The U.S. penny is on its way out. After more than a century in circulation, the 1-cent coin is being phased out due to rising production costs and the increasing dominance of digital payments.
While the change might seem simple on the surface, it actually brings up key considerations for how prices are set, rounded, and perceived – especially for online businesses.
💡 Why Is the Penny Retiring Production?
Each penny costs over two cents to produce, making it an inefficient part of the currency system. Other countries like Canada, Australia, and New Zealand have already retired their lowest-denomination coins for the same reason.
As cash use declines and digital payments take over, the U.S. is following suit to simplify transactions and cut costs.
🛒 What Does This Mean for Online Pricing?
If you sell products online, you’re likely asking:
Do I need to update my product prices? Will this affect how I list or market my items?
Here’s what to consider:
1. Rounding Will Matter More
With no penny, physical cash transactions will be rounded to the nearest five cents. While this won’t directly impact credit card or digital payments, it changes how pricing is perceived and expected. Some shoppers may expect rounder pricing across the board.
2. The $9.99 Pricing Strategy Might Lose Its Edge
That familiar $9.99 or $19.99 pricing strategy may no longer have the same psychological appeal if totals are rounded anyway. While it has long been used to make prices seem lower than they are, customers may now view it as outdated or unnecessary.
3. Simplicity Wins in a No-Penny World
Clean, round numbers can improve trust and conversion – especially online, where transparency and user experience are crucial. A product listed at $10.00 may now feel just as affordable as one at $9.99, with less friction at checkout.
💻 Already There with UltimateWB
At UltimateWB, we’ve already embraced this shift from the beginning. We have opted for rounded pricing to the dollar, for simple, clean pricing that aligns with customer expectations in a penny-free world.
Whether you’re building a small shop or scaling a full e-commerce site, UltimateWB gives you the flexibility to price your products how you want.
✅ What Should You Do Next?
If you have an online store:
- Review your pricing strategy. Consider whether sticking with .99 prices still makes sense.
- Update your product listings if needed for cleaner, rounder numbers.
- Monitor customer behavior. Test whether rounded prices convert better.
And if you’re using UltimateWB, you’re already set up to make the transition smooth.
💬 In Summary…
The end of the penny may feel like a small piece of news, but it reflects a bigger shift in how we do business. For online sellers, it’s an opportunity to streamline pricing, enhance customer experience, and stay one step ahead of changing expectations.
No pennies? No problem.
Related: How to Craft an Effective Pricing Strategy
Will the Penny Be Worth More Now That It’s Phased Out? Not So Fast…
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