>But with 20 million customers a year, and 17% of them paying with cash, the policy will eventually cost Kwik Trip a couple of million dollars a year, McHugh said.

If we figure two-fifths of cash transactions need to be rounded up and the store is losing an average of 1.5 cents each time, their expected losses would be around $2,000, yeah?

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delecti 15 hours ago | parent | next [-]

> Kwik Trip, a family-owned convenience store chain that operates in the Midwest, decided to round down cash purchases in stores where it hasn’t been able to find pennies.

They're rounding all cash transactions down to the nearest nickel, so an average of 2 cents per transaction, 3.4 million customers, gives me $68,000 assuming each "customer" makes a single transaction per year. If they mean that there are 20 million unique customers, not 20m transactions, then the a long tail of customers who make frequent small transactions in cash could make their claim check out.

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velcrovan 15 hours ago | parent | next [-]

Whatever the total ends up being, it's basically a marketing expense that they're electing to make. Probably they do it for a year and then switch to rounding to the nearest nickel, which is what everyone else will be doing.

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pants2 11 hours ago | parent | prev | next [-]

Certianly the costs in employee time making change in pennies and stocking / transporting / changing pennies is way higher

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giantg2 14 hours ago | parent | prev [-]

I would bet they have a way to write it off.

Edit: why disagree? Can't the write it off as a loss, uncollected account, or promotional? Maybe even goodwill

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toast0 12 hours ago | parent [-]

Writing it off as a loss isn't useful.

Without a write off, their income is $X (what they actually collected), with a write off, their income is $Z (what they should have collected) - $Y (what they didn't collect), but $X = $Z - $Y. There's no material difference between counting what they actual collect as income vs what they should have collected minus the goodwill discount. Unless there's some specific tax justification (maybe accounting differences could justify remitting less sales tax overall and retaining more of the funds, etc)

	▲	giantg2 11 hours ago \| parent [-]
		Why wouldn't the write off be useful? I think your formual needs to add "+ ($Y x .3)" for tax deduction if you frame as promotional or other tax write off strategies. It won't be the same as what they would have collected without rounding, but it will be better than if you didn't write off anything.

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paxys 13 hours ago | parent | prev | next [-]

20 million customers doesn't mean 20 million transactions. Considering we are talking about a convenience store I'm sure a large chunk of their customers visit every day, some probably multiple times a day.

Assuming 3.4 million customers (cash users) and 2.5 cents average loss per transaction, it would only take one visit a month for them to cross a million dollars in losses.

Of course at that scale it's not like that million or two is really making a difference to their bottom line. Doing some quick Googling their annual revenue is estimated to be $6-7 billion.

	▲	Jblx2 7 hours ago \| parent [-]
		>visit every day, some probably multiple times a day Anyone have data on what percentage of the population visits convenience stores 500+ times per year? Sounds pretty inconvenient.

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smelendez 15 hours ago | parent | prev | next [-]

They must mean unique customers, not customer transactions.

They have about 878 stores, according to Wikipedia, so if it was transactions, each store would only see about 62 transactions per day, which is way too low.

	▲	terminalshort 15 hours ago \| parent [-]
		Sure. But multiply by whatever number you want and it is still the same percentage of revenue.

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pavel_lishin 15 hours ago | parent | prev | next [-]

If we make the maximally pessimistic assumption that every cash transaction would require rounding down four cents, that's 68,000 customers per year times four cents, which is $136,000 per year.

A more reasonable assumption that half of transactions require rounding down cuts that in half, I suppose.

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patch_collector 15 hours ago | parent | prev | next [-]

20m customers * 17% * 4 cents * 'x' transactions per customer = $136,000 * x

I suppose this makes some sense. In a worst case situation, if every customer makes 10-20 transactions per year, and they always round down the maximum possible amount, they would lose millions per year.

	▲	tengbretson 11 hours ago \| parent [-]
		In many parts of Wisconsin the value of `x` could very easily be 100+, so I'd say this checks out.

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terminalshort 15 hours ago | parent | prev | next [-]

I get $20,400 (20m * 17% * 40% * 0.015). But that's still nothing for a company that does 20 million POS transactions a year.

	▲	jermaustin1 15 hours ago \| parent \| next [-]
		It's cheaper than the credit card fees, that's for sure.
	▲	14 hours ago \| parent \| prev [-]
		[deleted]

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pessimizer 15 hours ago | parent | prev [-]

What's more contemptible: that CNN refused to spend the 30 seconds that it would take to do the math; or that it interviewed a "spokesman" that also didn't spend 30 seconds to do the math, and was sure that nobody would check?

This is the kind of article that should be written by AI (or not written, really.) If you completely fictionalized the empty interviews, nothing would be lost.

Maybe the "spokesman" has been told to angle for a government subsidy for the inconvenience of losing pennies? And from a gas station, which add that goofy fraction of a cent at the end of their pricing.