Swedish rounding is rounding the basic cost of a purchase which is to be paid for in cash to the nearest multiple of the smallest denomination of currency. The term "Swedish rounding" is used mostly in Australia, where such a method has been practised since the 1990s.
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Rounding becomes necessary where low denomination coins in a currency are withdrawn or otherwise made unavailable, but the currency's subdivisions remain the same. Since it may not be possible to make exact change for a purchase, rounding the total bill to the lowest available denomination of coinage is required if a customer is paying in cash. If payment is being tendered using credit card, debit card, EFTPOS or cheque, no rounding is necessary.
The practice was introduced in Sweden following the removal of 1 and 2 öre coins from circulation in 1972. It is called "öresavrundning", meaning "öre rounding". A similar system was later adopted by the Reserve Bank of New Zealand in 1990, when the 1 and 2 cent coins were removed from circulation, and the Reserve Bank of Australia which did the same for its own currency in 1993. At this time, the phrase "Swedish rounding" came into use in both countries.
This was used in Sweden from 1972 to 1985, New Zealand from 1990 to 2006, and is used in Argentina (always rounded down), Australia, Bosnia and Herzegovina, Brazil, Finland, Hungary, Malaysia (though 1 sen coins are still legal tender), The Netherlands, Singapore, Switzerland, and sometimes Italy (almost always rounded down) and Turkey (even though the 1 kuruş coin can still be used). In Chile, where 1 peso coins are legal but rare, prices are rounded to the nearest 5 pesos using the same system.
This is currently used in New Zealand, which eliminated its 5 cent coin in 2006. This is also the case in Hong Kong, which eliminated its 5 cent coin in 1989 and 1 cent note in 1995. In practice only utility bills, petrol stations and banks are still keeping the cent. All other businesses are using only ten cent intervals.
In the People's Republic of China, coins smaller than ¥0.10 are now rare though still valid. As a result, many shops simply truncate their bills down to the next ¥0.10 increment, giving the customer a discount of up to ¥0.09.
In Sweden between 1985 and 1992, prices were rounded up for sales ending in 5 öre.
The following system was used in Denmark until the 25 øre was demonetised on 1 October 2008:
The system used in Norway since 1993[2] and in Denmark since 1 October 2008[3] is the following:
In practice, the proportion of transactions rounded upwards is greater, due to psychological pricing of items ending in 90-99 øre.[4] Rounding is only done on the total sum of a purchase, which makes that effect smaller. In many shops all prices are already rounded to the whole krone, so that no rounding takes place.
The system used in Sweden since 30 September 2010 and to be used in Norway[5] from May 1 2012.
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