As you all know, the Malaysian government has deemed the one sen coin to be too costly to produce. Starting from April 1 2008, all transactions will be rounded to the nearest five sen.

There’s a lot of misconception about this hearing from friends, colleagues and relatives.

Read these myths and facts about the coming 1 sen rounding exercise so you won’t get cheated when you make a transaction.

Just a note for overseas readers, one sen is the spelling for the Malaysian currency coins, and it is used to describe both the singular and the plural.

Malaysian 1 Sen Coin Myths and Facts

Myth #1

All payments must be rounded up to the nearest 5 sen.

Fact #1

There will be people who want to squeeze that little bit out of you by taking the opportunity to round up all transactions to the nearest 5 sen.

In fact, transactions will be rounded to the nearest 5 sen, which means that 1, 2, 6, and 7 sen will be rounded down while 3, 4, 8, and 9 sen will be rounded up.

◊ ◊ ◊

Myth#2

The rounding must be applied to individual items in the bill.

Fact #2

The rounding applies to the total sum of the transaction only. Make sure you check your receipts.

This means if you buy three items worth 44 sen each, you should only pay RM1.30 (0.44 X 3 = RM1.32, which must be rounded down), not RM1.35 (which is 0.45 X 3).

◊ ◊ ◊

Myth#3

This applies to all types of transactions.

Fact #3

This only applies to cash and non-cash payments for over-the-counter transactions only. Online transactions are exempt from this requirement.

The Internal Trade and Consumer Affairs Ministry (KPDNHEP) defines over-the-counter transactions as “a business transaction which occurs with the physical presence between a business entity and a customer, at the point of sale, with a receipt as a proof of transaction.”

One example given to illustrate the difference is pumping petrol at the petrol station. If you pay at the counter, the rounding applies. If you pay at the pump using your credit card, the rounding does not apply because it is an online transaction.

This means that rounding is applied even if you’re using a credit card to pay for the transaction in the supermarket.

◊ ◊ ◊

Myth#4

The 1 sen coin is obsolete.

Fact #4

Stop throwing away those 1 sen coins.

The 1 sen coin remains legal tender.

You can quote Central Bank of Malaysia Act 1958 (Revised in 1994) to those who refuse to accept 1 sen coins.

However, the maximum number of 1 sen coins you can legally use per transaction is 200. In addition, it will be harder to find them as time goes on and the demand decreases.

Bank Negara will continue to circulate 1 sen coins if there is demand, but they expect demand to slowly decrease to nothing.

◊ ◊ ◊

Additional Requirements Stated by the Malaysian Government

  1. A rounding mechanism table must be displayed with KPDNHEP’s logo at all counters so that customers will be aware of the changes.
  2. The total price before and after rounding must be displayed on the receipt.

Conclusion

I hope this article has cleared any confusion and doubts about this topic.

You can visit the KPDNHEP website for more information.

If you’re in charge of computer systems at your company, make sure your software calculates the correct amount!

Technorati Tags: , ,

Sources: KPDNHEP, Bank Negara

Popularity: 84% [?]

If you want more articles like this, make sure you subscribe to the Frugal Beagle feed. You can also subscribe via email. Please Stumble or with others. Thanks!