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Bill

SB 365

Legal tender; authorizing the rounding of in-person cash transactions to the nearest five cents

2026 Regular Session Introduced by Jay Hovey

Alabama bill authorizes in-person cash transaction rounding to nearest nickel, eliminating penny use in physical retail purchases.

Currently Indefinitely Postponed
#consumerprotection
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Bill Summary · SB 365

Legislative bill overview

SB 365 would allow businesses to round cash transactions to the nearest five cents in Alabama, eliminating the need for pennies in face-to-face purchases. This means a $10.03 purchase could be rounded down to $10.00, while a $10.03 purchase could be rounded up to $10.05, depending on the final digit. The bill applies only to in-person transactions paid with physical currency.

Why is this important

Penny production costs the U.S. Mint significantly more than the coin's face value, and many retailers and customers find penny handling cumbersome. This bill addresses practical cash-handling inefficiencies and aligns with similar policies in Canada and several other countries that have eliminated low-value coins. However, it also raises questions about consumer protection and cumulative rounding effects on purchases.

Potential points of contention

  • Cumulative rounding impact: Customers making multiple purchases could systematically lose small amounts of money if rounding favors businesses, or conversely, businesses could see reduced margins if rounding consistently favors consumers
  • Price transparency concerns: Advertised prices ($10.03) wouldn't match final amounts charged ($10.00 or $10.05), potentially confusing consumers or creating disputes
  • Equity issues: Low-income consumers who rely heavily on cash transactions may be disproportionately affected by systematic rounding losses compared to credit card users

Compiled from official sources — confirm details with the bill’s official record.

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