Consumers should ask for rounding policy before they buy

The new 10, 20 and 50 cent pieces were bound to cause confusion, says the Consumers' Institute.

Customers should ask retailers what their rounding policy is before paying for goods and services in order to avoid any misunderstandings, the Consumers' Institute has advised.

Consumers' Institute chief executive David Russell said confusion was inevitable with the introduction of the new 10, 20 and 50 cent coins and the withdrawal of the five cent coin last week but consumers could make purchasing easier by checking with retailers before buying items.

"Confusion was always expected, inevitably, particularly while they have the old and new coins in circulation."

There is a three-month transition period for the use of the old and new coins to be used but from November 1 the old coins and the five cent coin will no longer be legal tender.

While it was "very annoying" for consumers it was just part of the process the country was going through, he said.

Mr Russell said he was satisfied with the recommendation that had come from the Retailers Association which stated anything up to and including five cents was rounded down and six cents and above was rounded up

"In the grand scheme of things you are going to be about square."

However the institute had received a complaint from a person which reflected a general annoyance with the rounding system, he said.

A person who went to NZ Post to post a parcel had paid the rounded amount but was given a receipt which had the original amount on the receipt -- not the amount paid, he said.

"While it is only a tiny amount in the grand scheme of things, it will have implications particularly for GST."

Mr Russell said businesses which claimed GST back would notice the difference.

While admittedly small, it was the principle of the issue, he said.

"Company, retailers and in this case NZ Post have to get their head around somebody handing over a certain amount and getting a receipt back with another amount on it."

Mr Russell said while he would not recommended consumers use one form of payment over another, the reality was, more and more people were using eftpos or credit cards -- which meant they were charged to the nearest cent.

"If you use electronic means of payment you will be charged to the last cent," he said.

Mr Russell said instead of people getting annoyed later, consumers should ask beforehand.

"Recognise it will take a couple of months to settle down."

Mr Russell said it was probably older people who were finding the change the most difficult.

Auckland's Newmarket Business Association head Cameron Brewer said the phasing out of the five cent coin had not served any purpose other than "leaving a sour taste in many people's mouths and causing unnecessary work for retailers".

Mr Brewer said there had been "plenty of confusion" and shop assistants had to bare the "brunt of it".

Some consumers were not enjoying the principle of being told the cash price was one amount but then paying by Eftpos and being electronically charged the non-rounded figure, he said.

"The shopping experience will be even further soured after the first of November.

"Those pulling out their old silver will be told it's worthless -- that will be hard on the likes of the elderly."

The changeover was also causing retailers more work, he said.

"Some banks are asking retailers when they do their banking to split their old and new coins up, to speed up the process of getting the old coins out of circulation."

Mr Brewer said the replacement of the silver coins and the phase-out of the five cent coin was "completely unnecessary and premature".

"It's been a nice little project for some bureaucrats in Wellington but at the shop counter it's simply proving to be another unnecessary compliance cost that's only adding angst."

- NZPA