The cost of rounding down at market
publication date: Mar 1, 2019
Rounding is a pricing strategy whereby smaller denominations are excluded from the grand total at checkout. That means pennies, nickels and dimes. The principal incentive for rounding at the farmers market is to expedite the checkout process.
Handling fewer denominations simplifies transactions and reduces the wait time for customers in line. Secondary incentives include uncomplicated cash drawer management, easy deposits and straightforward change requests from the bank. In addition, quickening checkout procedures helps to diffuse the stress associated with long, bustling lines of customers.
To determine whether rounding is the right decision for your business, you must consider the benefits and contrast them with the costs. Some of the benefits described are based on assumptions, others on objective truths. For example, the checkout process is simpler when you’re not handling pennies, nickels, and dimes. This is uncontestable. But you need a more compelling analysis if you are to understand the total relationship between the benefits and costs involved.
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