Inflation has eroded the value of the penny (a single cent) to the point where many propose eliminating it in America altogether. Roshini Nair reported on a study that looked at the implications:

• In 2013 Canada decided to phase out the penny for cash transactions – retailers would round to the nearest five cents.
• Debit and credit card transactions were unaffected by this move.
• Retailers tend to price things at 99 cent intervals (e.g., $9.99) – rounding to the nearest five cents has the potential to boost their revenues.
• One study estimated that the average grocery store earned an extra $157 a year as a reslt of the change.
• Scale that across Canada and you get $3.3 million a year.
• Since the poor are more likely to pay with cash than the rich, the change hurts them proportionately more.

Read the article here.

Via: Marginal Revolution