". South African Government Information. 2002-03-22. Retrieved 2008-08-14.
- "Written Answers 23960/13: Euro Coins Production". Dáil debates (Oireachtas). Unrevised: 57. 21 May 2013. Retrieved 26 May 2013.
- "Change for the Better: Questions and Answers". Reserve Bank of New Zealand. Retrieved 2009-01-28.
- "New rounding rules". Danmarks Nationalbank. Retrieved 2010-05-02.
- Such prices are for example visible in (click the image)
- "Regulation relating to withdrawal of 50-öre coins as legal tender". Norges Bank. Retrieved 2011-05-09.