Penny-pinching: Washington lawmakers consider bill to reduce need of 1-cent coin

OLYMPIA – While an announcement that the U.S. Mint would no longer mint new pennies prompted concerns of an impending shortage, some state lawmakers now want to make the coin unnecessary at the checkout counter.

The Senate Business Committee approved legislation Wednesday that would require cash transactions to be rounded up or down to the nearest five-cent denomination. A companion bill is scheduled for a vote in committee Wednesday afternoon.

The law would mirror what our neighbors to the north did after the Canadian mint stopped making pennies in 2012. Several states are considering similar legislation, while the United States Postal Service and many businesses already have adopted the practice.

The change would only impact cash payments. Online transactions and credit and debit card payments would not be impacted by the law. The transaction would be rounded either up or down on the final total of a transaction after all other taxes and fees have been implemented.

As she testified in committee on Jan. 28, Sponsor Noel Frame, D-Greenwood, said the coin has become less relevant in recent years.

“We were joking in my office that the phrase is ‘Take a penny, leave a penny.’ But we’re about to leave the penny behind,” Frame said. “And so we actually need a framework for predictability for our businesses.”

If approved, the bill would take effect 90 days after the legislature adjourns.

The plan has received broad support from business organizations, though several asked for amendments to make the bill easier to enact.

Amber Carter, who represented the Washington Retail Association, said the organization supports the legislation, but asked for language protecting businesses that are audited. Carter also asked for protection for potential consumer protection violations.

“We have seen claims issued for smaller things,” Carter said. “So we really want to make that protective advance now rather than dealing with it later.”

Representing the Washington Food Industry Association, Molly Pfaffenroth said many businesses already made the switch after struggling to make exact change.

“Many stores have been rounding up or down to the nearest nickel, but have been concerned about this practice without official guidance from the state,” Pfaffenroth said.

Pfaffenroth requested guidance for customers who use food stamps, as retailers are legally required to charge them at the same amount as customers who use other payment methods.

Brandon Housekeeper of the Northwest Grocery Retail Association requested that the bill be permissive, so that customers who have exact change still could pay without either rounding up or down. Housekeeper also asked for protection from ordinances in King and Snohomish counties that require cash payments to be charged the same as those that use credit cards.