Wednesday, July 27, 2005


swedish rounding: world-famous in new zealand

For many months I have been mildly confused about what I am charged for goods in New Zealand. Since 1990 New Zealand has had no one or two cent coins, but many items have 99 cent price tags. I am generally charged a dollar for these, but sometimes I am charged only 95 cents.

One day I found a sign on the counter of check out explaining something called "swedish rounding". The explanation said something like they "round down prices ending in 1,2 to 0 and 6,7 to 5 and round up prices ending in 3,4 to 5 and 8,9 to 0." My head was spinning trying to figure out how that worked. I have since see the explanation more simply as 0,1,2 are rounded to zero, 3,4,5,6,7 are rounded to 5, and 8, 9 are rounded to 10.

Even if you can do the math, it doesn't mean you can guess the price. Retailers can use alternative rounding systems, as long as they are consistent. The consumer affairs department notes that for "an item marked $1.99, traders can charge either $1.95 or $2.00."

I was curious about where this swedish rounding concept came from, but nearly every reference to it referred to New Zealand rather than Sweden. Even searching Swedish sites seemed to yield only a merger reference to "Nya Zeeland."

Just as I am figuring this out, New Zealand is in the mist of phasing out the five cent coin. This change is sparking a new round of rounding methods. According to a survey of retailers, rounding practices will vary greatly. Some will round five cent items up, some down, and some will simply round everything up.

As New Zealand abandons its famous swedish rounding, it is left to Germany and other Euro zone countries to keep the tradition alive. Even though a cent in Europe is worth more than a cent in New Zealand, the one and two cent coins are reportedly unpopular with some Europeans. If Sweden ever joins the Euro, perhaps it will reclaim its legacy.

As a Kiwi, I didnt know that retailers will have free reign. Interesting
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