[OT] Retail rounding cents up or down ???

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MrAl
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[OT] Retail rounding cents up or down ???

Post by MrAl » Sat Aug 09, 2008 6:14 am

Hi there,


This is a little off topic here so if anyone objects i'll remove this post,
but i really would like to get some info on this so any replies would
be appreciated.

There is this liquor store near me where i go sometimes to pick up
a 12 pack (or so) of beer. A month or more ago i went in and bought
a 12 pack of beer of a given brand and also a single can of another
brand beer i happen to like. The total came up to $12.28 including tax.
A few weeks later, i went in and bought the EXACT same two items,
and the total came up to $12.29 including tax, which is one penny
more than the last time. I checked the calculation based on the
actual price and NJ sales tax of 7 percent and sure enough, they
changed from rounding down to rounding up, but strangely enough
they are rounding up any amount that is not zero. In other words,
they would round up 10.154 (after tax) to 10.16 instead of the
more mathematically correct 10.15, and a month or so ago they
would have rounded that down to 10.15 rather than 10.16 .
I called them and they said they recently had the system reprogrammed
because it was rounding down.
The mathematically more correct way to do it is to round down
for anything less than 1/2 of a penny, and round up for anything that
is equal to or more than 1/2 penny, so for example
10.154 rounds down to 10.15, but 10.155 rounds up to 10.16 .

I have to wonder if it is legal to round money up *ALL* the time, no matter
what the fractional pennies comes out to be.

Any ideas?

TIA.

PS
This isnt TOTALLY off topic because sometimes i'll have a beer while
working on an electronic project <big chuckle>.
LEDs vs Bulbs, LEDs are winning.

dyarker
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Post by dyarker » Sat Aug 09, 2008 7:19 am

Which "they" did you call, and which "they" is getting the fractions of a cent?

Since the fraction of a cent is caused by the tax calculation, the store shouldn't be keeping it (illegal I would think). If the fraction goes to the State tax bin, they should be following state rules, not making up their own.

BTW - Have you ever seen the movie Superman III?

Cheers,
Dale Y

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reloadron
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Post by reloadron » Sat Aug 09, 2008 2:58 pm

This is how it works in Ohio:
A change in Ohio law will allow for a simpler method for calculating the sales tax on transactions. The
change will be effective January 1, 2006. You will need to make changes to pointofsale
equipment at
that time. A vendor shall compute the tax on each sale by multiplying the price of the item(s) by the
aggregate rate of tax that applies. The computation shall be carried out to three decimal places. If the
result in the third decimal place is 4 or less, round down to the nearest cent. If the result in the third
place is 5 or greater, round up. For example, the tax on a sale in the amount of $13.49 at a rate of
6.75% (.0675) computes to $0.911. Using the new rounding rule, the tax is $0.91. The tax on a sale in
the amount of $43.99 at a rate of 6.25% (.0625) computes to $2.749. Using the new rounding rule, the
tax is $2.75.
Sales tax rate schedules are available for downloading from our website. Old rate schedules should be
destroyed after December 31, 2005.
Actually now here in Cuyahoga County Ohio (Cleveland area) the tax rate is 8.75% but the same law applies as to calculating the sales tax.

@ dyarker, yeah, Superman III all those fractional cents add up! :smile:

Ron

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How it works in WA

Post by PaulVMorrell » Sat Aug 09, 2008 3:19 pm

This seems like a silly thing for the state to be doing. I would assume that the retailer does not send in the amount from each sale. Here is Washington when filing the sales tax return, one only puts in the total sales. At that point the sales tax is calculated on the whole amount. This takes care of the round up/down problem for each sale. I do agree that the rounding should be done on a usual mathematical method for each sale so the customer is not confused, but isn't that what government is for?

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dacflyer
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Post by dacflyer » Sat Aug 09, 2008 4:54 pm

did you know that 4 out of 3 people have troubles with fractions :)

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MrAl
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Post by MrAl » Sat Aug 09, 2008 10:21 pm

dyarker wrote:Which "they" did you call, and which "they" is getting the fractions of a cent?

Since the fraction of a cent is caused by the tax calculation, the store shouldn't be keeping it (illegal I would think). If the fraction goes to the State tax bin, they should be following state rules, not making up their own.

BTW - Have you ever seen the movie Superman III?

Cheers,
Hello,

I called the store where the purchases were made. I would bet that
what they are doing now is illegal.

Did you mean Superman 3, or Superman 2.994 ? (heh heh)
LEDs vs Bulbs, LEDs are winning.

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MrAl
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Re: How it works in WA

Post by MrAl » Sat Aug 09, 2008 10:23 pm

PaulVMorrell wrote:This seems like a silly thing for the state to be doing. I would assume that the retailer does not send in the amount from each sale. Here is Washington when filing the sales tax return, one only puts in the total sales. At that point the sales tax is calculated on the whole amount. This takes care of the round up/down problem for each sale. I do agree that the rounding should be done on a usual mathematical method for each sale so the customer is not confused, but isn't that what government is for?
Hi Paul,

I would bet that here it's the same as in Ohio.
And yeah, that seems to be all that gov is good for these days :smile:
LEDs vs Bulbs, LEDs are winning.

dyarker
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Post by dyarker » Sun Aug 10, 2008 3:58 am

Correct round up would be 2.995 thru 2.999. 2.994 rounds to 2.99, and I didn't see that movie HEE HEE :grin:
Dale Y

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jollyrgr
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Post by jollyrgr » Thu Aug 14, 2008 2:55 pm

Every buy anything at 3 for a dollar? These scan in at 33 cents for the first two. When the third is detected it goes to 34 cents.
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MrAl
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Post by MrAl » Thu Aug 14, 2008 9:15 pm

dyarker:
Yes, that's right. I think i saw that movie but it was a long
time ago :smile:

jolly:
Yes, and sometimes maybe 34 cents each and when the third is
detected 32 cents. This is a little different though than
the calculation of sales tax.
LEDs vs Bulbs, LEDs are winning.

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Lenp
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Post by Lenp » Fri Aug 15, 2008 7:58 am

As an aside..

When I was stationed in the UK a life time ago, the US penny was not allowed to be used. They were collected and redeemed in silver upon arrival because they were the same size as a UK coin, the sixpence I believe, and worked in the cigarette vending machines. All the US sales on base were rounded to the nickel, using the total amount of the sale. I don't remember if they rounded, up or down, if it was 3 cents.

Len

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Bob Scott
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Post by Bob Scott » Fri Aug 15, 2008 1:52 pm

Lenp wrote:As an aside..
I don't remember if they rounded, up or down, if it was 3 cents.
Len
Then there's Radio Shack... just round up the cents to .99 and add a buck.

Do US gas stations still all have all their fuel prices end in 9/10?
It's no longer legal here. People got tired of that crap.

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Post by jollyrgr » Tue Aug 26, 2008 9:37 pm

Bob Scott wrote: Do US gas stations still all have all their fuel prices end in 9/10?
It's no longer legal here. People got tired of that crap.
Still legal here. Bunch of crap l like you stated. But I have another problem with gas stations.....

I drive a car with a 42 gallon tank. Gas is $3.859 a gallon. The pumps at some places stop at $75; others at $100 when paying at the pump with a credit card. That is anywhere from 19 to 26 gallons before the pump stops. To fill my near empty tank means I swipe twice. Gas stations doing this claim that this is a requirement of the credit card companies to stop at this amount. Yet I can go to a VERY FEW stations and pump until my tank is full. At the same stations where they stop the pump with a CC I could fill it completely if I were paying cash or paying inside.

A new twist that I do like is they are requiring you to punch in your ZIP code for the credit card when paying at the pump. Nice feature.
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Post by CrazyBillyBob » Wed Aug 27, 2008 6:19 am

jollyrgr wrote: A new twist that I do like is they are requiring you to punch in your ZIP code for the credit card when paying at the pump. Nice feature.
Unless you've recently moved to a new Zip and you can't remember which one the bill goes too :)

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Post by reloadron » Wed Aug 27, 2008 1:48 pm

jollyrgr wrote:
Bob Scott wrote: Do US gas stations still all have all their fuel prices end in 9/10?
It's no longer legal here. People got tired of that crap.
Still legal here. Bunch of crap l like you stated. But I have another problem with gas stations.....

I drive a car with a 42 gallon tank. Gas is $3.859 a gallon. The pumps at some places stop at $75; others at $100 when paying at the pump with a credit card. That is anywhere from 19 to 26 gallons before the pump stops. To fill my near empty tank means I swipe twice. Gas stations doing this claim that this is a requirement of the credit card companies to stop at this amount. Yet I can go to a VERY FEW stations and pump until my tank is full. At the same stations where they stop the pump with a CC I could fill it completely if I were paying cash or paying inside.

A new twist that I do like is they are requiring you to punch in your ZIP code for the credit card when paying at the pump. Nice feature.
Similar here, my truck has a 42 gallon tank. I generally just walk in and pay cash. However if I do use a card things get interesting. If I use my one card as credit I can pump all I want till the thing is full. If I use it as a debit card (which I prefer) the pump will stop at $50. Then I can reset the thing and repeat the process for another $50. Just annoying as heck. My typical fill up is about 35 to 37 gallons.

Ron

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