No more cumbersome searching for change in your wallet and questions “may you owe a penny?” The President's Chancellery has received a petition that can completely revolutionize the way we pay for regular shopping. The author of the document, auditor and financier, demands the liquidation of coins with denominations 1 and 2 grosz, pointing out the absurd cost of their production and logistical problems. If the thought is supported, Poles will say goodbye to the smallest denominations, and prices in stores will be rounded to the full 5 cents. This is simply a change that can come into force in the coming years, bringing both relief and any controversy, especially in the context of rising inflation. Are we witnessing the beginning of the end of tiny cash in Poland? See what this means for your wallet and why economists are beating the alarm.
A penny more costly than its value: Why does NBP lose millions?
The paradox of the Polish monetary strategy has been a subject of discussion among experts for years. As the portal forhandlu.pl informs, the cost of producing 1 single penny is as much as 3 grosz. This means that the National Bank of Poland bears a failure on all recently minted coin, paying for its execution 3 times its nominal value. In the era of cost optimization and digitisation, keeping specified inefficient denominations in circulation seems anachronism.
The problem does not end with production costs alone. As we read in the justification for the petition, as quoted by spidersweb.pl, 1- and 2-cent coins “have a negligible purchasing value and at the same time make crucial production costs and logistical problems”. tiny coins seldom return to banks, falling behind in homes, bank accounts, and even in the garbage. This further increases the request to strike new, deficit coins, creating a vicious cycle of losses for the state. Withdrawing these denominations could bring savings in PLN million per yearwhich are presently wasted on maintaining unprofitable cash.
Portfolio Revolution: How will rounding change your regular shopping?
A key component of the proposal is the introduction of mathematical rounding of the final amounts of payments to the full 5 cents. According to the assumptions of the petition, rounding down would be mandatory at endings 1-2 and 6-7 grosz, while up at 3-4 and 8-9 grosz. Importantly, this rule would concern only cash payments. Non-cash transactions, specified as card or telephone payments, would stay unchanged, which aims at gradual alternatively than revolutionary, leaving tiny cash.
What would that look like in practice? Here are any examples:
- Account PLN 12.97 - You'll pay 13.00 zł (you'll pay 3 cents)
- Account PLN 15.42 - You'll pay PLN 15.40 (you'll save 2 cents)
- Account PLN 8.76 - You'll pay PLN 8.75 (you'll save 1 penny)
- Account PLN 22,23 - You'll pay PLN 22,25 (you'll pay 2 cents)
The most innovative aspect of the petition is the thought of creating Social Rounding Fund. Surplus resulting from rounding up, e.g. those 2 groszy, erstwhile the bill of PLN 7.98 is rounded up to PLN 8.00, would go to public benefit. In addition, the value of the material from the decommissioned coins, after deducting the recycling costs, would besides contribute to this fund. At national level, these tiny amounts could rise crucial resources for crucial social initiatives.
Hidden rise or relief for consumers? Experts inform against inflation
Despite the apparent benefits of simplifying transactions and savings for the state, the proposal to remove tiny coins besides raises concerns. Economist Marek Zuber in his conversation with “Fakt” warns against possible negative effects on consumers. "It is worth remembering that erstwhile inflation increases by 0.2 percent, it is simply a large national discussion about expensiveness. In the meantime, this is the kind of price increase that would should be expected if specified rounding had actually been introduced," Zuber estimates. With hundreds of thousands of transactions a day, even tiny differences can add up to the large amounts that will yet be paid by customers.
The expert points out differences in price strategies. In large commercial networks, the alleged “remains” dominate. psychological prices, specified as PLN 7.99 or PLN 9.99, which would always consequence in a surcharge if rounded. At bazaars or tiny shops prices are frequently rounded to full gold. On the another hand, proponents of change argue that on a monthly basis, with the presumption of respective twelve cash transactions, the strategy was designed to circular up and down to any degree balance and statistically should not importantly affect the household budget. The top immediate benefit would surely be to end the frustrating situation with spending the remainder and speeding up the service in stores.
Poland against the World: What will you do with the pennies before they disappear?
The elimination of the smallest denominations is simply a global trend, and Poland is not isolated in this. The United States has been considering withdrawing cents for years, and many European countries have already taken specified decisions. An example is Finland, which has not issued 1 and 2 cent coins since 2002, effectively utilizing the rounding system. global experience shows that trade is becoming more liquid and cash handling costs are falling, without a crucial increase in retail prices.
President Karol Nawrocki, after receiving the petition, has respective options for action: he can give it a legislative run, mention it to the applicable ministry or reject it. If it decides to support it, the bill will go to the Sejm, and the full legislative process may take time from a fewer months to a year. This means that consumers request to prepare for possible changes. If you have jars of tiny coins at home, it is worth to exchange them at the bank or to spend them in the store. Remember, too, that watching the prices in stores and the possible shift to non-cash payments is simply a natural trend that can only accelerate.
The withdrawal of the smallest coins is not only a substance of convenience, but besides of wider economical consequences. This is an chance for millions of savings for the state budget, a simplification of trade and a possibly innovative Social Rounding Fund. Regardless of the final decision, the discussion about the future of a penny in Poland has already begun, and the consequence can truly affect the regular lives of millions of Poles.
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The president got a petition. No more 1 and 2 cents? store prices rounded!
