# Frequently asked questions (FAQ) about the rounding rule

The Riigikogu passed an amendment to the law so that from 1 January 2025 the final price of a basket of shopping in a sales outlet will be rounded to the nearest five cents. How the rounding rule will be applied in Estonia is explained here.

**1. Why should cash payments be rounded at all?**

One and two-cent coins are expensive to produce and handle, and they place a heavy burden on the environment. Nothing very much can be bought with them, and so they are barely used at all for making payments. These small coins consequently remain unused and do not return into circulation. Traders need the little coins though to give to their customers as exact change, and that is why ever more of them are constantly being minted. Introducing the rounding rule would mean that no more new one and two-cent coins would need to be produced.

**2. What does the ‘rounding rule’ mean?**

The rounding rule means that if a customer pays in cash in a physical point of sale, the seller rounds the price of the total shopping basket, not of each individual item, up or down to the nearest five cents. This means that the basket paid for in cash may be up to two cents cheaper or more expensive.

The rounding rule also applies to the cash refunds of money paid for goods or services purchased.

A purchase amount ending in 1, 2, 6 or 7 euro cents is rounded down, and an amount ending in 3, 4, 8 or 9 euro cents is rounded up. If the customer can choose the means of payment they use, they can also choose whether the purchase amount is rounded (cash payment) or not (other paper or electronic payment).

*Examples*

If a shopping basket contains four items that are priced at €2.28, €15.32, €11.99, and €1.17, and the customer prefers to pay in cash, the prices of individual products are not rounded. However, the total price of the shopping basket at the checkout will be rounded down from €30.76 to €30.75. If the customer pays by card, then they still pay €30.76 for their purchase.

If there is only one item in the basket priced at €2.28 and the customer prefers to pay in cash, the value of the basket will be rounded to €2.30 at checkout. If the customer pays by card, then they still pay €2.28 for the purchase.

**3. Who will have to apply the rounding rule?**

If a customer pays in cash at a physical point of sale, the trader must round the price of the entire shopping basket (instead of each individual product or service) up or down to the nearest five cents.

The obligation to round off the final price applies to enterprises under the Law of Obligations Act and to traders (both natural and legal persons) under the Consumer Protection Act. A legal person governed by public law is a trader if it carries on an activity in a private-law relationship for purposes connected with its trade, business or profession.

**4. Will the rounding rules mean that it is no longer possible to pay with one and two-cent coins?**

You can still pay, as all currencies are legal tender in the euro area. However, it should be remembered that a trader is obliged to accept up to 50 valid circulation coins at a time, regardless of their value. The one and two-cent coins can only be fully phased out by a decision at the EU level, and there are no such plans at the moment.

**5. Are one and two-cent coins no longer used as change?**

The final price of the shopping basket is rounded mathematically to the nearest five cents when the customer pays in cash. However, during the initial period of rounding, while people still have one and two-cent coins, the change may be smaller than five cents after all and customers may need to get their change in one and two-cent coins. This will be a temporary situation though, as the number of one and two-cent coins in circulation will start to decrease after the rounding rule has been put in place. One and two-cent coins will still remain legal tender both as means of payment and as change.

*Example*

A customer pays for a €1.05 shopping basket with a €1 coin and a ten-cent coin. The trader must give five cents as change. If they do not have a five-cent coin, they can do this with, for example, two two-cent coins and one one-cent coin.

The experience of those countries that have already introduced the rounding rule is that the number of one and two-cent coins in circulation drops sharply after the rule is introduced. Experience has also shown that shopkeepers no longer needed to keep a separate stock of small coins for giving change.

It may happen on occasion after the rule is introduced that a shopkeeper does not have enough small change on hand. In that case the trader and the customer must find a solution that suits them both, like a card payment for example. If they cannot agree on a solution then they must forgo the transaction.

*Example*

The customer uses a one-euro coin and a three two-cent coins to pay for a basket of shopping that costs 1.05 euros. The shopkeeper should give back one cent in change. If the shopkeeper does not have a one-cent coin, they will need to agree with the customer on a solution that suits them both. They might agree for example that the payment will be made by card so that no rounding is applied, or the customer may waive the one cent in change, or the seller may give a discount. If they cannot agree on a solution then they must forgo the transaction.

**6. Will traders no longer be able to set prices that end in a nine, such as 3.99 euros?**

They can still do so, as only the total price of the shopping basket is rounded, not the price of individual products, and only if the customer wants to pay in cash. The introduction of the rounding rule is without prejudice to the determination and publication of the price of a good or service to the nearest one cent. The price of the shopping basket is not rounded up or down, for example, if the customer makes a card payment.

**7. How does the rounding rule work if a customer pays one part of the amount of the shopping basket in cash and the other part by another means of payment?**

If a customer pays for goods or services both in cash and by another means of payment (e.g., payment card, gift card, voucher or mobile contactless payment), only the amount paid in cash is rounded up or down if the cash payment is the last to be made. The final price of the shopping basket is rounded.

*Examples*

The amount of the shopping basket is €28.44.

The customer wants to pay €20.32 in cash and the rest by payment card. The amount paid in cash, i.e., €20.32 is not rounded. The cash payment of €20.32 is deducted from the final amount: 28.44 euros – 20.32 euros = 8.12 euros. The customer pays €8.12 by payment card and no rounding is applied.

In the opposite case, €8.12 is paid first by payment card and then €20.32 in cash. In this case, rounding is applied and €20.30 must be paid in cash.

**8. How does the rounding rule work if a customer pays part of the basket amount with loyalty, customer, bonus points or similar means of payment?**

Only the part paid in cash is subject to rounding. Loyalty, customer or bonus points and any other form of payment are not cash payments and are deducted from the total amount of the shopping basket before payment is made in cash or by any other means of payment.

*Example*

The amount of the shopping basket is €28.44. The customer wants to pay with loyalty points worth €1.12. €27.32 remains to be paid. The rounded final amount of the shopping basket is €27.30 if paid in cash and €27.32 if paid by other means.

**9. Are there any cases where the rounding rule will not apply?**

The final price to be paid is not rounded if a means of payment other than cash is used or if the final price of the basket is less than three euro cents.

*Example*

If the value of the shopping basket is €0.01 or €0.02, it is not rounded to zero, but the exact amount is paid in cash or by other means of payment.

**10. Can the customer demand that the rounding rule not be applied?**

No, this cannot be requested when paying in cash. The rule is mandatory for all when paying in cash. This is the case even if the consumer has an exact amount. However, the consumer can choose another payment method (card payment or transfer, bonus points, etc.) to which the rule does not apply.

*Example*

The final amount of the shopping basket is €1.08. The customer has to pay €1.10 in cash even if they have exactly €1.08. If they pay by any other means of payment, they pay €1.08.

**11. Can the trader refuse to apply the rounding rule?**

No, from 1 January 2025 onwards, the rounding rule for cash payments at physical points of sale will be mandatory for all traders. The smallest denomination of change is five cents.

According to the law, national supervision of compliance with the rule is carried out by the Consumer Protection and Technical Regulatory Authority.

**12. Can the trader still determine the order of payment if the customer wants to pay both in cash and by other means?**

Yes. The introduction of the rounding rule does not regulate this.

**13. How are refunds for deposit packaging settled?**

The rounding rule applies to the payment of the refund for deposit packaging in cash.

*Examples*

The amount of the refund for a customer's deposit packaging is €1.12.

a) If the customer only wants to redeem the refund receipt, the cash payment is rounded down to €1.10. If the refund is made to another means of payment, the customer receives €1.12.

b) If the refund for deposit packaging is used as part of the payment for the shopping basket, the amount of the refund is deducted from the final price of the shopping basket before payment is made in cash or by another means of payment. If the final value of the shopping basket is €5.30, the deposit packaging refund of €1.12 is deducted from the total value of the basket, and the remaining €4.18 is paid by the customer as agreed.

c) If the customer pays for the shopping basket with a refund received for deposit packaging and the final value of the shopping basket is less than the value of the refund amount, the cashier must round off the amount of the cash refund to be made. If the final value of the shopping cart is €1.00, the customer can pay for it with the refund received for deposit packaging. The remaining €0.12 is paid to the customer rounded down in the case of a cash payment (€0.10). In the case of making the payment to another means of payment, the amount is still €0.12.

**14. When refunding money paid for goods or services, does the trader still have the right to choose the means of payment for the refund?**

The introduction of the rounding rule does not regulate this. The rounding rule does not regulate the agreement of contractual terms. If the trader has informed the customer of the method of returning the money paid for the goods or services and the customer agrees to the trader’s terms and conditions, this means they have agreed on the method of payment.

**15. How does the rounding rule work for the refund of money paid for goods or services if they were paid for in cash and the refund is also made in cash?**

Upon returning goods purchased and refunding money paid for services provided, the rounding rule applies if the goods or services were paid for in cash and the money is refunded in cash. One and two-cent circulation coins are not used for refunds. If a shopping basket containing products with different prices is returned, the total price of the basket is rounded up or down. If, for example, only one item is returned from this basket, the price of the single item must be rounded. If several products from the basket are returned, the final price of the basket made up of these individual products must be rounded. This is also the case if the final amount was not subject to rounding when paying in cash. The same applies to services.

*Examples*

A customer paid €30.75, rounded off, for their shopping basket, which included four products priced at €2.28, €15.32, €11.99 and €1.17.

a) The customer is refunded €30.75 in cash for the entire basket.

b) A customer wants to return a product that cost €2.28. In this case, the price is rounded up and the customer gets €2.30 back in cash.

c) A customer wants to return products priced at €2.28 and €11.99. The prices of these products are added together and the value of the shopping basket is rounded down from €14.27 to €14.25. The customer gets €14.25 back in cash.

**16. How does the rounding rule work when refunding money paid for goods or services if the payment was made by a means of payment other than cash and the refund is made to another means of payment?**

In the case of the return of goods purchased and the refunding of money paid for a service provided by means of payment other than cash, the rounding rule does not apply if the money for the goods or service is refunded by means of payment other than cash.

**17. How does the rounding rule work in the case of a refund of money paid for goods or services if they were paid for by a means of payment other than cash and the refund is made in cash?**

If the goods or services were paid for by a means of payment other than cash, but the parties agree to pay in cash when returning the goods or services, the rounding rule also applies. One and two-cent coins are not used for refunds.

*Examples*

A customer used another means of payment to pay €30.76 for their shopping basket, which included four products priced at €2.28, €15.32, €11.99 and €1.17.

a) The total amount of €30.75 is refunded to the customer in cash for the entire shopping basket.

b) A customer wants to return a product that cost €2.28. In this case, the customer receives a cash refund of €2.30, rounded up.

c) The customer wants to return products priced at €2.28 and €11.99. The prices of these products are added together and the value of the shopping basket is rounded down from €14.27 to €14.25. The customer gets €14.25 back in cash.

**18. How does the rounding rule work in the case of a refund of money paid for goods or services if they were paid for both in cash and by another means of payment?**

In the case of combined payments, the order in which the means of payment were used to pay for the goods or services purchased is irrelevant: only the means of payment chosen and their order upon making a refund are important. The rounding rule is applied if the refund for the goods purchased or services received is made in cash.

The final price to be refunded is not rounded if the refund is made to another means of payment or if the value of the basket is less than three cents. One and two-cent coins are not used for refunds.

*Examples*

The value of the shopping basket was €28.44, for which the customer paid first €20.32 in cash and the remaining €8.12 by other means of payment, or first €8.12 by other means of payment and the remaining €20.30 in cash, rounded up.

**a) Refunds are only made to another means of payment.**

a. The total amount of €28.44 paid for the shopping basket is refunded to the customer to another means of payment.

b. A customer wants to return a product that cost €2.28. The customer is refunded €2.28 to another means of payment.

c. A customer wants to return products that cost €2.28 and €11.99. The customer is refunded €14.27 to another means of payment.

**b) Refunds are only made in cash.**

a. The total amount paid for the shopping basket is refunded to the customer in cash, rounded to €28.45.

b. A customer wants to return a product that cost €2.28. The amount is refunded to the customer in cash, rounded to €2.30.

c. A customer wants to return products that cost €2.28 and €11.99. The amount is refunded to the customer in cash, rounded to €14.30.

**c) Refunds can be made in cash or by another means of payment.**

a. For example, a customer can get a refund of €20.30 in cash and €8.14 by another means of payment for their entire shopping basket.

b. A customer wants to return a product that cost €2.28. The customer can, for example, get a refund of €2.00 in cash and €0.28 by another means of payment for their entire shopping basket.

c. A customer wants to return products that cost €2.28 and €11.99. The prices of these products are added together and the shopping basket total is €14.27. The customer can, for example, get a refund of €10.25 in cash and €4.02 by another means of payment.

The value of the shopping basket was less than three cents.

**a) €0.02 of the shopping basket was paid in cash only.**

a. By agreement between the parties, a refund of €0.02 is made for the entire shopping basket.

b. A customer wants to return a product that cost €0.01. By agreement between the parties, €0.01 is refunded to another means of payment.

c. A customer wants to return a product/service with a total price of €0.01. By agreement between the parties, €0.01 is refunded to another means of payment.

**b) €0.02 of the shopping basket was paid by other means of payment only.**

a. The customer is refunded €0.02 for the entire shopping basket to the other means of payment.

b. A customer wants to return a product that cost €0.01. The customer is refunded €0.01 to another means of payment.

c. A customer wants to return a product/service with a total price of €0.01. The customer is refunded €0.01 to another means of payment.

**c) A shopping basket of €0.02 was paid for both in cash and by other means of payment (in no particular order).**

a. The customer is refunded €0.02 for the entire shopping basket to the other means of payment.

b. A customer wants to return a product that cost €0.01. The customer is refunded €0.01 to another means of payment.

c. A customer wants to return a product/service with a total price of €0.01. The customer is refunded €0.01 to another means of payment.

**19. Does the rounding rule apply to paying an invoice in cash?**

Yes. If goods or services are paid for in cash, the total amount of the invoice is rounded.

**20. Does the rounding rule apply to the purchase of goods or services for resale?**

Yes, the same rounding rule applies to both the purchase of goods and services and the sale of goods and services, i.e., if the payment is made in cash, the amounts are rounded.

**21. Does the rounding rule also apply to cash payments for ridesharing services?**

Yes, the same rounding rule applies when paying for a ridesharing service in cash. Rounding does not apply to other means of payment.

**22. How is the retail price of cigarettes rounded off?**

If a customer wishes to buy a single pack of cigarettes and pay in cash, the amount must be rounded up or down as set forth by the law.

In 2025, the design of the revenue stamp for tobacco products will change, meaning that new revenue stamps will have prices rounded to the nearest five cents. Should the need for rounding arise in the first three months of 2025 (in relation to an old revenue stamp), this will have to be done. The transition to the new stamps will last for three months, i.e., the sale of products with the old stamp will be allowed until 31 March 2025. Businesses can already order revenue stamps for cigarettes on which the printed retail price is communicated to the nearest €0.05. Pursuant to subsection 62 (3) of the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act, from 2024 onwards, the retail price of cigars and cigarillos released for consumption must be communicated to the nearest €0.10. According to data from 2023, cigarette prices are generally communicated either to the nearest five or ten cents, with only one case of a price communicated to the nearest seven euro cents. The prices of cigars and cigarillos are also generally communicated to the nearest five or ten cents.

**23. What needs to be done when selling medicines?**

The rounding rule applies to the sale of medicines in the same way as to the sale of other goods and services. The final price of the shopping cart must be rounded and only in the case of a cash payment. The introduction of the rounding rule does not change anything regarding the mark-up or price cap for medicines.

**24. Does the application of the rounding rule have an impact on the calculation of VAT?**

The rounding rule does not change the taxable value of goods or services, as it applies to the cost of a shopping basket where the payment is made in cash in physical point of sale. This amount already includes VAT. The taxable amount of a transaction is the selling price of the goods or services, excluding VAT. Therefore, in the case of a cash payment, rounding of the value of the shopping basket does not change the VAT calculation. The difference arising from rounding is not covered by the Value Added Tax Act.

**25. What additional burden will the rounding rule bring for traders?**

The rounding rule will make it easier and quicker to pay in cash, and will also reduce cash-handling costs in the long run. At the same time, traders will have to pay for one-off costs associated with the change, such as development work on cash register systems and business software, and think about how to inform their customers.

Information on the rounding rule must be easily visible, for example on the wall or display of the point of sale or as a notice at the checkout. It is also important that the rounded final price of the goods or services is presented in a way that distinguishes between the selling price and the unit price of the goods and the final price of the service. This must be clear to the consumer. For example, if the price of the goods is €3.76, the final price when paying in cash at the checkout is €3.75, but when paying by other means of payment (e.g., bank card) the final price is still €3.76, which is the communicated price of the goods.

**26. How should the merchant communicate the rounding of the final price?**

When cash payments are made in euros at a physical point of sale, information about the rounding of the final price of the goods or services must be disclosed to the customer in writing in a clearly legible and unambiguous manner, e.g., by means of notices displayed on the wall or screen of the point of sale or at the checkout. Customers should understand exactly how their final price will be rounded. The information should be provided before the purchase is paid for, so that the consumer knows the final price of the shopping basket when choosing the means of payment.

**27. How should the merchant disclose the rounding of the final price?**

When cash payments are settled in euros at a physical point of sale, the rounded final price paid for the goods or services must be presented in such a way as to be distinguishable from the final price of the goods, unit or service. It should be clear to the consumer that the selling price and unit price of the goods and the final price of the service may be different from the final price payable if a rounding rule is applied.

As rounding of the final price to be paid is required, it can only take place at the time of payment for the goods or services. It is therefore important that the final price is clearly and correctly disclosed to the consumer before paying for the purchase. The amount of rounding and the final price to be paid must also be disclosed. This way, when choosing a payment method, the customer will understand how rounding affects the final price of the shopping basket. For the sake of transparency and in order to avoid conflicts, it is recommended that these amounts be displayed on the customer-facing screen of the POS system.

*Examples*

A shopping basket total of €10.02 is displayed to a customer on a checkout screen.

a) The customer wants to pay €5.00 with their payment card. After which the remaining €5.02, rounding of -€0.02 and the amount to be paid in cash, €5.00, is displayed. The customer can also see information on the payment amounts and stages on the separate lines of the receipt.

b) The customer wants to pay €5.02 in cash, and the remaining €5.00 is displayed on the screen. The customer does not have enough money on their payment card, so pays €2.82 with it. After which the remaining €2.18, rounding of €0.02 and the amount to be paid in cash, €2.20, is displayed. The customer can also see information on the payment amounts and stages on the separate lines of the receipt.

**28. Why are five-cent coins not being covered by the rounding rule?**

Countries in the euro area that have introduced rounding rules have required the final prices of purchases to be rounded at cash register to the nearest five cents. Statistics from Estonia show that people use five-cent coins more for paying with, and so they return into circulation a lot more than one and two-cent coins do. Statistics on the recirculation of coins show that the environmental footprint of one and two-cent coins is a much more severe problem than that of five-cent coins.

**29. Will the rounding rule push inflation up?**

Prices will be rounded both upwards and downwards, and the rounding applies only to the final purchase amount. The price of purchases paid in cash will rise or fall as a result by up to two cents. It is important to remember that the customer chooses whether to pay by cash or by card and so chooses for themselves whether or not the rounding rule will apply. The trader cannot influence that, and neither can the trader affect the total price of the shopping, as it is the customer who chooses which goods and services at which price to put into their basket.

The impact of the rounding rule on the price of a basket of shopping is a maximum of two cents, which is very small, and so rounding will not affect the prices of goods in shops. This has also been proven in other countries in the euro area that have already introduced a rounding rule. The latest to do so was Slovakia.

**30. Is there public support for the introduction of the rounding rule?**

A Eurobarometer survey in autumn 2023 found that **75% of people in Estonia were in favour of introducing the rounding rule, and 21% were against.**

The same survey found that there is **no country in the euro area where a majority of people are in favour of continuing production of one and two-cent coins**, and 66% thought that small denomination euro cent coins could be removed from circulation.

**31. Is there support for the introduction of the rounding rule from stakeholders in Estonia?**

Before the draft amendment to the law was sent to the Riigikogu, opinions were sought about the rounding rule from a very wide selection of stakeholders, covering the

**business organisations**the Estonian Traders Association, the Estonian Association of SMEs, the Estonian Small Traders Association, the Estonian Chamber of Commerce and Industry and the Estonian Banking Association; the**consumer organisations**the Estonian Association of Pensioners’ Societies, the Consumer Protection and Technical Regulatory Authority, and the Estonian Chamber of People With Disabilities; the**Ministries**of Justice, Economic Affairs and Communications, and the Climate; the Finance Committee and Economic Affairs Committee of the**Riigikogu**and all the political parties; and**other stakeholders**like the commercial banks, cash service providers Hansab AS and Brink’s Estonia OÜ, and the Estonian Society for Nature Conservation.**Opinions were given**by the Ministry of Justice, the Ministry of Economic Affairs and Communications, the Estonian Banking Association, the Estonian Traders Association, the Estonian Chamber of Commerce and Industry, the Consumer Protection and Technical Regulatory Authority, Hansab AS, and the Estonian Pharmacists’ Association,**all of whom supported the introduction of the rounding rule. The proposals that were received were taken into account as far as possible in the draft, and the positions were clarified**.Eesti Pank has sort opinions on the possible introduction of the rounding rule from the Estonian Traders Association, the Estonian Small Traders Association, and the Estonian Association of Pensioners’ Societies,

**all of which were generally supportive**.

**32. Are there other countries in the euro area that have introduced a rounding rule and stopped using small coins?**

The latest to decide to stop using small coins was Lithuania, and the change will come into force there from 1 May 2025. Countries that have already made the change are Finland, the Netherlands, Ireland, Italy, Belgium and Slovakia.

Introducing rounding rules equally across the whole euro area has been on the agenda for the European Commission in recent years, but has been shunted aside by more urgent issues, notably the pandemic and then the war in Ukraine.

**33. Why is the rounding rule being introduced later in Lithuania?**

A national smart cash register requirement will start to apply to merchants in Lithuania on 1 May 2025. The preparations needed for introducing the rounding rule were bundled in with the set of changes that this will require to IT systems.

**34. Has Estonia ever had a similar rounding rule before?**

Estonia also had a rounding rule for the kroon. Eesti Pank stopped issuing the five sent coin for the Estonian kroon in 1997, and from 2004 until the euro was introduced in 2011 the final price of goods and services was rounded under §9(1) of the Trading Act, which allowed the final price of goods and services to be rounded to the nearest 10 cents. Eesti Pank believes that Estonian society coped well with the change at that time.

**35. When will the rounding rule start to apply?**

The rounding rule will start to apply from 1 January 2025.

**36. Where can I get more information?**

- The Act on the Introduction of the Euro and Settlement of Cash Payments in Euros (EKVS) in the Riigi Teataja, wording effective from 1 January 2025.
- Alcohol, Tobacco, Fuel and Electricity Excise Duty Act (ATKEAS) in Riigi Teataja, wording effective from 1 January 2025.
- Consumer Protection Act (TKS) in Riigi Teataja, wording effective from 1 January 2025.
- Processing of the draft act in the Riigikogu – explanatory memorandum.

*Last updated: 26.08.2024*