Look for This: Rounding on Restaurant Checks

penny2Next time you dine out, take a close look at your check. Restaurants are starting to round the pennies on customers’ bills up or down, usually to the nearest nickel, to avoid having to deal with pennies. Chipoltle restaurants were caught doing this without notifying customers, and when customers noticed the practice and expressed irritation, the chain added a line on the bill titled “rounding” to openly account for the missing change. They also started rounding down in diners’ favor.

Apparently it’s worth it.

Restaurateurs say rounding speeds up finalizing bills and eliminates the hassle and expense of dealing with pennies, which are quickly becoming passe’. After all, pennies are now so worthless that people drop them all the time and don’t even bother to pick them up.  Some businesses cope with the penny problem with “take a penny, leave a penny” jars, but many are just throwing up their hands and declaring they are done dealing with pennies altogether.

Some customers who have noticed the practice complain that restaurateurs are intentionally overcharging customers. Some restaurants keep pennies on hand for people who protest, but remarkably few people do. Evan, who owns a diner in Grand Junction, Colorado and has a rounding policy and says that statistically speaking, he’s found that for every transaction where he gives away two cents, there’s a transaction where he makes two cents. He keeps some pennies on hand for people who protest the rounding policy but few have. The one time a customer brought up his dissatisfaction with the rounding policy, the customer mentioned that he ate there once a week and said it was “adding up.” Evan says, “I calmly handed them a quarter and said, ‘Well, OK then. I guess we’ll be all set for the next six months. Remind me then I’ll give you another.'” The customer sheepishly took the money. “He continued to come in” Evan said, “but I don’t recall having to give out the other quarter.”

Abandoning the penny is an evolutionary thing. Half-pennies existed at the turn of the 20th century, but now we would never think of such a thing. Some business owners say that the cost of dealing with pennies exceeds their value, and they are correct. It now costs the government more to make a penny than a penny is worth; in 2011, it cost the U.S. Treasury 2.4 cents to make one penny.  Consumers also encounter rounding in lots of other venues without questioning it. For example, in many cities sales tax is a fractionated amount, like 7.75%, which retailers routinely round up to 8 cents on the dollar. While it is archaic and ridiculous, gasoline prices are always expressed in 9/10ths of a cent, and we don’t question that and pay whatever the pump says we owe. Plus, we’ve probably all have had an occasion when a server has rounded our check informally, giving us back just a bit more change to avoid having to deal with pennies or nickels.

So rounding could easily become the next cultural economic wave. In case it does take off, here are a few tips for restaurant owners considering rounding: Make the policy less onerous by always rounding in the customers’ favor. Work out prices so you don’t round up on the tax, and be transparent about it by adding a line indicating “rounding” on the tab.

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